GVC reports 21% online revenue rise as gaming growth softens Covid-19 impact
H1 net gaming revenue drops 10% despite double-digit digital growth in all major territories
GVC has reported a 21% increase in online net gaming revenue (NGR) for H1 2020 as strong digital growth softened severe retail declines due to Covid-19.
Total group NGR fell 10% for the first half of the year on a constant currency basis, while online NGR increased by 21% with double-digit growth reported in all major territories.
Online sports NGR rose 8% in H1 despite most top-tier sports fixtures being wiped out by coronavirus throughout March and April.
Online gaming growth in H1 was strong, rising 32% on a constant currency basis.
GVC said its diversified geography and product offering eased Covid-19 impact as sports were cancelled and retail outlets forced to close, noting particularly strong performance in Australia.
UK retail revenue plunged by 50% in H1 due to store closures for much of Q2, while European retail declined by 47% for the same reasons.
It was a similar story for the FTSE 100 operator in Q2, where total NGR tumbled 22% despite strong online growth of 23% on a constant currency basis.
Online sports NGR decreased by just 4% in the second quarter, as online gaming enjoyed a significant boost of 46%.
Online gaming continued to trade ahead of expectations, even after sport returned according to GVC management, albeit below peak levels during the quarter.
UK retail was negatively impacted to the tune of 86% following shop closures, while that figure dropped to 90% on the continent.
All GVC-owned Ladbrokes Coral retail stores reopened in England on 15 England, while Wales, Scotland and Northern Ireland soon followed suit.
GVC CEO Kenny Alexander
GVC CEO Kenny Alexander, who announced his retirement from the firm alongside the trading update, said: “Given the extraordinary circumstances in which the group is currently operating, delivering double-digit online net gaming revenue growth in all of our major territories is a very strong performance.
“It is a clear testament to the strength and diversification of our business model, the quality of our technology, the enduring appeal of our brands, and the talent, commitment and professionalism of our people.
“We have worked hard to achieve our target of operating at cash neutral throughout the lockdown period, which has enabled the group to retain the necessary financial strength to be able to take advantage of growth opportunities as and when they are presented to it,” he added.
Significant events during H1 included the complete migration of the acquired Ladbrokes and Coral brands as overseen by new CEO Shay Segev, formerly chief operator officer for the group.
The London-listed operator also pledged to increase its investment in its US-facing joint venture with MGM Resorts to $450m.
GVC’s full H1 2020 results will be announced on 13 August.