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03/12/2020
08:56 | wilco69: It’s just as well that GVC hasn’t been quoting odds on whether there will be a coronavirus vaccine before Christmas. The sports betting and gaming group, which could have done so via its novelty bets, might have been facing big payouts to optimistic punters after a treatment prepared by Pfizer and Biontech was yesterday granted approval for use in Britain as early as next week.
Indeed, the company has not been accepting gambles on anything Covid-related, though that’s not to say that it has ignored the virus, far from it. The pandemic will have come as a shock to a business used to reporting consistently healthy increases in earnings. In fact, the early months looked decidedly dicey, particularly in Britain, after football and horse racing were suspended and it was forced to shut its bricks-and-mortar shops.
Initially, the company warned that it faced a pre-adjusted hit to profits of as much as £100 million a month, but it halved this after cutting costs, including by putting staff on furlough.
GVC was founded as Gaming VC Holdings in Luxembourg in 2004, although, in the tradition that led Paddy Power Betfair to rebadge itself as Flutter Entertainment, it is preparing to change its name to Entain. The group has grown rapidly through acquisitions and operates numerous brands, both digitally and on the high street, including Ladbrokes, Bwin, Coral, Sportingbet, Foxy Bingo and Partypoker.
Its business is spread across 20 countries, employing 24,000 staff, and in its most recent financial year it made an underlying pre-tax profit of £535.8 million on revenues of more than £3.6 billion. It has particularly high hopes for its fast-growing business in the United States, where it has a joint venture with MGM Resorts, the hotels and casinos operator, and a sports tie-up with Yahoo, the search engine.
Its online business has been boosted during the Covid-19 outbreak as customers denied the mainstream sporting calendar turned to more esoteric sporting events, as well as casino games such as roulette and poker. This meant that at the half-year stage GVC was able to report an 11 per cent fall in net gaming revenue and a 5 per cent fall in pre-adjusted profit — less dire than might have been expected— as its digital businesses delivered double-digit growth in their main markets.
GVC is also beginning to move differently under the leadership of Shay Segev, the former chief operating officer of Playtech, the gaming software company. Mr Segev, 44, who became chief executive this year, has a technology background and plans to build on the strengths of GVC’s digital operations. He also plans to withdraw the group from unregulated markets and is going to press further into America, a high-growth sports gaming market that is liberalising its laws state-by-state. His aim is to increase GVC’s presence from nine states to more than twenty by the end of next year. The group has a market share of about 18 per cent in each state it is in. Mr Segev is keen not only to grow in developed markets but also to open in new ones.
GVC is guiding for profit before tax and other items of between £770 million and £790 million, which would be marginally ahead of last year and, in the light of the year it has been through, is highly respectable.
The shares, up 1½p, or 0.1 per cent, at £10.40, were avoided by this column in March and have risen sharply since then. Trading at 16 times Shore Capital’s forecast earnings for a prospective yield of 3.3 per cent, they are not expensive and have become a much more attractive long-term proposition.
Advice Buy
Why In a strong position to capitalise on growth in online sports betting and gaming, particularly in America
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26/11/2020
13:29 | wilco69: Numis- We hosted a call with Shay Segev, GVC’s CEO, following its strategy presentation last week. We remain confident that the company has the technology, the partnerships, the balance sheet, the vision and the people to drive this business forward as it targets tripling the business in 3-5 years. At 9x FY21 EV/EBITDA, BUY.
● “Double or tripling the business in 3-5 years” driven by the US, core online business and new regulated markets. Assuming the following by 2024: (i) GVC takes 15-20% market share of $20bn market (c.17% now), implying £2-2.5bn divisional revenue (100% of entity); (ii) Double digit p.a. growth of its core online business implies a £4.0bn revenue; (iii) Expansion into new regulated markets equivalent to 30 ‘PortugalsR17; implies a further c.£1.5-2bn. If all these targets are achieved, GVC could generate £8-9bn of revenue vs. c.£3.5bn this year (incl. £1.2bn retail), ie “doubling or tripling the business”.
