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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.£5901.6m
Last close1,021.00p
High / Low (52 weeks)1056.0p / 748.0p
Stock market listingLN
Forecast net debt (£m)1800.7
Forecast gearing ratio (%)57
TeamTechnology
SectorTechnology

Price performance

%1m3m12m
Actual5.06.627.6
Relative *7.1(0.8)25.3

* % Relative to local index

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Company news

Investment summary

Our updated pro-forma GVC forecasts reflect the increased LCL synergy targets (from £100m to £130m), as well as the new £2 FOBT stake limit. Overall, the investment thesis remains unchanged: GVC’s enlarged business benefits from a highly scalable technology, strong brands and diversified revenue streams. We expect strong FCF to simultaneously drive down debt and return cash to shareholders. Additional upside should come from the opening of the US market, where we anticipate opportunistic expansion. The stock trades appropriately towards the top end of its peer group, at 10.8x EV/EBITDA and 14.2x P/E for FY18e.

Last updated on 08/06/2018

Y/E Dec Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 2998.8 523.4 257.7 N/A N/A N/A
2017A 3291.5 666.5 462.8 N/A N/A N/A
2018E 3435.1 734.9 518.2 74.55 13.7 N/A
2019E 3535.9 804.3 589.4 84.78 12.0 N/A

Last updated on 08/06/2018

Latest video

Bitesize Briefings - GVC Holdings

Industry outlook

In the UK, the DCMS's consultation on the Triennial Review has now concluded, although the full results are yet to be revealed. The decision on FOBT stake limits is key for LCL future profits. We estimate that a £20 stake limit would impact EBITDA by c £50 in the near term. Other proposals to impact all operators include responsible gambling obligations, advertising guidelines etc.

Last updated on 27/04/2018

Key management

Kenny Alexander, CEO

Company address

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