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GVC Holdings: Q1 Trading and COVID-19 Planning Update

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GVC-Ladbrokes-Coral-integration GVC Holdings: Q1 Trading and COVID-19 Planning Update
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GVC Holdings PLC, the global sports betting and gaming group, today reports trading for the period from 1 January to 31 March 2020 (“Q1”) and provides a further update on the impact of COVID-19 and the mitigating actions being taken.  This follows the Group’s previous announcements of 16 and 17 March 2020.

Summary

  • GVC started the year well, with Group net gaming revenue (“NGR”) +1% and Online NGR up +19%cc1 in the first quarter
  • However, the closure of retail outlets and the cancellation of sports events significantly reduced revenue from mid-March
  • In previous announcements the Group estimated the impact of COVID-19 before any mitigating actions equates to a reduction in EBITDA2 of approximately £100m3 per month
  • However, following the initiation of a number of mitigating actions the Group now expects to reduce this EBITDA impact to approximately £50m per month
    • As a result, the average monthly cash outflow would be limited to approximately £15m per month, and the Group is confident that further cost actions will enable it to achieve its target of reducing the cashflow to breakeven
  • The Group’s financial position remains robust, however given the ongoing uncertainty regarding timings of the easing of shutdown measures around the world, the Board has taken the prudent decision to withdraw the second interim dividend that is due for payment on 23 April 2020

Kenneth Alexander, GVC’s CEO, commented:

“As our Q1 trading numbers once again demonstrate, GVC is a business that, in normal times, delivers an outstanding performance.  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, and we will be well placed to take advantage of a range of attractive growth opportunities which we believe will be available to us.

“We are also sensitive to the fact that at this time of economic stress and isolation, it is vital that we ensure a safe, responsible and enjoyable gaming environment for our customers and do everything that we can to minimise the potential for harm.  Accordingly, not only have we supported the Betting and Gaming Council’s 10 pledge action plan on safer gambling, but we have gone further and introduced a range of additional safeguarding measures to ensure that we are able to rigorously monitor and protect anyone who may be vulnerable at this time.

“Finally, I would like to thank our outstanding teams around the world for the manner in which they have rapidly adapted to the challenge, and for their continuing hard work and commitment to ensuring GVC’s long-term success.”

Current trading
In its 2019 full year results on 5 March 2020, GVC reported that the current year up to 23 February 2020 had started strongly.  That momentum continued until the Group started to see the impact of COVID-19 on sporting events and store closures in mid-March.

The performance of the Group for the year to 31 March 2020 is set out in the table below, with key highlights as follows:

  • Total Group NGR +1% (+2% cc1)
  • Online NGR +16% (+19% cc1), with continued strong growth in all major territories
  • UK Retail like-for-like (“LFL”)4 NGR -19%
  • European Retail NGR -3% (flat cc1) supported by continued market share gains in Italy
  • For the period 1 January to 15 March 2020 all divisions performed strongly, supported by favourable sports margins:
    • Group NGR +9% (+11% cc1)
    • Online performed strongly across both gaming and sports, with NGR +20% (+23% cc1). Since then there has been an encouraging performance in gaming in the absence of sporting events, in line with the Group’s expectations
    • UK Retail like-for-like (“LFL”)4 NGR -5% despite the annualisation of the triennial review impacts
    • European Retail delivered strong NGR growth at +20% (+24% cc1)
Period 1 January to 31 March 2020
Total NGR Total NGR cc1 Sport Wagers Sports Margin
Online
   Sports 17% 21% (12%) 2.5pp
   Gaming 17% 18%
Total Online 16% 19%
UK Retail (LFL3) (19%) (19%) (8%) 3.3pp
European Retail (3%) flat (21%) 3.7pp
Total Group 1% 2%    

For the avoidance of doubt, the guidance provided on 5 March 2020 is withdrawn.

Impact of COVID-19
On 16 and 17 March 2020 GVC provided assessments of the impact of cancellations of sporting events and store closures on Group EBITDA3 for the year to 31 December 2020.  These announcements were based on the Group’s modelling which assumed that: a) football is suspended across Europe; b) major sporting events are cancelled or postponed (Aintree, Royal Ascot, Euro 2020 etc); c) horse racing in the UK and Ireland is suspended; d) all retail outlets in the UK, Republic of Ireland and mainland Europe are closed; and e) there would be a modest increase in GVC’s gaming business which accounts for 57% of Online NGR.  Taken together, GVC estimated that these events would result in a reduction in EBITDA of approximately £100m3 per month before any mitigating actions.  This would break down by the Group’s key reporting divisions as approximately 20% for Online, 63% for UK Retail and 17% for European Retail.

