16th Mar 2020 14:50
(Alliance News) - Bookmaker GVC Holdings PLC warned Monday the cancellation of sporting events is to significantly hurt profitability.
GVC shares were 22% lower on Monday afternoon in London at 368.40 pence each.
The Covid-19 outbreak has caused a wide variety of sporting events to be postponed, including all major professional football leagues in Europe. GVC expects major horse racing events such as Aintree and Royal Ascot to also be cancelled.
In 2019, 45% of GVC's net gaming revenue came from sporting events, and 43% of online net gaming revenue also came from sports.
Isle of Man-headquartered GVC said it is difficult to accurately guide on how cancellations will hit earnings before interest, tax, depreciation, and amortisation, but it believes the impact for 2020 will be around GBP130 million to GBP150 million.
This would take a further GBP45 million to GBP50 million per month hit were GVC, which owns the Ladbrokes and Coral brands, forced to close bricks-and-mortar betting shops.
GVC is financially strong, it said, with GBP550 million of debt available.
Chief Executive Kenneth Alexander said: "While we do not underestimate the challenge presented by Covid-19, GVC is in a robust position to manage the impact on our operations. We are a diverse global business, with an experienced and expert management team, which operates across multiple products and markets.
"Our priority is to protect our employees while maintaining our offer to our customers at this difficult time."
By George Collard; [email protected]
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