Financial Report Confirms Online Innovations Are Crucial for GVC

Ladbrokes Coral owner GVC has called 2018 a “transformational” year after its online assets helped cancel out losses in the UK retail sector.

GVC Ladbrokes betting shop

GVC may have to close hundreds of Ladbrokes betting shops as it looks to enhance its online business. (Image: Insider Media Limited)

Commenting on its recent annual report, GVC boss Kenneth Alexander noted that online growth was “very strong” but costs saw the gaming operator lose £18.9 million before tax.

As per the report, net gaming and total sales both increased by nine percent. But despite revenue in both areas topping £3.57 billion and £3.52 billion, acquisition costs and back-tax added £434.2 million in charges to the balance sheet.

Ups and Downs as GVC Evolves

Discounting the unexpected charges, GVC’s profits actually improved to £434.6 million. Indeed, with the costs seen as a necessary expense, forecasts for the company remain strong.

Topping the list of costs was the takeover of Ladbrokes Coral. Completed in March 2018, the £4 billion deal gave the gaming operator a much larger stake in the UK retail market as well as the online arena.

Using this as a base, the company went on to forge a deal with MGM Resorts following the repeal of the Professional and Amateur Sports Protection Act (PASPA) in the US.

More recently, GVC extended its relationship with gaming supplier Playtech, giving it greater “flexibility” in the online sector. In fact, it’s this increased proficiency online that GVC will use to offset retail losses in the UK.

As outlined in the report, retail sales fell by three percent in 2018 and further losses are expected when April’s fixed odds betting terminal (FOBT) come into effect. In light of these hurdles, GVC has said its online portfolio, which includes Ladbrokes Coral and Partypoker, will take on a more significant role.

Online Innovations to Keep GVC Profitable

Like William Hill, GVC has warned that betting shop closures are inevitable. However, with its online operations expending, bosses believe the British market is still in “very good shape.”

“2018 was a transformational year for the Group with the completion of the Ladbrokes Coral acquisition in March making the Group the largest online-led sports-betting and gaming operator in the world,” said GVC CEO Kenneth Alexander.

For UK gamers, the coming months are likely to produce further online innovations. As reduced FOBT betting limits threaten to make high streets shops unprofitable, more operators will be turning their attention to the internet.

While that may lead to job losses in the retail sector, the upside for gamers will be an increase in betting options, offers and features as the top brands compete for online supremacy.

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