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GVC Holdings (GVC)

Business description

GVC Holdings is a leading e-gaming operator in both the B2C and B2B markets. Following the acquisition of Ladbrokes Coral in 2018, it now has a market-leading position in UK retail betting. About 90% of revenues are derived from regulated and/or taxed markets.

Stock data

Market cap.£4137.1m
Last close711.00p
High / Low (52 weeks)1170.0p / 629.5p
Stock market listingLN
Forecast net debt (£m)1887.2
Forecast gearing ratio (%)48
TeamTechnology
SectorTechnology

Price performance

%1m3m12m
Actual4.0(25.9)(24.2)
Relative *(0.3)(25.2)(16)

* % Relative to local index

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Company news

Y/E Dec Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 2998.8 523.4 225.9 N/A N/A N/A
2017A 3291.5 666.5 442.1 N/A N/A N/A
2018E 3472.7 734.9 498.5 70.45 10.1 N/A
2019E 2922.0 641.4 392.9 54.80 13.0 N/A

Last updated on 21/11/2018

Investment summary

By acquiring Ladbrokes Coral, GVC has become a FTSE 100 global gaming business, with pro forma FY18e revenues of £3.47bn. With strong brands, diversified revenues and a superior technology, GVC is well positioned to benefit from increased scale and we anticipate the deal to be accretive, due to the £130m+ cost synergies and £30m capex synergies. The Q318 trading update demonstrated continued progress and a recent $200m JV with MGM should propel expansion into the US, providing access to 15 states. We have updated our FY19 estimates to reflect the April 2019 implementation of the £2 FOBT stake limit and 21% remote gaming duty (up from 15%).

Last updated on 29/11/2018

Industry outlook

In the UK, the government has raised the remote gaming duty from 15% to 21%, with implementation in April 2019. At the same time, the £2 FOBT stake limit will commence. GVC believes that the £2 limit will lead to an ultimate £120m impact on EBITDA and we estimate that the new 21% RGD tax will reduce EBITDA by £30m annually.

Last updated on 29/11/2018

Key management

Kenny Alexander, CEO
Jennifer Spencer, IR

Company address

32 Athol Street
Douglas
IM1 1JB
United Kingdom
+44 (0) 20 7398 7702
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