GVC increases synergy targets with Lads Coral integration ahead of schedule
London-listed operator wipes £15m off future adverse EBITDA impact after positive FOBT fallout
GVC Holdings provided a boost for shareholders this morning after adding £15m of cost synergies to its 2020 target thanks to Ladbrokes Coral’s quicker-than-expected migration onto the GVC technology platform.
The London-listed operator also reported the impact from the FOBT stake cuts has been better than expected, which should result in a further £15m EBITDA benefit relative to expectations from 2020.
GVC’s previous Triennial Review guidance was an adverse EBITDA impact of £145m in 2020, reducing to an adverse EBITDA impact of 120m by 2022.
Updating investors ahead of GVC’s Capital Markets Event this afternoon, the figures have now been amended to an adverse EBITDA impact of £130m in 2020 and £105m by 2022.
GVC CEO Kenny Alexander
GVC CEO Kenny Alexander said: “As we reported in our trading update last month, we have had an excellent start to the year with strong momentum across all divisions continuing into the second quarter.
“This is the first Capital Markets Event post the deal with Ladbrokes Coral, and we will provide an insight into the key enablers that are driving our market outperformance – proprietary technology, product, leading brands, cutting-edge marketing, our people and local execution.
“These are the growth foundations that will enable us to deliver sustained double-digit online NGR growth converting to significant long-term profit growth.
“We are making great progress on the Ladbrokes Coral integration and we have a clear roadmap for delivery in the US, where it remains early days, but there is no doubt that this is a great long-term opportunity for GVC,” he added.
Numis analyst Richard Stumer welcomed the news following Alexander’s recent share sell-off and reiterated his BUY status for GVC, adding: “This upgrade, reinforced by this afternoon’s presentations, should be taken positively by the market.”