Aug 15, 2019

GVC boosts outlook as it weathers impact of tighter UK regulation

GVC, the gambling group that owns Ladbrokes Coral, upgraded its full-year earnings forecast on Wednesday after a strong performance in its online business helped it to overcome losses resulting from stricter regulation in the UK. Unlike rival William Hill, GVC posted a bullish update saying that trends following a cut to the maximum stake permitted on the high speed slot machines known as fixed odds betting terminals were "Better than initial expectations". GVC, which bought Ladbrokes Coral for £4bn in March 2018, had expected an impact of around £120m on earnings within two years and to shut around 1,000 shops. Revenues from online gambling increased 17 per cent to £1.01bn. Profit before tax, adjusted for amortisation related to the Ladbrokes acquisition, was up 31 per cent to £212m. Investors in GVC have had their confidence knocked this year following a share sale by the chairman and chief executive in March, a revolt against executive pay, and the loss of key personnel at the company, including Andy Hornby who has been appointed chief executive of The Restaurant Group. In a statement with its half-year results, the group said that it would continue to offer gambling in Germany until at least 2021, when the country is expected to put full gambling regulation in place. GVC also announced a 10 per cent increase of its dividend to 17.6 pence per share.

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