Prior to acquiring bwin.party, Isle of Man-based GVC Holdings was a multi-brand company with both B2B and B2C gambling operations in a plethora of jurisdictions. After the £1.12-billion-worth acquisition was finalised on 1 February 2016, GVC Holdings extended its footprint, added popular sports betting and gaming brands to its existing offering, and, as it seems, strengthened its position in the highly competitive online gambling environment.
The company’s latest financial reports and trading updates have shown that the bwin.party acquisition was a fruitful deal, or at least it seems so for now. During the first half of the year, the combined business’ first almost full six-month period, it posted financial results that satisfied expectations and were welcomed as further confirmation to the above statement that GVC Holdings has stricken a good deal.
Pro forma net gaming revenue amounted to €441.8 million during the six months ended 30 June 2016, reflecting an 8% increase from the prior-year period. Actual net gaming revenue increased from €120.9 million in the first half of 2015 to €390.6 million in the same six months of the current year. Pro forma clean EBITDA stood at €104.4 million, up 42% year-on-year. Actual clean EBITDA amounted to €91.2 million, reflecting an increase from €25.5 million from the previous year. GVC Holdings said in its H1 report that both its older brands and the newly acquired bwin.party brands performed more than well during the reviewed period.
In a recent trading update, the gambling operator and service provider said that the positive trends in its trading performance have continued in this year’s fourth quarter. As a result, the company’s board now believes that both full-year net gaming revenue and clean EBITDA will exceed expectations.
GVC Holdings reported a 12% increase in overall daily revenue for the period between 1 October 2016 and 12 December 2016. Daily net gaming revenue from sports betting operations increased 19% in the reviewed period. Daily revenue from gaming and other operations was up 8% year-on-year.
A little less than a year after the bwin.party acquisition, GVC Holdings has repeatedly highlighted the strength of all its brands and the fact that the deal seems to have beaten expectations.
Over the past year, the gambling company has significantly boosted its casino offering by signing strategic content supply deals with major providers, including Microgaming, Play’n GO, iSoftBet, Realistic Games, and several more.
As mentioned above, the Isle of Man-headquartered gambling group acts as an online gambling provider itself. In May, GVC Holdings became the exclusive online platform supplier of major UK bookmaker Betfred for a ten-year period.
In terms of expansion, the gambling company received the green light to operate in the newly regulated Romanian market. It previously ran its Sportingbet brand in the country under an interim license. In August, GVC Holdings was granted a permanent ten-year license to provide both sports betting and casino gaming options to Romanian iGaming customers.
The gambling company seems to be headed to a continued growth, product scope expansion, and increased footprint in regulated online gambling markets with both its own and the newly integrated bwin.party brands in its arsenal as well as its B2B arm.
Similarly to the other merger and acquisition deals to have been finalised this year, the GVC Holdings/bwin.party tie-up now, and for now, seems to be a profitable endeavour. However, it all shows that the UK (and the global) gambling environment will change significantly next year, which may urge a new wave of M&A activity across the industry. Given the group’s eagerness for growth, it will not be a big surprise if it joins M&A talks at some point in 2017.
- Author
Olivia Cole