● US could be a $50bn market in the long term: Shay suggested that the US online gambling market, in the long term could be worth $50bn, more than double their base case for 2024. Assuming all states were regulated, this would imply $150 spend per capita (vs UK c.£100 p.c.). Its partnership with MGM brings financial commitment, market access and a valuable customer database (25% of new actives are M-Life customers, typically worth x2). One of its key lessons in the US it to launch on day 1.
● Technology a differentiator: GVC is a technology-first company, with Shay's background perfectly aligned. They have 3,000 FTE IT developers, have a near-perfect track record on integrations (Ladbrokes, Bwin) and owning the full technology stack provides unrivaled agility, e.g. live on day 1 in a new state.
● Plethera of opportunities outside US: Shay mentioned multiple potentially interesting markets in Europe (Eastern), Latam (eg Colombia launch shortly) and (East) Africa. His priority is to focus on the larger regulated markets, which have material growth prospects. GVC would like to acquire a ‘#4 or #5’ in the market, migrate it to GVC’s platform, extract synergies and grow into the #1.
● UK Gambling Act review 12+ months away: Shay expects the review to kick-off in mid-December followed by a 3-4 month consultation process but likely not to be ratified until end of 2021 at the earliest. He agrees all restrictions already discussed should be “on the table” but it should be “evidence-based”. The stricter the restrictions, the tougher it will be on smaller operators and therefore market share gains would be likely.
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24/11/2020
15:29 | popper joe: GVC have never shied away from paying out special dividends. So if the board feel it
is prudent at present to withhold dividends, only for it to be realised at a later date that such prudence was unnecessary, then I'm sure we will get our slice of whatever is available. At least that would have been the case with Kenny at the helm. It is also worth noting that when GVC announced that they would be withholding the dividend earlier this year, the shares went up by far more than the value of the dividend because the market were in favour of such prudence.
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19/11/2020
07:22 | garycook: GM,Srp FYI GVC Drives Forward Safer Gambling Strategy with New Partnerships
19 November 2020
GVC Holdings PLC
(“GVC” or the “Group”)
GVC Drives Forward Safer Gambling Strategy with New Partnerships
As Safer Gambling Week begins, GVC Holdings, the global sports betting and gaming group, (to be renamed Entain plc) has today announced it is piloting two new initiatives to enhance the Group’s Advanced Responsibility and Care safer gambling programme (“ARC”), launched on 12 November.ARC deploys the Group’s proprietary technology platform and behavioural play data to provide end to end player protection and interaction. Utilising sophisticated real time monitoring and analysis tools it enables early intervention to improve player protection. The new partnerships with Future Anthem and Mindway AI, will complement these inhouse capabilities by utilising behavioural, neuroscientific and academic based algorithmic learnings to pioneer world leading harm minimisation solutions.
Working with Future Anthem, the independent specialist in game data, GVC will pilot their newly developed Anthemetrics Safer Play Responsible Gambling solution. The aim of the trial is to further enhance GVC’s existing detection technology to enable earlier identification of players who begin to exhibit potential early signs of problem gambling behaviours.
The Group will start a pilot with Mindway AI, the consultancy with expertise in neuroscience, neuroimaging and problem gambling, on their new and award winning Gamalyze self-identification test. This is used to provide participants with detailed feedback about their decision-making to provide advice and guidance on how they can best maintain control of their gambling behaviour.Shay Segev, GVC’s CEO said:
“As we set out last week with the launch of ARC, our new Safer Gambling programme, we are committed to leading the industry on safer gambling issues. Our proprietary technology provides us with unparalleled insight into player behaviour and we are now enhancing this capability by working with partners to provide additional scientific based insight.”
