GVC revenues up 16% ahead of Ladbrokes Coral completion
EBITDA increases by 40% to €239.5 as Q118 revenues rocket in Germany and Brazil
GVC today reported a 16% increase in total revenue for FY17 to €896m, with the firm hailing rapid growth in Latin America and Germany, as well as its partypoker brand.
The impressive annual performance culminated in EBITDA levels of €239.5m, a 40% increase on 2017 with the firm reaping the benefits of its 2016 acquisition of bwin.party.
The bwin business has now been fully integrated across all markets, with Latin America the last to make the switch over to GVC’s technology platforms in early 2018.
Net gaming revenue rose 17% to €925.6m, with sports brands up 20% to €663.8 and a 12% increase in gaming brand revenues driven by in part by a major investment in partypoker.
CEO Kenny Alexander told EGR that growth had even accelerated into Q1, with revenues up 18% for the first 10 weeks of the year.
Alexander added: “There are those markets that are more challenging like eastern Europe, but we are investing 85% of marketing spend in the German-speaking markets, Brazil and our partypoker business, where growth is significantly higher than 18% and somewhere in the region of about 27%.
“It will become increasingly more difficult to grow at that rate when the business gets a greater scale but we are managing to do it at the moment and these are some cracking results.
GVC had to pull out of Turkey’s grey market in 2017 to get the LCL deal over the line, with the firm hoping the loss in revenue from the country will be offset by its recent acquisition of Crystalbet in Georgia, which will remain fully localised in line with the operator’s brand strategy.
GVC CEO Kenny Alexander
“One of the reasons we have been successful is because we have localised all of our offerings, it is absolutely crucial,” said Alexander.
“The brand that we have just acquired in Georgia is totally localised and will remain that way.
“We do the same in Spain, or Germany or Italy, they are all very much localised with localised management teams as well,” he added.
Regulus Partners analyst Paul Leyland was cautious on the firm’s future prospects however, , with regulatory threats in its two biggest markets, the UK and Germany.
“GVC has benefited from a period of good fortune, improved operations management and an M&A environment suiting the brave, with regulatory change a threat rather than a reality,” he said.
“2018 will bring with it much greater integration challenges than the company has faced hitherto.
“With the ’easy money’ of Turkey lost and the combined group’s two biggest markets, the UK and Germany, likely facing significant negative regulatory change, GVC’s pivot into more regulated markets may make its free-wheeling .com days look like a golden age,” Leyland said.