How pleased are you with the results of Q4 2016?
I am very pleased indeed. We have achieved outstanding operational and financial performance over the past six years, and I am delighted that this positive trading momentum is continuing with a particularly strong start to 2017. One key metric is the pro forma daily NGR, and the month of January was up 21% against the same period in 2016. I am delighted to have led GVC’s growth from a single product, single market company in 2004, to a main market leading multinational B2B and B2C operator with a market cap of c.£2.0 billion.
What were the driving factors of success for Q4 2016?
One of the main drivers has been our largest and most ambitious acquisition to date: that of bwin.party last year. We have achieved and exceeded many of our integration objectives, synergies are ahead of forecasts, and we are now seeing increased profitability across the enlarged Group. I would also add that GVC’s diversified business model and expertise has proved resilient. We benefit from our geographical diversification, with operations across the UK, Latin America, Eastern Europe and Western Europe. An important part of GVC’s strategy is to maintain exposure to regulated markets – and preserve its strong position with regards to still-to-be regulated markets – in order to provide diversified revenue streams.
We remain on target to secure €125m of synergies from the bwin.party acquisition by the end of the current yearKenny Alexander
Did you anticipate any negative effects of the unfavourable sporting results that have challenged other gaming operators during Q4?
We didn’t anticipate that the punter-friendly Premier League results would have a significant impact on GVC, and this proved to be accurate. Broadly speaking, we are usually cushioned against unfavourable sporting results because of the diversity of our business both in terms of our international profile and through our balanced portfolio of sports and gaming brands.
In your opinion, what was the cause of the 22% increase in revenue for January 2017?
Although we shouldn’t get too carried away with comparisons of a single month year-on-year, GVC’s acquisition of bwin.party means it is now a much bigger and more powerful company; We have reinvigorated the bwin platform, are returning the business to growth, and delivering the synergies that we set out to achieve. The difference in sporting results between the two periods also played a significant part in this growth.
Do you expect similar growth of this kind throughout this year?
We are certainly confident in GVC’s continued growth and resilience. As stated in the Trading Update, we remain on target to secure €125m of synergies from the bwin.party acquisition by the end of the current year, and we are see a lot of organic growth opportunities for the Group in 2017 and beyond.
With the completion of the bwin.party process, could you provide an update on how the integration process is going?
It is going very well. We have achieved the synergies earlier than expected and have successfully renovated the bwin.party platform. GVC’s Sports Labels (bwin, Sportingbet, gamebookers) are performing well, and margins in the business we acquired have materially improved. We have also repaid the outstanding Cerberus loan in full through a combination of existing cash resources and the drawdown of the €250m loan from Nomura, which will reduce our interest payments by around $40 million.
How do you predict this acquisition will benefit the company throughout 2017?
We will continue to see benefits from the diversified business model and synergies. Also having spent the past year improving behind the scene operations and the product offer, we are now in a position to ramp up marketing and connect with a larger customer base.
Do you foresee any more acquisitions for the company in the near future?
We are excited about the organic growth opportunities for the Group and we remain alert to further industry consolidation.
What other highlights can we expect from GVC in 2017?
Our strategy to pursue international diversification and scale through the leverage of our proprietary technology and talented people will continue in 2017.
