Ladbrokes owner GVC raises full-year outlook as online gaming surges
Ladbrokes owner GVC Holdings has raised its full-year outlook as revenue jumped 12 per cent in the third quarter helped by a surge in online gaming and sporting events.
The betting giant, which also owns bookmakers Coral, Crystalbet and bwin, today said full-year earnings are expected to be between £770m and £790m, up from its previous guidance of £720m to £740m.
The update came as welcome news for investors, who were last week rattled by GVC’s warning that fresh gambling rules in Germany — its second-largest online gaming market — could drag down profit by £70m next year.
Shares in the Ladbrokes owner were up more than six per cent at 1,116p in morning trading.
The firm was boosted by a huge jump in online gaming volumes in the three months to 30 September, which it said exceeded pre-Covid levels.
Online net gaming revenue rocketed 26 per cent over the period, as bored Brits took to their screens during months of closures.
The company announced it will acquire Bet.pt, a Portuguese online gaming company, as GVC seeks to expand further across the continent while tighter regulations fog the UK horizon.
The return of sporting events including the Premier League over the summer also lifted GVC’s results, which the company said provided “plenty of action for customers”.
GVC added it was “firmly on track” to becoming the leading operator in the US online sports betting and gaming markets through its joint venture with MGM Resorts.
BetMGM currently operates in eight US states, with a further three expected to launch before the end of the year.
“We have delivered our nineteenth consecutive quarter of double-digit online growth, along with market share gains in all our major territories… GVC is primed for further growth,” said chief executive Shay Segev.
“In the US, BetMGM continues to go from strength to strength as we roll out into new states, integrate further with our partners’ customer propositions and deliver innovative products and features,” he added.
Risks remain
The group said all of its UK and European betting stores have now reopened, with volumes within 10 per cent of those seen prior to closures.
However, GVC’s chief executive warned that the prospect of a second lockdown may force its UK stores to shutter once more.
Segev added: “While the risk of further restrictions as a result of Covid-19 mean that we remain cautious on the short-term outlook, in the longer term we are confident of being able to continue delivering sustainable growth for all our stakeholders.”
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “Like the rest of the UK and Europe’s high streets, GVC’s retail stores were forced to close in lockdown.”
“And while the return of physical wagering is still more of a trickle than a deluge, GVC has managed to offset this trend with a surge of online gaming and betting.”
She added: “It seems customers that became accustomed to gaming and digital wagering during lockdown have stuck around, and that’s a welcome development.”