(Alliance News) - GVC Holdings on Thursday said it is withholding its interim dividend after a tough first half of 2020, with the cancellation of sporting events and the closure of high-street betting shops hurting performance.
The Isle of Man-based sports-betting and gaming company swung to a pretax profit in the first half ended June 30 of GBP24.8 million from a loss of GBP12.3 million a year prior. However, on an underlying basis, pretax profit was down 75% to GBP55.4 million from GBP212.1 million.
Net gaming revenue fell 11% in the half to GBP1.61 billion from GBP1.81 billion year on year.
GVC Holdings saw strong growth before Covid-19 hit, after which lockdown restrictions knocked performance.
"Strong growth in our gaming products during the second quarter more than offset the impact from cancelled sporting events," the company said.
The subsequent migration of retail customers into online due to lockdowns saw strong net gaming revenue growth for the Online division, which was 19% ahead year on year.
Underlying earning before interest, tax, depreciation and amortisation was however down 5% to GBP348.6 million from GBP366.8 million. This was due to the impact of store closures on the company's Retail division.
The company said it decided not to pay an interim dividend given the continuing market uncertainty.
Chief Executive Shay Segev said: "The strong performance of the Online business coupled with the return of the sporting calendar and the re-opening of our Retail operations means that the group is well placed for the balance of the year."
The company expects to deliver an underlying Ebitda of GBP720 million to GBP740 million for the full year, dependent on any further Covid-19 disruptions. This is supported by the acceleration of GBP20 million of synergies from the acquisition of Ladbrokes Coral, offset by one off impacts in non-core businesses, the company said.
"The company has been busy in adapting to pandemic challenges, with the cancellation of the dividend, a suspension in marketing spend and the access to additional liquidity if required. Government schemes and business rates relief were also a boon, leading to two outcomes which represent particular achievements. Not only did the company remain cash neutral throughout lockdown, but the profit after tax figure is flat in comparison with the corresponding period last year, which is notable given the circumstances," commented Interactive Investor analyst Richard Hunter.
GVC Holdings shares were up 0.2% at 787.20 pence each on Thursday morning.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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