GVC Holdings - Q4 trading update boosted by very favourable sports results; underlying demand broadly in line

Davy Research
/Read Important Disclosures

GVC’s post-close trading update points to a very favourable run of sports results in Q4. The gross win margin was 13.1% versus a long-term expectation of 10%. This resulted in revenues that were €24m, or 9%, ahead of our Q4 expectation. Normalising the outcome for the margin boost, underlying demand looks broadly in line with gaming growth across the sports brands – +14% versus our expectation of +10%. All told, the statement implies that 2017 EBITDA came in at circa €276m versus our forecast of €266m. We do not expect a material change in our future year forecasts as the Q4 beat was mostly sports results-related.