Business

Ladbrokes owner profit slips but online betting surges

Company says it will not pay interim dividend but expects online growth to boost profit in second half

A Ladbrokes betting shop in Dublin. Photograph: Aidan Crawley

Thu Aug 13 2020 - 08:41

Ladbrokes owner GVC said on Thursday it would not pay an interim dividend after it reported lower core profit for the first half of 2020, while forecasting growth in its online business would push overall profits higher in the second half.

Store closures and sports events cancellations saw revenue overall fall but online gaming revenue jumped nearly 20 per cent, with growth in both sports and gaming revenues and double-digit growth across its major markets.

Online profits surged 53 per cent to £368.6 million (€407.3 million).

Overall underlying earnings before interest, taxes, depreciation and amortization (Ebidta) for the six months to June 30th slipped to £348.6 million from £366.8 million a year earlier, on a reported basis.

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However, sporting events, such as horse-racing, England’s Premier League and Germany’s Bundesliga, European cup football and Major League Baseball, have all resumed in recent weeks, aiding bookmakers.

The company, which also owns the Bwin brand, said it now expects full-year underlying core profit to be in a range of £720 million to £740 million, down from £761 million last year but above a company supplied consensus estimate of £715 million.

"Given the unprecedented trading environment, GVC has delivered an encouraging performance in the first half, underlining the strength of our diversified business model," chief executive Shay Segev said.

Mr Segev took over after long-time CEO Kenny Alexander stepped down in July after with immediate effect, saying he wanted to spend more time with his family.

Just a week later the company announced that the UK tax authority was looking into potential offences at the company’s former Turkish subsidiary, which was sold in 2017. GVC did not provide any new information about the investigation on Thursday.

British bookmakers, including GVC, have been expanding into the US market to offset a hit from tighter regulations at home.

GVC, which has a US presence through a venture with casino operator MGM Resorts, said the United States represented the “single biggest growth opportunity for GVC”. – Reuters/PA

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