International edition
September 20, 2019

In light of terminal decline

GVC to cut Ladbrokes and Coral shops operations

GVC to cut Ladbrokes and Coral shops operations
Profits from UK retail are “going to be a relatively small part” of the wider company in the future, GVC's CEO assured.
United Kingdom | 01/18/2019

As Britain’s biggest bookmaker experiences a double-digit growth in online gaming revenue, the company has announced that Ladbrokes and Coral shops will become a “relatively small part” of operations.

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UK retail is in terminal decline," assured Kenny Alexander, CEO of GVC Holdings

However, the high street malaise was more than offset by double-digit growth in online gaming revenue, the Telegraph reports.

“We’re growing market share in all our major territories. We’re shooting the lights out at the moment,” he told The Telegraph. “It’s all about digital. And thankfully our digital business is going gangbusters.”

Full-year profits would be between £750m and £755m, GVC said in a pre-closing trading statement. Consensus expectations compiled by Bloomberg were £739m.

Digital specialist GVC, which also counts Bwin among its portfolio of popular gambling brands, was propelled into London’s blue-chip after completing a £3.2bn purchase of Ladbrokes Coral last March.

The government decision to slash the stake limit for Fixed Odds Betting Terminals (FOBTs) to £2 will see up to 1,000 Ladbrokes and Coral shops shut as they would no longer be viable, the company reiterated.

The enactment of restrictions on FOBTs, branded the “crack cocaine of gambling”, was controversially brought forward last year after ministers had initially planned to implement them from autumn 2019.

“There is no point in sugar-coating it, some jobs will go,” Mr Alexander said.

Profits from UK retail are “going to be a relatively small part” of the wider company in the future, he added.

GVC is one of a number of British bookmakers hoping to take advantage of a relaxation of US sports gambling laws. Last summer it struck a deal with giant MGM Resorts that will put it in a market-leading position in years to come. Its joint venture across the Atlantic leaves GVC “very well placed for a successful 2019”.

Total fourth quarter net gaming revenue growth was 6pc higher on a constant currency basis and 9pc up on the year to December. UK and European retail sales fell 3pc and 8pc respectively, but online sales swelled by 15pc.

Mr Alexander said: “I don’t think they [the results] could be much better.”

Goodbody analysts called GVC’s trading a “strong update … despite an extremely tough fourth quarter comparative”.

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