Leigh Nissm, CEO of Future Anthem said:
“We are delighted to be working with a market-leader such as GVC, who have demonstrated their commitment to improving player safety and taking a science-led approach to player protection. We are excited to demonstrate how our Game Data Science solution will enable GVC to build on this approach, delivering even greater insight in to their player behaviours on casino games.”
Rasmus Kjaergaard, CEO of Mindway AI said:
“Over the past two years GVC have been at the forefront of tackling the issue of problem gambling and we are proud that they are piloting our Gamalyze self-test to provide their players’ with another tool to understand and stay in control of their gambling.” Today’s announcement comes in the same week in which the Group’s existing efforts in safer gambling, were recognised at the EGR industry awards, where GVC was named as ‘Safer Gambling Operator of the year’. It also follows the launch on 12 November of GVC’s new strategy for sustainability, growth and innovation along with its new Sustainability Charter. The Group also announced its intention to rebrand as Entain plc following the requisite shareholder approval.
ENDS
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12/11/2020
15:17 | wilco69: From Jefferies- An underwhelming CMD offers an attractive entry point, given current valuation and the US opportunity. The focus, as expected, was on: 1) Governance and responsible gaming (timely given pending UK regulatory activity); 2) US growth; and 3) Competitive advantage from GVC's proprietary tech platform. The heavily featured eSports opportunity may add a new area of uncertainty. The name change to Entain will allow some distancing from past GVC issues.
Main messages: We flag the 10 key CMD charts below. Key messages included:
Competitive advantage from proprietary technology and data-driven customer insight. The product argument contrasts with the DFS operators first mover advantage / marketing spend / aggressive sports margin position;
Strategy to facilitate double-digit core growth from further diversification of products (from sports, casino, poker) and new geographies;
Three regions were flagged as expansion opportunities, without specific plans: Africa, Latin America, and central Europe; eSports to be explored as rapidly growing opportunity (forecasted to be $1bn by 2024), with potential acquisitions to grow GVC's presence. A lack of eSports regulation and younger audience may raise concerns of future risk;
A focus solely on regulated markets, with GVC to exit all unregulated markets (c3% of NGR);
Strong balance sheet and deleveraging scope (dividend to return in FY21E?);
Possible interest in the William Hill online assets;
Re-emphasising a commitment to responsible gaming - with a £40m cost attached - looks timely, given the upcoming review of the 2005 UK Gambling Act, expected to focus on Online.
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11/11/2020
08:03 | dr knowledge: Nice mention (and broker upgrade) on Citywire..............
Peel Hunt: GVC’s tie-up will help it catch up in the US
GVC’s (GVC) joint venture with MGM will help it catch up with competitors who have had a head-start in the US, says Peel Hunt. Analyst Ivor Jones reiterated his ‘buy’ recommendation and increased his target price from £12 to £16. The shares were trading at 985p yesterday. ‘We believe that GVC’s [joint venture] BetMGM is going to be increasingly successful in the US, as the same operational excellence that has driven outperformance elsewhere helps it to catch up with longer established competitors, who enjoyed a daily fantasy sports head-start,’ he said. Jones said if the joint venue achieved a 15% US market share, ‘it could result in $324m of 2025 earnings for GVC, with a present value of £3.7bn’.
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10/11/2020
11:39 | coxsmn: https://www.proactiveinvestors.co.uk/companies/news/933573/flutter-downgraded-by-peel-hunt-on-strong-share-price-performance-gvc-and-888-targets-hiked-as-broker-assesses-us-market-opportunity-933573.htmlPeel Hunt revisited its forecasts for other London-listed gambling firms exposed to the US sports betting and online gaming market and concluded that both Ladbrokes owner GVC Holdings PLC (LON:GVC) and 888 Holdings PLC (LON:888) were "undervalued" than previously thought. As a result, Peel Hunt raised its target for GVC to 1,600p from 1,200p and retained a 'buy' rating, while 888 was also kept at 'buy' while its target was lifted to 350p from 300p.