Mitigating actions
GVC’s teams around the world are working hard to reduce costs and re-prioritise activity in order to preserve free cash, whilst continuing to offer its customers great gaming experiences and to position the Group to emerge from the current restrictions in a position of strength.  A number of opportunities have been identified so far which reduce costs by approximately £50m per month.

For example, in the UK GVC is eligible to receive the government grant towards employment costs as we furlough retail colleagues and retain them on full pay, as well as the business rates relief, which together the Group estimates will reduce costs by nearly £20m per month.

In Italy and Belgium GVC operates a franchising model where the store operating costs (rent, employment, utility and other costs) primarily reside with the franchisee.

Other measures taken include reductions in online sports marketing, sports content and trading costs.

Resultant estimated cash outflow
After adjusting for the impact on EBITDA, adding additional cash costs incurred (such as interest, capex, tax and other costs) and allowing for retail capex reduction, the average monthly cash outflow would be approximately £15m per month.  The Group continues to work through cost mitigation opportunities and is targeting a break-even cashflow per month objective, thereby preserving cash at broadly current levels during this period of retail closures and reduced sporting events.

The following table sets out, for illustrative purposes only, the effect of our modelling and mitigating actions on EBITDA and average cashflow over a month of severe COVID-19 impacts:

Impacts of COVID-19 and mitigations Estimated average monthly amounts
Consensus EBITDA2 for FY2020 as at 31/1/20 £65m
Total EBITDA impact before mitigating actions £(100)m
Mitigating actions £50m
Net EBITDA £15m
Other cash costs incurred (including capex, interest, tax and other items) after retail capex mitigation £(30)m
Net cash utilisation £(15)m

Financial position
GVC is in a robust financial position, with net debt/EBITDA as at 31 December 2019 of 2.69x.  The Group had accessible cash of over £350m at 31 March 2020, of which over £250m is cash at hand after excluding cash held on behalf of customers, cash in shops, ringfenced PSP funds and other items which may not be immediately available.

In addition, GVC has a £550m Revolving Credit Facility (RCF) which is currently undrawn.  This facility has a financial covenant which is only tested if the facility is drawn by more than 35% at a quarter-end.  The covenant measure is calculated on a trailing 12-month pre IFRS 16 basis with a net debt/EBITDA limit of 4X.  Unrealised synergies can be added to EBITDA.

GVC currently has two bonds in issue, totalling £500m.  One of £100m is due 2022 and one of £400m is due 2023.  In addition, the Group has Term Loans of €1,125m and $786m, both due 2024.

Dividend
Due to the ongoing uncertainty as to how long restrictions as a result of COVID-19 will be in place around the world, the Board has taken the prudent decision to withdraw the payment of the second interim dividend of 17.6p per share announced on 5 March 2020.  This was due to be paid on 23 April 2020 with a total cash cost of £103m.  However, the Board recognises the importance of dividends as a part of shareholder returns and will consider dividends with future results announcements.

2019 Annual Report and Annual General Meeting (“AGM”) and Directors Remuneration
The Group’s annual report for 2019 is today published on the Group’s website at gvc-plc.com.  Copies will be posted to those shareholders requesting a hard copy as soon as it is practical to do so.  The 2020 AGM was scheduled to be held on 30 April and in normal circumstances an AGM Notice would be circulated with the annual report.  Owing to the public health guidance on social distancing, the Board has decided to postpone the AGM.  The Group will issue an AGM Notice once the Board is confident it can safely hold a meeting on a specified date.

The 2019 Annual report sets out details of the directors’ 2019 incentive outcomes and 2020 implementation.  However, the payment of directors’ 2019 bonuses and the grant of the 2020 LTIP awards have been postponed.  The Remuneration committee will consider the impact of COVID-19 on GVC’s performance and remuneration in due course and review the implementation of the policy for 2020 as appropriate.

