Ladbrokes owner GVC scraps dividend but halves coronavirus profit hit

By:

Add as a preferred source on Google
Ladbrokes owner Entain is among the UK firms to have fallen into the sights of activist investors over the past year
Ladbrokes owner Entain is among the UK firms to have fallen into the sights of activist investors over the past year

Betting giant GVC has cancelled its interim dividend over coronavirus concerns, but has also halved the hit it expects to take from the global pandemic.

The UK coronavirus outbreak “significantly reduced” GVC’s revenues from mid-March, the company warned today as it scrapped its second interim dividend.

Instead it will conserve cash, after retail like-for-like net gaming revenue plunged 19 per cent in the UK for the year to 31 March after the UK cancelled all sport over coronavirus. 

However, Ladbrokes and Coral owner GVC also said measures to mitigate coronavirus will halve the blow to earnings before interest, tax, depreciation and amortisation (Ebitda).

Ebitda will now fall by £50m a month, from a previous estimate of £100m a month.

That would cut monthly cash outgoings to £15m. “The group is confident that further cost actions will enable it to achieve its target of reducing the cashflow to breakeven,” GVC added.

Overall gaming revenue rose one per cent in the year to the end of March, as online revenue grew 16 per cent.

But decisions to scrap football matches and major sporting events like Ascot, Euro 2020 and Aintree, and the closure of Ladbrokes and Coral betting shops, is set to weigh heavily on GVC earnings.

“GVC is a business that, in normal times, delivers an outstanding performance,” chief executive Kenneth Alexander said. “However, while our global and product diversification is standing us in good stead during the current uncertainty, the Covid-19 pandemic is posing an unprecedented challenge to our business and our industry. 


“We are responding decisively, and have put in place a range of measures to keep our people safe, strengthen our financial position, limit cash outflow, preserve jobs and maintain a compelling customer offer.  I am confident that we will emerge from this period in a position of strength.”

GVC has refused to pay landlords rent on more than 3,000 Coral and Ladbrokes betting shops during the UK coronavirus lockdown.