£4207.3m market cap
723p last close
GVC Holdings is a leading e-gaming operator in both the B2C and B2B markets. Following the acquisition of Ladbrokes Coral in 2018, it now has a market-leading position in UK retail betting. About 90% of revenues are derived from regulated and/or taxed markets.
Investment summary
By acquiring Ladbrokes Coral, GVC has become a FTSE 100 global gaming business, with pro forma FY18e revenues of £3.47bn. With strong brands, diversified revenues and a superior technology, GVC is well positioned to benefit from increased scale and we anticipate the deal to be accretive, due to the £130m+ cost synergies and £30m capex synergies. A recent $200m JV with MGM should propel expansion into the US, providing access to 15 states. We have updated our FY19 estimates to reflect the April 2019 implementation of the £2 FOBT stake limit and 21% remote gaming duty (up from 15%). The company will announce FY18 results on 5 March.
Industry outlook
In the UK, the government has raised the remote gaming duty from 15% to 21%, with implementation in April 2019. At the same time, the £2 FOBT stake limit will commence. GVC believes that the £2 limit will lead to an ultimate £120m impact on EBITDA and we estimate that the new 21% RGD tax will reduce EBITDA by £30m annually.
Last updated on 18/09/2019
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| Forecast net debt (£m) | 1887.2 |
| Forecast gearing ratio (%) | 48 |
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Key management |
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| Kenny Alexander | CEO |
| Jennifer Spencer | IR |
| Nick Batram | Head of Investor Relations |
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