GVC Holdings has asserted that the company is “responding decisively” and is in “good stead,” as it provides a Q1 and COVID-19 trading update.
Previously suggesting that the impact of COVID-19 before any mitigating actions would equate to a reduction in EBITDA of approximately £100m per month, following a number of mitigating actions GVC has reduced these losses to £50m for the same timeframe.
“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,” it is noted within the report.
Further comments that its financial position remains robust, despite the ongoing uncertainty regarding timings of the easing of shutdown measures around the world, with the board taking the decision to withdraw the second interim dividend that is due for payment on April 23, 2020 for a total cash cost of £103m.
Kenneth Alexander, GVC’s CEO, explained: “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.”
Adding on its responsibilities as the pandemic forces many in-doors: “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.”
In its previous financial update the company stressed that continuing momentum had seen the group enter 2020 strongly, until sporting cancellations and store closures took hold in mid-March.
Total net gaming revenue for the period until March 31, 2020, has grown one percentage point year-on-year, falling from a nine per cent increase should the reporting period have terminated on March 15.
Online revenue has grown 16 per cent until March 31 with continued strong growth in all major territories, dropping slightly after a strong performance across gaming and sports saw a 20 per cent boost, since which there has been an encouraging performance in gaming in the absence of sporting events, in line with expectations.