(Alliance News) - Shares in GVC Holdings PLC surged on Monday, after it cut its estimated earnings hit from the Covid-19 outbreak, though it did warn that revenue in the final two weeks of March slumped as bricks and mortar units closed and sports events were cancelled.
The company has also pulled its second interim dividend payment of 17.6 pence per share, saving it GBP103 million.
Shares in GVC were 11% higher at 538.00p each in London on Monday morning.
In the quarter ended March 31, GVC said total net gaming revenue rose 1% year-on-year, helped by 16% growth in Online alone. In the UK Retail unit, like-for-like revenue sunk 19% annually and there was a 3% fall in the European Retail arm.
"However, the closure of retail outlets and the cancellation of sports events significantly reduced revenue from mid-March," GVC warned.
Lockdowns made to halt the spread of Covid-19 forced non-essential businesses in the UK to close their doors.
Sporting events across the globe have also been paused. In the UK alone, football competitions have been suspended and 2020's horse racing's flagship meet the Aintree Festival, which features the famous Grand National race, was cancelled.
The disrupted sporting calendar led to GVC initially expected a GBP100 million monthly hit on its
earnings before interest, tax, depreciation and amortisation.
On Monday however, GVC cut its estimated monthly earnings fall to GBP50 million, after it reduced costs.
GVC added: "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 GBP20 million 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."
By Eric Cunha; ericcunha@alliancenews.com
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