 

Notes

  • Growth on a constant currency basis is calculated by translating both 2020 and 2019 performance at the 2020 exchange rates.
  • As at 31 January 2020, company compiled EBITDA consensus for the financial year to 31 December 2020 was £776.3m on a pre-IFRS 16 basis.
  • The £100m approximate impact on monthly EBITDA is derived from the two announcements of 16 & 17 March as follows: The EBITDA impact over 3.5 months of sports and major events cancelations and European Retail closures of approximately £130m – £150m equating to approximately £37m – £43m per month; the EBITDA impact of UK Retail store closures of approximately £45m – £50m per month; and the EBITDA impact of the cancellation of horse racing in the UK & Ireland of approximately £20m- £25m per month. Taking each of these at the mid-point and allowing for overlap derives an approximate monthly impact on EBITDA of £100m.
  • UK Retail numbers are quoted on a LFL basis. During the period, there were an average of 3,131 shops in the estate, compared to an average of 3,464 in the same period last year.

 

About GVC Holdings PLC:
GVC Holdings PLC is one of the world’s largest sports-betting and gaming groups, operating both online and in the retail sector.  The Group owns a comprehensive portfolio of established brands; Sports Brands include bwin, Coral, Crystalbet, Eurobet, Ladbrokes, Neds and Sportingbet; Gaming Brands include CasinoClub, Foxy Bingo, Gala, Gioco Digitale, partypoker and PartyCasino. The Group owns proprietary technology across all of its core product verticals and in addition to its B2C operations provides services to a number of third-party customers on a B2B basis. The Group has also entered into a joint-venture with MGM Resorts to capitalise on the sports-betting and gaming opportunity in the US.  The Group, incorporated in the Isle of Man, is a constituent of the FTSE 250 index and has licences in more than 20 countries, across five continents.

For more information see the Group’s website: www.gvc-plc.com


Source: Latest News on European Gaming Media Network
This is a Syndicated News piece. Photo credits or photo sources can be found on the source article: GVC Holdings: Q1 Trading and COVID-19 Planning Update

George Miller (Gyorgy Molnar) started his career in content marketing and has started working as an Editor/Content Manager for our company in 2016. George has acquired many experiences when it comes to interviews and newsworthy content becoming Head of Content in 2017. He is responsible for the news being shared on multiple websites that are part of the European Gaming Media Network.

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Week 22/2020 slot games releases

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Here are this weeks latest slots releases!

Microgaming has introduced its newly revamped version of its classic Immortal Romance game. The original Immortal Romance online slot game has been remastered to a new HTML5 format to support a host of performance and feature upgrades, including free games and autoplay, quick spin, enhanced animations and improved audio to complement the universally celebrated original soundtrack.

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MGA Games is going to launch its latest hyperrealism series named Samantha Fox. This latest release is a tribute to the famous singer Samantha Fox. Samantha Fox hyperrealism series includes 4 mini-games that relive the career of the sex symbol with photo-shoots, recording studio, concerts and autograph signing. And, the figures of the 5 reels remind us of the personal objects of the artist and of the time period, such as leather jackets, record players and cassettes. Wild figures are especially important; they act as wildcards and substitute all others except Scatters and Bonus. Additionally, all prized spins with Free Spins have a ×2 multiplier.

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Love is in the air at Greentube’s Home of Games with the addition of the romantic new slot, Romeo & Juliet – Sealed with a Kiss2122-74 Week 22/2020 slot games releases, now available for all B2B partners! Players accompany the two romantics in the fair city of Verona and help them find love across 5 reels and 30 win lines in the captivating new online casino game. As the reels spin, Romeo tries to woo Juliet with all manner of wonderful and exciting features that make this slot a must-have, including reel modifiers, a Free Spins Bonus, and the show-stopping ‘Sealed With a Kiss’ feature, in which Romeo writes a love letter to Juliet.

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Swedish slot specialist Quickspin has released its latest slot game “Diamond Duke.” With a look and feel inspired by the 50s, this game will transport players to the heyday of American diners and classic cars with chrome and wings. The inspiration has been taken from jukeboxes, vintage cars and classic 3×3 slot machines.

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High 5 Games (H5G), the industry’s leading independent casino games provider, droped its latest hit on May 27th that will have players dancing worldwide! The latest release to the company’s tentpole library is jammed pack with fun features that will keep the players grooving to the spinning reels of this 4×5 slot game. Beat the House debuts this week, featuring H5G’s newest game feature Beat Boxes. Players can hit the turntables and land a “beat” symbol to leave behind a Beat Box. Each symbol with the highlighted Beat Box are now doubled when a win is landed. When the player gets a full reel of Beat Boxes, the entire reel turns into a Locked Wild, which will lock for the next three bets. If the player activates all five reels with Locked Wilds, they will enter the Free Games bonus!

