GVC Holdings’ gaming segment benefited as a “partial substitution from sports products,” as the group eyes future growth via four strategic priority points as well as asserting that it stands ‘well placed to balance the year’ in its H1 review.
With the firm’s online reporting segment seeing NGR rise 19 per cent from £1.04bn to £1.24bn year-on-year, the surging performance of gaming, a popular trend given a lack of Q2 sports action, saw a 31 per cent increase highlighted to reach £752.6m from £574.6.
Total online EBITDA shot-up 53 per cent to £368.6m (2019: £241.3m) driven by favourable sports margins, a strong performance in gaming and lower marketing spend due to sport cancellations.
Total group revenue for the reporting period fell 11 per cent to £1.58bn (2019: £1.78bn), gross profit declined 13 per cent to £1.03bn (2019: £1.18bn), EBITDA dropped five per cent to £348.6m (2019: £366.8m) and profit after tax stayed consistent at £2.1m.
The closure of its Ladbrokes and Coral betting shops resulted in a 53 per cent drop in UK retail NGR from £586.8m to £277.9m, with the firm’s European performance dropping by 48 per cent to £75.5m (2019: £144.1m).
Shay Segev, CEO of GVC, commented: “Given the unprecedented trading environment, GVC has delivered an encouraging performance in the first half, underlining the strength of our diversified business model and the expertise, adaptability and dedication of our people. These results show that we have a strong foundation.
“As a technologist, I have huge admiration for what Kenny and the rest of my colleagues have achieved but I am also determined to pursue a programme of continuous improvement as we focus on our four technology-enabled priorities. These are leading the US market, organic growth, expanding into new markets, and being the most responsible operator in our industry.
“Our industry-leading technology will enable us to grow responsibly and sustainably, using our data-driven customer insights to ensure all of our customers have an enjoyable and safe experience while gaming with us. That is how we will deliver greater and more sustainable value for all our stakeholders.“
Furthermore, GVC has also detailed the identification of a number of key priorities to ensure the delivery of future growth for the group, which it says is “underpinned by operational competitive advantages”.
The four segments outlined are: deliver market leadership in the US, grow organically ahead of the markets in which it operates, expand into new markets and be the most responsible operator in the industry.
Regarding the former, which saw GVC and MGM Resorts commit to a second tranche of investment in its Roar Digital joint venture last month, the market remains a key driver for expansion for the firm.
Estimating that the US sports betting and online gaming market will be worth approximately $20.3bn by 2025, GVC has taken its BetMGM JV live across seven of 21 potential operational markets, with four more eyed by the end of the year.
Furthermore, GVC stated that it has applied for multiple sports-betting licences pursuant to the existing German online gambling regulation and ‘fully expects that its applications will be successful’. Brazil and The Netherlands were also recognised as key opportunities for the betting group’s expansion.