Ladbrokes parent GVC sees profit beat as UK betting shops outperform
By Tanishaa Nadkar and Sangameswaran S
Aug 15 (Reuters) - Ladbrokes-owner GVC Holdings sees earnings beating expectations this year as its UK betting shops fare better than feared in the face of stricter regulation on fixed-odds betting terminals.
Its shares rose 5.5% to 577 pence by 0838 GMT, helping boost rival William Hill which rose as much as 7% a week after posting lower first-half profit hurt by the regulatory cap and costs of expanding in the United States.
It now expects to close about 100 fewer shops than previously planned, noting some customers had switched to other forms of betting as the terminals absorbed less cash.
It had already in May said the impact of the new regulations on core earnings would be 130 million pounds ($157 million) in 2020 versus an earlier estimate of 145 million.
"We've also seen a transfer of some of the lost revenue from the machines on to the other parts of the business," Chief Executive Officer Kenneth Alexander told Reuters on Thursday.
GVC, whose brands also include Coral, bwin and Foxy Bingo, said like-for-like net gaming revenue in its UK retail business fell a less than expected 10%, leading GVC to see an extra 10 million pounds in earnings.
Online net gaming revenue rose 17% on a proforma basis.
"The retail arm ... is beginning to absorb the impact of the ban on fixed-odds betting terminals and a more efficient operation is emerging as some outlets are closed," Russ Mould, investment director at AJ Bell, said.
The company now expects full-year core earnings in a range of 650 million pounds to 670 million, compared with an analyst consensus of 651.6 million according to Refinitiv Eikon.
Like other betting majors, GVC has been shifting focus to the rapidly growing U.S. market, which has exploded since sports betting regulation was eased.
It is looking to capitalise on the National Football League (NFL) season beginning in September and has scheduled a full online launch of its Roar Digital joint venture platform in New Jersey ahead of the games.
"The U.S. is the highest priority ... we have a clear plan in order to build up products and technology in anticipation of the start of the NFL season," Alexander told Reuters.
Underlying pretax profit rose 31% to 212.1 million pounds for the six months ended June 30. GVC said it would pay an interim dividend of 17.6p per share, up 10% year-on-year.
($1 = 0.8275 pounds)