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Genesis Games launches a brand-new online casino slot game that features extendable paylines from 30 to 80 that can pay up to 3000x your bet. This latest addition would be the 12th game under the Radi8 series. Tiki Tower, a 5×3 online casino slot game, starts with 30 pay-lines and reveals a new row by landing Tiki Tower symbols on the 2nd, 3rd, or 4th reel in the game. These towers will magically convert to a set of random symbols for a chance at stacked line wins. At 5×8 reels, when players hit the 3 Tiki Towers, they will enter free spins that sends players into a re-trigger frenzy.

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Pragmatic Play, a leading content provider to the gaming industry, has released its colourful new title, Fruit Party. The 7×7 videoslot is packed with fruity flavour and colour, with a cluster pay mechanic setting it apart from your traditional game. With every successful spin, more fruit cascades down onto the reels with Pragmatic Play’s tumbling wins feature.

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iSoftBet, the leading online and mobile casino content provider, has launched Hot Shots 2, inviting players to lace up their boots and score huge wins in this supercharged sequel. Always at the forefront of innovation, iSoftbet has included their new Ultra Bet* feature on this slot-based football extravaganza, allowing players to place a single wager to unlock 50 high-octane games, collecting wins, multiplier stars and bonus rounds along the way. Ultra Bet offers a unique way to play, prioritising the most exciting game features for a more engaging player experience.

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Red Rake Gaming has just announced the release of a new and spectacular game, a 6×5 reel video slot with a free spin feature where players can multiply their winnings. 1st of the Irish is a video slot loaded with different features, including bet multipliers, Wild symbols on one single reel, Sticky Wild symbols and a free spin feature with multipliers that players will find very appealing. This new video slot has 5 meters that fill up bit by bit each time these symbols appear: pipe, beer, shamrock, hat and rainbow.

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Play’n GO have announced their latest release this week, another chapter in the adventures of their most prominent character Rich Wilde titled Rich Wilde and the Shield of Athena. Rich Wilde has spawned a string of successful games for the slot supplier, with previous adventures including Pearls of India, Book of Dead and his most recent outing Tome of Madness. Rich Wilde and the Shield of Athena is a 5×3 slot that sees the infamous explorer travel to the lost city of Atlantis in search of the legendary Shield wielded by the goddess Athena.

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Realistic Games has launched its next Game Changer title, Bar–X2122-75 Week 22/2020 slot games releases Game Changer, based on the iconic land-based brand. After announcing a landmark partnership with Electrocoin, the supplier has taken the classic Bar-X2122-76 Week 22/2020 slot games releases brand to online slot players, featuring the ground-breaking Game Changer bonus round to add a unique and modern twist to the gameplay. The 5-reel, 20-win line title features over two million game boards in the bonus round, which is triggered by any combination of boxed symbols forming around the edge of the reels.

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Spearhead Studios is pleased to announce the launch of the bespoke title Book of Gates on the successful German casino operator Wunderino. The new slot release sees British explorer, Sir Percy Forcet, on a quest to discover the treasures hidden deep inside the tomb of a powerful pharaoh, using the ancient Egyptian scroll as his guide. Book of Gates was specially developed to rise to the high expectations of Wunderino’s players. The title has high-volatility and features a 5X3 videoslot with ten paylines and a maximum win of over 11,000X.

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Booongo is aiming to brighten up the evening sky with its latest slot, Moon Sisters, with cash prizes and three lucrative jackpots on offer for players. The visually stunning Asian-themed 3×5 game features 25 paylines and is the newest addition to the developer’s Hold and Win portfolio. Collect six moon symbols to gain entry to the bonus round, where multiple respins provide the potential for players to claim the three in-game jackpots – Grand, Major and Mini.