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09/11/2020
08:43 | garycook: GVC Powered BetMGM Strengthens Market-leading Gaming Offer with Premium Content Providers
9 November 2020
GVC Powered BetMGM Strengthens Market-leading Gaming Offer with Premium Content Providers
– Launch of Evolution Live Dealer Games in NJ proves hugely popular with customers-
– BetMGM now the only operator in the state with access to both live casino providers in the market
– Other new products through partnerships with Playtech, DGC and Ainsworth GVC is pleased to announce that BetMGM, the US sports betting and gaming company created in partnership with MGM Resorts International, has successfully launched its new live casino product, in partnership with Evolution. This complements BetMGM’s already market-leading gaming portfolio, and is further strengthened through the recent addition of industry leading slot content from Playtech, DGC and Ainsworth.
The addition of Evolution’s Live Dealer Games to GVC’s US platform which powers BetMGM, uniquely positions the company as the only operator in New Jersey to offer its customers content from both live studio providers in the state. The games are available in the state through BetMGM, as well as sister brands Borgata Casino and PartyCasino.
Initial user data has shown the new content to be a huge hit with players. In the first seven days following its launch, Evolution generated a third of total Live Casino stakes in New Jersey with BetMGM seeing Live Casino revenues increase by circa 30% month on month. Customers now have access to an even wider range of live poker, blackjack and Baccarat games, with Evolution’s American Roulette proving the standout favourite since launch.
This continues GVC’s phenomenal track record of integrating premium content to enable BetMGM to grow its market leading position, offering customers new content ahead of the competition. The company was amongst the first to launch Playtech’s gaming portfolio in New Jersey and similarly led the way with an exclusive integration with DGC (Digital Gaming Corporation), all of which have proved to be a huge hit with customers.GVC also integrated and launched 20 exclusive online slot games for BetMGM with Ainsworth in New Jersey, including popular land-based slot titles, such as ‘Mustang Money’ and ‘Eagle Bucks’. The games were available on BetMGM for the first time online.
BetMGM’s customers also benefit from rich and exclusive content delivered through GVC’s proprietary in-house Games Studio as well as premium MGM-branded slot games and sizeable jackpots. BetMGM operates the largest in-house progressive jackpot network in New Jersey with one very lucky customer winning recently $3.2M.
Colin Cole-Johnson, GVC’s Director of Gaming Product commented:
“These launches are a powerful demonstration of how GVC has helped BetMGM secure a market leading position in the US. Our ability to build partnerships and integrate premium content from providers such as Evolution has enabled us to deliver our customers cutting-edge gaming which is without parallel anywhere in the market. We are incredibly excited by the opportunity ahead of us as we expand our offering with new products and new states.”
Matt Sunderland, BetMGM’s VP of Gaming added:
“The GVC platform with its breadth of new and exclusive content, supported by sophisticated marketing and customer engagement tools, has established BetMGM as the clear market leader in iGaming in New Jersey. These same attributes put us in pole position to deliver a compelling customer offer which will establish us as a leader as new markets open up on a state by state basis.”
ENDS
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23/10/2020
07:48 | garycook: If I were to list my top FTSE 100 stocks right now GVC Holdings (LSE:GVC) would definitely make the cut. GVC has seen its sales increase during the economic downturn caused by the Covid-19 pandemic.
GVC is one of the world’s largest sports-betting and gaming groups, with operations online and in the retail sector. It operates in more than 20 countries with approximately 24,000 employees. GVC’s brands include bwin, Coral, Ladbrokes, Gala, and Foxy Bingo to name a few. It also provides third-party services to customers on a B2B basis.FTSE 100 champion
GVC has grown tremendously over the past decade or so. It has strategically acquired many smaller contemporaries across Europe and beyond. Acquisitions show me a business is thriving, progressing, and ultimately has the ambition to grow.
When the market crash occurred, GVC lost approximately 65% of its share price value. In mid-February, shares were trading for 930p per share. Fast-forward a month and GVC was a FTSE 100 bargain with shares trading at 325p per share.
