Improved savings from Ladbrokes deal to mitigate FOBT blow for GVC

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issuing a trading update for the 20 weeks to May 20, gaming group GVC Holdings reported that expected cost synergies resulting from its acquisition of Ladbrokes Coral are set to be 30 per cent higher than forecast, up to £130m by 2021.

The company said that its online business continues to boom, with net gaming revenue up 18 per cent in constant currency in the period, while the legacy GVC and Ladbrokes Coral businesses continue with double-digit growth.

However, the UK retail business saw NGR fall five per cent on a like-for-like basis, a drop GVC blamed on “adverse weather”.

Stormy conditions are set to continue in GVC’s UK retail business after maximum stakes on fixed-odds betting terminals were slashed to just £2. GVC says it is well placed to weather the onslaught once the change kicks in later this year.

“The focus in the UK retail operation over the last two years has been to create a business that is well placed to face these structural and regulatory headwinds. As such we expect to be able to reposition the business within two years following implementation, with an anticipated fully mitigated impact of c£120m on group EBITDA secured by the end of this period,” the company said in a statement.

“In the first full year the impact on group EBITDA is anticipated to be in the region of £160m. Therefore, we expect to retain a profitable and highly cash generative UK retail estate.” In 2017, GVC delivered a clean group EBITDA of €239m, up from €170.5m in 2016.

GVC also offered a view on post-PASPA America, suggesting it has moves planned: “Through Stadium, the group is already the leading B2B provider of sportsbook technology in Nevada, whilst in New Jersey GVC technology supports MGM online casino and poker offerings.

“The group continues to evaluate a number of potential opportunities to expand its presence in the US through a disciplined approach.”