Slightly surprised the shares didn't rise more today. GVC is in a different place than some of the other betting shop groups. More international, more brands, more online, and most importantly GVC will not have to pay the contingent rights payments to former Lads/Coral shareholders.
On the reduction to £2. This could end up in the long grass for two or three years. While DCMS are recommending £2, this has to go through Cabinet 'write round' process. Some ministers may oppose. It then has to go through Parliament, which will probably be straightforward in terms of votes, but the parliamentary timetable is currently chocker with Brexit related legislation, which is a higher priority for the government and more time sensitive. Quite how parliament will find the time for this to go through: committee; debate; and, a vote in both houses is anyone's guess. Because of this and as the industry has asked for an implementation period, I predict FOBTs with current stakes will be in use until early 2021 at least - after Brexit is complete.
I checked with Stockopedia to see whether their list of Board directors was correct. They confirmed that Hornby is COO of the combined group and does not have a place on the GVC board. On the other hand, he clearly has a place of high influence and responsibility which some will find worrying.
So now we know & at least this was factored in to the purchase price.Addicts of any type will always find a way to fuel their addiction & IMO todays announcement will not protect them.They may gamble more in bookie on racing , go online,join casinos either way todays announcement is merely paying lip service to attempting to help vulnerable gamblers.I expect our store closure plans will be accelerated such that all most units at end of lease will not renew & that our Retail estate in a year or two will be substantially reduced.Our SP may well fall today ,giving shorters a profitable Exit , but Kenny expected & planned for this & while being disappointed will already in the process of implementing Plan B, which was probably Plan A & no doubt we will hear much more on 25th
I have tried unsuccessfully to contact GVC by phone. The phone number on the website is now no longer in use. Spoke to the Registrars and the media enquiries people but nobody was prepared to give me the company phone number. I was given an email address by media enquiries but I've already sent an email to which there has been no reply. I now intend to write to Kenny Alexander to enquire what position Andy Hornby holds within the company. Below is a link to a newspaper article about Andy Hornby
Thanks very much for the posting. I admit that I am surprised at the apparent lack of concern regarding Andy Hornby holding any kind of executive position within GVC given his track record for disaster. I would very much like to know what his position is within the company and will either continue to hold the shares or sell out completely, depending what his role is. I have sent an email and phoned the investor relations number repeatedly, without any response. Time to try again. if I get any info I'll of course post it to the board.
Stadium - Leading provider of software and Technology for race & sports books in Nevada
Betboo - online bingo, sportsbook, casino and poker access to South American customers.
Casino Las Vegas - ? Looks like American in name only but could be wrong.
MGM Resorts international - the US casino operator which is licensed to operate online poker and casino games in New Jersey.
Also like previous posted said we've got some good brands that will be recognised thanks to sponsorship etc.
1) the deal was constructed such that GVC dont pay anything for machine gambling at £2.... no value perceived so nothing paid. Irrelevant to GVC earnings excluding Ladbrokes as was completely immaterial to their business anyway
2) GVC are global not UK centric so any tax rises in Uk to compensate are again likely to be marginal
3) gambling is pretty price inelastic so GVC will just pass some/all of it on with no/little drop in demand
Markets dont half over-react to sentiment....... now the others with big earnings in that space I can understand.
"Having endured months of boardroom turmoil and without a permanent leader since November, today's trading update from LSE:LSE:London Stock Exchange has come as a welcome relief for investors.Total income rose by 13% year-on-year to Â£520 million ..."
"Shares in William Hill, GVC Holdings and Paddy Power Betfair were among the biggest fallers this morning after reports that the government intends to slash the maximum stake on fixed odds betting terminals to £2.
Shares in GVC, which owns Ladbrokes Coral, had dropped five per cent, while William Hill shares initially fell 12 per cent. Paddy Power Betfair was down three per cent.
A consultation by the Department for Digital, Culture, Media and Sport had examined whether maximum bets should be cut from £100 to either £50, £30, £20 or £2, and reports out today say Chancellor Philip Hammond is primed to opt for £2. He will look to replace lost revenue through higher taxes on other forms of gambling.
The machines have been in the spotlight due to concerns they encourage problem gambling."