Moon-Sisters-2 Week 22/2020 slot games releases

 


Source: Latest News on European Gaming Media Network
This is a Syndicated News piece. Photo credits or photo sources can be found on the source article: Week 22/2020 slot games releases

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PubCos want to test Game Payment app following successful pilot and dramatic increase in demand for cashless

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A total of 30 pub sites drawn from a cross-section of PubCos are eagerly waiting to trial the Game Payment cashless app following its successful technical pilot. Although the pilot was truncated by the prime minister’s March 20 Covid-19 instruction to close all pubs with immediate effect, it nonetheless provided the Game Payment system with a robust test of its technology which it passed with flying colours.

“Obviously we were disappointed at having to curtail the pilot for reasons beyond our control, but we were able to monitor the app in real time and in the field operating successfully on both digital and analogue machines” stated bacta Vice-President, Greg Wood, part of the senior team responsible for bringing Game Payment to market. “I am delighted to confirm that the app showed itself to be extremely robust and the pilot served as a vindication of the technology that lies behind it.”

He added: “We demonstrated the app to a number of leading UK and European operators first at EAG and then at ICE London in February.  Since then and partly as a result of the response to Covid-19, the demand for safe and reliable cashless payment solutions has soared and a significant number of our UK contacts have come back to us asking to test across a sample of their pub estates.

“We have also received lots of interest from AGC operators which has resulted in us bringing forward our development plans for this sector by six months.  As the restrictions on lockdown begin to lift, the team is looking forward to implementing the business development plan secure in the knowledge that the Game Payment app has the strongest of technical foundations.”

The Game Payment app underwent its successful pilot following completion of a payment acquiring agreement with one of the top three UK acquirers. The agreement, which was struck in February, represents the first such deal with a tier 1 UK bank for cashless gaming in pubs and other venues and is a testament of the acquirer’s confidence in Game Payment’s business plan, product credentials and financial structure, as well as the team’s ability to manage a gambling e-wallet.


Source: Latest News on European Gaming Media Network
This is a Syndicated News piece. Photo credits or photo sources can be found on the source article: PubCos want to test Game Payment app following successful pilot and dramatic increase in demand for cashless

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The sky’s the limit at United Remote

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Aggregator United Remote has moved its headquarters to the state-of-the-art 14 East skyscraper, Malta’s second tallest building, and the landmark building seen from capital city Valletta.

These new premises for the aggregator are not the only change, but this is a very visible statement by the aggregator that it means business, and comes as the restructuring of the enterprise nears completion. 14 East skyscraper stands out not least due to the stunning views it showcases, reaching from Sliema and St Julian’s to Manoel Island and Valletta, right on to Mdina, which is in the middle of Malta, several miles from the prestigious office location. Moreover, the iconic building and its views can be enjoyed from anywhere within due to glass partitions, without, crucially, compromising on privacy, thanks to expert acoustic treatments.

United Remote’s aggregation platform provides a broad portfolio of games from respected international partners combined with pioneering real-time backend tools for casino operators. The company has successfully completed a period of intensive restructuring which has resulted in major technology and enterprise investments, with the organisational culture having been significantly reshaped to provide added-value to operators and the company investing in new office surroundings at 14 East for the United Remote team that mirrors management’s ambition to be a leading industry platform.

A team of over 30 people inhabits three levels within the stunning new 14 East skyscraper, delivering technology and services that are used by the global iGaming industry. Part of the floorspace is occupied by a re-energised United Remote Games, who are innovating around a legacy portfolio and bringing new releases to market with increasing frequency.

In addition to technology investments and enhancements, United Remote has been adapting the agreements the company previously had put in place, de-risking the entire enterprise, and focusing very particularly on customer protection. In addition, United Remote has been building a strong compliance culture as well as raising standards in terms of transparency, the glass fronted 14 East symbolising this transparency on a daily basis for every member of the team.

United Remote has embraced substantial change to streamline new integrations and provide operators more profitable real-time data. This is all part of upping United Remote’s service to the iGaming industry and ensuring that the B2B-channel is given priority with an easy-to-use back-end where operators can quickly set up the tools available on the platform.

Jeremy Fall, CEO of United Remote added: “It’s great to see this global company thriving in this new environment at 14 East to the extent that it has necessitated this move to these excellent new offices. It is also a great endorsement of Malta as an excellent and supportive jurisdiction for a technology company of this caliber. Working in an office like this is inspiring for the whole team and we look forward to significantly growing our business here over the next couple of years.”


Source: Latest News on European Gaming Media Network
This is a Syndicated News piece. Photo credits or photo sources can be found on the source article: The sky’s the limit at United Remote

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