The shares of one of the largest gambling companies in the UK, GVC Holdings, experienced a surge on Monday trade, despite the company published a first-quarter trading update revealing expectations for significant monthly losses because of the Covid-19 pandemic.
The share price of GVC Holdings rose by 18.5% to close at 573.2p on Monday afternoon. Previously, the gambling operator had noted that the global closure of retail gambling hubs and cancellation or postponement of international sports events was expected to reduce its monthly earnings before interest, tax, depreciation and amortisation (EBITDA) by about £100 million on a monthly basis before mitigation. The gambling company, however, explained that mitigation opportunities had been identified, which had cut costs by about £50 million per month.
Now, the owner of Ladbrokes Coral shared that its average monthly cash outflow is expected to amount to approximately £15 million on a monthly basis. The company further shared that it was working through further mitigation as part of its efforts to achieve a break-even monthly cashflow.
GVC Holding further revealed that it had decided to withdraw its second interim dividend that had to be paid on April 23rd.
GVC Holdings’ CEO Says the Company Maintains Stable Performance in Q1
As revealed by GVC Holdings, the company has informed its landlords that it would withhold the rental payments it owes for the brick-and-mortar betting shops across the UK until normal trading conditions resume. Recently, the gambling operator was forced to shut its retail gambling operations as part of the UK Government’s measures to prevent the further spread of the coronavirus infection.
Kenny Alexander, the chief executive officer of the company, explained that the numbers for the first-quarter trading of the gambling operator once again proved that GVC Holdings was a business that was able to deliver an outstanding performance in normal circumstances. Mr Alexander, however, shared that the Covid-19 pandemic posed an unprecedented challenge to the company’s business and the entire industry.
As Mr Alexander shared, the company is responding decisively to the challenges posed on the way, and confirmed that the gambling operator had unveiled certain measures to keep its people safe, as well as to bolster its financial position, preserve jobs, and limit the cash outflow.
According to the company’s reports, GVC Holdings revealed that it had started 2020 before the impact of the recent coronavirus infection outbreak, with its group net gaming revenue rising by 1% and its online net gaming revenue experiencing a stable 19% increase over the first fiscal quarter of the year.
Despite the absence of live sports events worldwide, the UK gambling group has managed to maintain its encouraging performance since March 15th, as the postponement and cancellation of all major sporting events on a global scale have seriously hurt the performance of bookmakers not only in the UK but also across the world.
- Author
Olivia Cole
