Online gambling group GVC Holdings plc has released a trading update for the first six months to 30 June 2010, showing that overall trading has been in line with expectations, with net gaming revenues for H1,2010 up 8% at €28.5 million (H1,2009: €26.5 million), and up 4% on H2-2009's €27.5 million.
The Group ceased operating its loss-making Spanish focused bingo brand, Winzingo, in April 2010 and now has three core brands: CasinoClub, Betaland, and Betboo.
Management reports that in sports trading the overall gross win margin was 12.8%.
The Betaland margin was 16.1%, but there was a small trading loss from Betboo due to disappointing sports trading results during the Brazilian soccer season. Total stakes amounted to €38.9 million, up 38% on H1-2009 (€28.2 million) and up 59% on H2-2009 (€24.5 million).
The mainly German-facing online casino operations at CasinoClub suffered from a weak economic climate and fierce competition, leading to a further decline in which revenues per day fell to €75.7k from €83.2k in H1-2009 and €79.2k in H2-2009.
The decline has seen GVC invest in both retention and acquisition marketing to defend its highly profitable CasinoClub business. Around €2.8 million was incurred in the H1-10 period compared to around €1.5 million in H1-09. The inevitable consequence of this is that contribution margin from CasinoClub is expected to be closer to 60% rather than the 70% achieved in H1-2009.
On the positive side, both the number of average customers per day and the number of active customers per month grew reflecting the impact of the additional marketing expenditure. However, the average expenditure from customers continues to decrease.
Sportsbook operations at Betaland continued to grow strongly, seeing an 18% increase in the number of bets to 2.7 million; and a 10% increase in the number of customers to an average of 9,700 per month (H1-2009: 8,900), although the average bet size fell from €13.7 to €11.4 reflecting the more recreational nature of players recruited.
Gaming revenues performed strongly and rose 22% to €7.1 million (H1-2009 €6.0 million; H2-2009 €5.7 million).
Management reports that the first year of ownership of Betboo has been successful and the Board remains confident about its long-term prospects in the rapidly developing South American economy. The sportsbook has seen material growth, and a strengthening of the trading team is expected to result in improved margins.
Gaming revenues are largely bingo-driven and have increased from around €10k per day in January 2010 to around €20k per day in the first 19 days of July 2010, whilst the average over the six month period was €13k.
Betboo will likely be the brand used by GVC for the launch of a new European Sportsbook, which is expected to be live in early Q4-2010.
The trading update makes specific reference to the litigation with Boss Media, reporting that court proceedings in Malta are scheduled for 4 October 2010. The Board will continue to vigorously defend the Group's intellectual property and continues to pursue a number of claims against Boss Media, Management said.
Trading since the end of the H1,2010 period has benefited from the recent World Cup football tournament in South Africa, with sports revenues in the first 19 days of July 2010 totaling Eur 500,000, representing a 20% hold. Total average daily revenues for the first 19 days of July 2010 were €27k from sports and €122k from Gaming, a total of €149k per day, an increase of 30% compared with €115k per day for July 2009.
After the payment of the special dividend on 28 June 2010, and approximately €1 million of costs associated with the re-domiciliation and re-admission to AIM, the Group's cash position at Friday 16 July 2010 was €4.5 million, equivalent to €0.145 per share.
GVC expects to release its interim accounts on Tuesday 28 September 2010.
Source: InfoPowa News