Those remaining must be doing their cohinas & generating very healthy losses for their funds & as a trading update is due soon ,allbeit too soon for too much positive rhetoric regarding our latest acquisition, & it is likely to be very positive which, with some good fortune will see the continuation in the recovery of our SP.
I have big concerns about Andy Hornby being involved in the company following the takeover of Ladbrokes. It was mooted in the Daily Mail last December that he was a senior executive in Coral and may now become Chief Operating Officer of the new group following the merger. Given that he was involved in bringing HBOS to its knees and according to the Mail, "was notionally at the helm during the large fraud and cover up at HBOS Reading branch," I have been trying to contact GVC Head Office for clarification. Unfortunately, the phone number shown on the GVC website is permanently engaged and I do mean permanently - every day!! Also, the company does not reply to emails sent asking questions. For a company that claims to aspire to FT100 listing, this is totally unacceptable. I have been a shareholder in GVC since early 2006 but if Andy Hornby has any role of influence in the group I shall take the money and run.
If anyone has any more info on this I would be grateful to hear.
As a new GVC shareholder following Ladbrokes takeover just wondered if I sell my holding in GVC now will I still be entitled to the CVR payment which may I believe take 12 to 18 months for payment to be made?
It will be interesting to see how the bull/bear battle will settle here as we are massively sold short , probably by over 18% ( including shorts under 0.5%) of our issued shares as of yesterday.If some or all feel they should either take their modest profits or cut their modest losses substantial buying pressure would ensue.Perhaps the shorts expected our SP post acquisition to drop to 600/700p & I am hoping they will be severely disappointed.
You should read yesterday's Times, but very impressive growth last year,this year started with high double digit growth,Bwin fully integrated with synergies as expectedly (or better),solid 5% yield,expected substantial potential from Lad/Coral acquisition for further growth in regulated markets overseas ( e.g. US).
I am not wild about owning over 3000 small retail units with all costs & prospective issues,but Kenny must have a cunning plan in that respect .
I appreciate that professional shorters often turn out to be right (but not always) & I preume that some hedges feel that the substantial number of new shares in issue will result in an overhang which will suppress our SP & that this really is a deal too much for Kenny .Kenny ha achieved a spectacular amount with GVC over the , taking it from a tiny company in its sector to being 1 of the biggest players & I will be staying for the ride
Great results & our current year has started extremely well.It will be interesting to see how Kenny manages the integration of Lad/Coral as it will be an entirely different ball game to integrating Bwin.I wonder whether they may be a plan to divest the retail operation at some point as the strength of GVS as a company has always been its technology platforms & bricks & mortar is very much yesterdays news.He is obviously totally aware of & will have factored in the costs involved in closing down retail operations & it will be fascinating to see how it pans out over the next year or two.
No plans on selling any of my shares
Well I have given you two good reasons in my last post ai 11.42 todau. Surprised it is only 5% shorted. You saw whaat happened to the High Street betting outfits when the regulation change rumours came out in the last week or so, Down by 20%+. GVC is not in the same ball park, but is joining them with the takeover. The Greek situation, which they may win or lose, is serious money.....and they are already going to be paying monthly, into an escrow fund, win or lose, and I guess that it will go on for some time with all the legal expenses and uncertainty. The Greek Government is not exactly flush and will be keen to get any extra funding. The gambling industry must be regarded as fair game.
I repeat - take your winnings (remember gamblers rarely win - see the figures for Plus 500 and IG index!) and run.
Although GVC were not running the operation in the period concerned, they are making a provision of 200m Euros just in case, as well as paying intoo an escrow fund approx 8 million euros a month. The potential on GVC profitability is not unsubstantial - 200m euros on 2017 accounts. Together with the uncertainty as to the wisdom of buying a huge high street betting company, even with allowances for lower regulated betting terminal limits which could coem down from £100 to £2 every 20secs, perhaps the management have run out of a combination of steam and / or luck. The risks are rising. The SP has done very well so far. Now, I rate them a strong sell.
The quote from Alliance News, always unfortunately just after the London market had closed last evening stated the following:
GVC Holdings PLC said Thursday it faces a EUR186.8 million bill from the Greek tax authorities following an audit assessment, which the online gaming firm said intends to appeal but added it has made a EUR200 million provision.
The FTSE 250-listed firm said one of its subsidiaries which was operating under an interim Greek gaming licence received the tax audit assessment from the Greek Audit Centre for Large Enterprises in respect of 2010 and 2011.
