SOLID START TO 2011 FOR GVC GROUP
28th March, 2011 at 02:11:35
But location to new domicile and litigation with Boss Media adversely impact FY profits
The Isle of Man-domiciled online gambling group GVC Holdings, which includes Casino Club, Betboo and Betaland among its subsidiaries, has released its 2010 full year and 2011 first quarter numbers, showcasing a solid start to the year.
Over the year, highlights included:
* Net Gaming Revenue increased by 5% to Euro 54.9 million (2009 Euro 52.1 million)
* Clean EBITDA of Euro 12.2 million (2009: Euro 17.7 million) following planned market investment of Euro 4.8 million and start up costs of Euro 700 000
* Planned investments and costs of re-domiciliation and Boss Media legal fees, led to a reduced profit before tax of Euro 4.1 million (2009: Euro 14 million)
The company reports that a significant marketing investment is being made in the Casino Club.com brand, and that last year's World Cup football was beneficial for both Betboo and Betaland on the sports betting side. Further investment was made in preparing Betboo for launch into new markets in South America.
Q1 2011 highlights:
* Record average daily NGR of Euro 172 000 (Q1 2010: Euro 157 000; Q4 2010: Euro 146 000)
* CasinoClub average daily NGR of Euro 83 000 (Q1 2010: Euro 79 000, Q4 2010: Euro 82 000)
* Total sports wagers averaging Euro 251 000 per day (Q1 2010: Euro 212 000, Q4 2010: Euro 190 000)
Management reported that the group's sports book for emerging markets went live on 5 January 2011, with encouraging trading already evident in the sports stake for March 2011 averaging Euro 64 000 per day
Commenting on the results, GVC chief exec Kenneth Alexander, said: "The Board has been encouraged by the improved conditions in the markets in which the group operates and the group has made a positive start to 2011.
"Betboo in Latin America and in the emerging markets sector has performed more strongly than expected, and the re-structuring of the earn-out should encourage further growth and allow greater investment in Latin America. The building of the Betboo brand outside Latin America will continue in 2011 and the Board expects that this will move into profitability in H2 2012. Our marketing investments in CasinoClub will also continue throughout 2011.
"The regulatory landscape has seen a number of changes during 2010, few of which have had an impact on GVC's core business. The Interstate Treaty in Germany expires at the end of the (2011) year and discussions amongst the German Lšnder have been taking place in 2011. It is too early to predict the outcome of these discussions."
Alexander said that GVC has now launched a new sports book, using in-house software, into new markets outside Latin America, and early indications are extremely positive. Betaland is continuing to deliver solid results in a highly competitive market.
The chief executive also gave an update on GVC's litigation against GTechG2's online gambling software developer, Boss Media.
"As reported in the Admission Document, dated 19 April 2010, the group initiated legal proceedings against Boss Media over an alleged infringement of its intellectual property. In the Maltese Courts the parties have filed various submissions in relation to jurisdiction. The Maltese Court is due to hand down its decision as to whether it has jurisdiction to hear the group's claim on 29 April 2011.
"Boss Media is attempting to have the case heard in Sweden and issued an Arbitration Request in Sweden. GVC has responded to this, challenging the Swedish jurisdiction. A date for the jurisdictional challenge has been provisionally fixed for 20 and 21 June 2011."
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Related News Tags: Boss Media, Germany, Casino Club, Sweden