At the time of writing, GVC’s share price has made an excellent recovery and shares are trading for over 1,000p per share. This has surpassed pre-crash levels. Based on its current price, shares are trading at a PEG ratio of just 0.5. In my opinion this means the stock offers a healthy margin of safety.
Recent performance.GVC released a Q3 trading update earlier in October that showed positive results despite the economic downturn. Group gaming revenue rose by 12%. Online activity rose by 26%, which would have offset the slight decline in the UK retail market which fell by 5%. EU retail actually rose but by a marginal 2%. This was the 19th consecutive quarter of double-digit growth for GVC. Not many FTSE 100 firms can claim they have achieved such a feat. In addition to this, it reported market share gains in all major territories too.
GVC has recently entered the US market with a new venture and I believe this could be key to further growth. In the update, GVC confirmed that it had now gone live in eight states and US revenue is expected to surpass initial expectations. It also announced another acquisition in the form of a major online gambling operator in Portugal that will further enhance its market share. Despite the pandemic affecting its retail business, GVC confirmed that all of its retail outlets were now open and volumes were within 10% of pre-Covid-19 levels.Growth to continue?
One of the key questions that GVC may face is whether it can keep up its rapid growth. I honestly believe it can. Some may consider its current price slightly expensive, however, I believe GVC is a still great opportunity right now at its current price.
One of my Foolish colleagues wrote about GVC a few months ago. He noted how GVC’s stock has produced an average annual return of 27.2% for investors over the past decade, which is seriously impressive. If you compare this to the FTSE 100 as a whole, the average total return is 5.8% across the same period. This provides some perspective as to how well this once small start up has done and how it has grown into one of the largest gaming brands across the world.
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08/10/2020
07:12 | wilco69: in a nutshell: GVC has again produced an outstanding set of results, with the Online division’s net gaming revenues (NGR) +28% at constant currency (cc), the company’s 19th consecutive quarter of double- digit growth. Following strong underlying performance, GVC has raised FY20 EBITDA guidance to £770m-790m from £720m-740m, a c7% increase at the mid-point. US momentum remains strong and GVC estimates that it has a 17% market share in the US states where it is present.
● NGR Growth strong at 14%: Online NGR grew by 28% in Q3. A crowded sporting calendar led to exceptional wagering growth (+25%), with online gaming NGR continuing to track ahead of pre-COVID-19 levels (+28% at cc). UK Retail volumes have rebounded to within 10% of pre-COVID-19 levels, contributing to a 5% decline in NGR on a like-for-like basis. Furthermore European Retail NGR grew by 2%, reflecting a good performance in Italy that offset a slower recovery in other geographies.
● Strong US momentum: Launches in Indiana, Colorado and West Virginia have yielded market shares broadly in line with the company’s expectations of 15-20%. On the whole, GVC estimates that its BetMGM brand currently has a 17% market share in sports-betting and iGaming across the states in which it operates. With BetMGM tracking ahead of expectations, GVC has raised its estimates for net revenues from the US to $150m-160m (from $130m). The share of losses for the joint venture are expected be £60m this year, up from the previously expected £40m.
● Bolt-on acquisition: The company also announced today a bolt-on acquisition in the nascent but fast-growing Portuguese market. bet.pt, one of the earliest entrants to the market, is a leading online operator in Portugal and could contribute c£10m to EBITDA in FY21.
● Changes to numbers: We upgrade our FY20 EBITDA estimates by 6%, reflecting the strong Q3 performance and subsequent increase in guidance. We are, however, including the impact of the implementation of the German Tolerance Policy in our numbers, leading to a c3.5% downgrade to our FY21 EBITDA estimate. While the expected impact in FY21 from the changes in Germany equates to £70m in absolute terms, we reduce our FY21 EBITDA estimate by c£30m, reflecting the robust performance of the company in Q3, as well as the acquisition of bet.pt.
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PLUS1
