TIDMGVC
RNS Number : 3146G
GVC Holdings PLC
16 March 2020
16 March 2020
GVC Holdings PLC
("GVC" or the "Group")
Impact of sporting cancellations as a result of Covid-19
GVC Holdings PLC (LSE: GVC), the global sports betting and
gaming group, today provides an update regarding the impact of
Covid-19 and subsequent cancellation of sporting events.
On 5th March 2020 the Group updated on current trading for the
period 1 January 2020 to 23 February 2020 stating "Trading in the
year to date was strong with Group NGR +5% cc and Online NGR +16%
cc, both of which have benefitted from strong sports margins in the
first two months."
As the spread of Covid-19 continues across the world, the well
being, safety and security of our colleagues and customers is of
paramount importance to us. We are following government advice in
each area of our operations and have enacted contingency plans to
minimise disruption to the business.
The spread of the virus means that a number of live sporting
events are being impacted. In our financial year to 31 December
2019, approximately 45% of our Group NGR was generated from
sporting events, with 43% of our online NGR generated from
sports.
While it is difficult to quantify the precise impact on earnings
it is clear that a significant reduction in sporting events will
have a material impact on EBITDA in the current financial year. We
have therefore modelled a scenario based on the following
assumptions:
-- Football: the Euros will be postponed until 2021 and all
other football will be cancelled until July 2020;
-- Horse Racing: major events such as Aintree and Royal Ascot
will be cancelled. All other horse racing continues behind closed
doors; and
-- Retail: the retail estate in the UK will remain open for
business. Our stores in Italy and Belgium remain closed for three
months.
These assumptions would mean that there will be substantially
fewer sporting events through to August 2020 and that EBITDA for
the financial year ending 31 December 2020 will be reduced by
approximately GBP130m - GBP150m(1) before any mitigating actions.
If shops in the UK are closed, we anticipate that this would
incrementally reduce EBITDA by approximately GBP45m - GBP50m per
month, which includes employment costs of approximately GBP20m per
month.
The Group retains a strong balance sheet with net debt/EBITDA as
at 31 December 2019 of 2.69x. We have a Revolving Credit Facility
of GBP550m available and a covenant test of 4x net debt/EBITDA(2) .
This test only occurs if the facility is drawn by 35% or more at
the end of a financial quarter. The facility remains currently
undrawn and as at 31 December 2019 the Group had accessible cash of
GBP260m.
GVC CEO, Kenneth Alexander commented:
"While we do not underestimate the challenge presented by
Covid-19, GVC is in a robust position to manage the impact on our
operations. We are a diverse global business, with an experienced
and expert management team, which operates across multiple products
and markets. Our priority is to protect our employees while
maintaining our offer to our customers at this difficult time."
The Group continues to monitor events and has the flexibility to
take appropriate actions as required.
Enquiries:
Investor Relations
GVC Holdings plc
David Lloyd-Seed, Director of Investor Relations & External Communications Tel: +44 (0) 203 938 0000
Jennifer Spencer, Investor Relations Manager (investors@gvc-plc.com)
Media Tel: +44 (0) 203 938 0000
GVC Holdings plc
Jay Dossetter, Head of CSR & Corporate Communications
Powerscourt
Rob Greening / Elly Williamson Tel: +44 (0) 20 7250 1446
Notes:
(1) As at 31 January 2020, company compiled EBITDA consensus for
the financial year to 31 December 2020 was GBP776.3m on a pre-IFRS
16 basis.
(2) Covenants are tested at the end of a financial quarter on a
trailing 12 month basis and are calculated on a pre-IFRS 16
implementation basis.
Forward-looking statements
This document contains certain statements that are
forward-looking statements. They appear in a number of places
throughout this document and include statements regarding our
intentions, beliefs or current expectations and those of our
officers, directors and employees concerning, amongst other things,
results of our operations, financial condition, liquidity,
prospects, growth, strategies and the business we operate. These
forward-looking statements include all matters that are not
historical facts. By their nature, these statements involve risks
and uncertainties since future events and circumstances can cause
results and developments to differ materially from those
anticipated. Any such forward-looking statements reflect knowledge
and information available at the date of preparation of this
document . Other than in accordance with its legal or regulatory
obligations (including under the Market Abuse Regulation
(596/2014), the Listing Rules, the Disclosure Guidance and
Transparency Rules and the Prospectus Rules), the Company
undertakes no obligation to update or revise any such
forward-looking statements. Nothing in this document should be
construed as a profit forecast. The Company and its directors
accept no liability to third parties in respect of this document
save as would arise under English law.
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
LEI: 213800GNI3K45LQR8L28
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END
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