Ladbrokes Coral owner GVC has upgraded its full-year earnings forecast as it weathered the impact of a new regulatory cap on fixed-odds betting terminals.
GVC reported pre-tax profit of £212m for the first half of the year, up 31 per cent from 162.1m in the first half of 2018.
Revenue at the gambling group also rose, hitting £1.78bn – a five per cent increase on the same period in the previous year.
The group, which bought Ladbrokes Coral for £4bn in March 2018, had expected the new betting cap to dent earnings by around £120m over two years and result in the closure of around 1,000 shops, but it has now said only 900 shops would close.
GVC now expects its full-year operating profit to be £10m above previous expectations.
GVC also announced a ten per cent increase in its dividend per share, which now stands at 17.6p.
Shares were up 2.8 per cent in morning trading to 562.20p.
Why it’s interesting
The introduction of a £2 cap on bets made at fixed-odds terminals in April hasn’t hit GVC as hard as it was expecting it to, and the group said that “overall impact in the quarter following implementation was better than initial expectations.”
The new regulations were introduced following complaints that previous rules governing the machine, which had let gamblers bet up to £100 every 20 seconds, made them highly addictive and easy to make huge losses on.
GVC’s results update was far more bullish than that of its rival William Hill last week, which reported a pre-tax loss of £63.5m for the first half as the cost of US expansion and the betting cap began to bite.
What GVC said
Kenneth Alexander, chief executive of the gambling group, said the first half results were “extremely pleasing”.
“Our online operating model is proving highly effective,” he continued, “building on the sustainable competitive advantages of our wholly owned technology platform, leading product, cutting-edge marketing, leading brands and local execution, which are all delivered with an unrivalled understanding of the markets in which we operate.”