GVC explained the subsidiary was at the time owned by Sportingbet PLC. Sportingbet was acquired by GVC in March 2013.
The total amount of the assessment was set at EUR186.7 million. This, GVC said, was "substantially higher by multiples of the total Greek revenues generated by the subsidiary during the period."
In 2016, GVC generated a pretax loss of EUR138.6 million on revenue of EUR823.3 million.
"Legal and tax advice has been received from the group's Greek professional advisers and this sets out that the group's subsidiary has strong grounds to appeal the assessment and it will, therefore, file an appeal," GVC said in a statement. "As currently there is no formal settlement mechanism, the appeal process is expected to be conducted through the Greek courts."
In the meantime, GVC said the subsidiary continues to trade normally and intends to enter into a payment scheme with the authority. Under this scheme, approximately EUR7.8 million per month over the next 24 months will be paid to the authority and held on account.
"Entering into such an arrangement is not an admission that the assessment is correct and the group will seek to recover such payments," GVC emphasised.
GVC said, in order to be "prudent", it has made a provision of EUR200 million in its 2017 financial accounts. This will cover the 2010 and 2011 period as well as up to the end of 2017.
"The board strongly disputes the basis of the assessment calculation, believing the assessed quantum to be widely exaggerated and is confident in the grounds of appeal," GVC concluded.
Currently £100, this could come down to £2. Clearly this has been built into variable offer from GVC. Also probably GVC have plans to gradually increase online betting at the expense of in store. The $64,000 question is how the change in regulations will affect total betting. It mat not change it very much at all. If betters want to gamble £100 then they will probably do it in £2 lots as well as £100 lots?
In the meantime, there is probably nervousness in the market and as a result some sell down either by investors and /or repricing by brokers.
Currently 2% today. Not massive.
Strong hold or even buy on weakness.
As you say trust Kenny - both to make us richer and also especially to make himself considerably richer. Havent seen so many complaints on the bb recently about the board rewarding themselves excessively. I presume that is because their actions are also rewarding their shareholders well. OK by me.
Very strong & our profits will have increased accordingly.I am still not sure about the rationale of acquiring 3500+ retail units which is clearly a declining market,particular when the gaming machine cash cow is substantially curtailed-but I will trust in Kenny.Perhaps he is planning to hive off retail into some sort of MBO in which we will retain a stake.
Ladbrokes Coral is not just betting shops. They already have an online business and are also into Casinos, Bingo and Backgammon. Is this where GVC are going or are we going to see a number of sell offs of those bit of Ladbrokes that don't fit the GVC profile? I suspect the latter. In any case thinning out the Betting Shop empire need not cost a fortune. Natural wastage of employees in the industry is high and delipidations need not cost a fortune. Landlords always ask way over the costs as they see it as a way to maximise their profits. There are many good contractors who are capable of doing the work at a reasonable cost. Having worked in that trade I know we could often half the landlords asking price and still make a profit!
Broker Forecast - Peel Hunt issues a broker note on GVC Holdings Plc
Peel Hunt today reaffirms its buy investment rating on GVC Holdings Plc (LON:GVC) and raised its price target to 1200p (from 1000p). Story provided by StockMarketWire.com
I've held GVC since 2006 and always been bullish on the company (despite the occasional rants by Eagle 51). I've always thought Kenny Alexander and the Board are very shrewd and they've achieved tremendous growth and shareholder value. Back in 2014 and 2015 when dividends were paid quarterly the yields were sensational. However, in order to effect the acquisition of Sportingbet in 2016, dividends were suspended for a year and when they were reinstated it was on a twice yearly basis so shareholder income has all but halved (still very good though if you bought ten years ago) Two things concern me:
1) High Street bookies are yesterday's model with high running-costs and, on the occasions when I've gone in for a look, virtually empty of customers. (So I really don't see the logic in the deal but what do I know!!!)
2) I have concerns that the dividend will be suspended again in order to fund the deal and that shareholder value will be hit both in terms of no dividend income and also reduced share price.
Nevertheless, the market seemed to like it today and I still don't quite understand it but I took the opportunity to sell 21% of my holding at £9.83. May well be wrong again (as I was when I sold out of Persimmon at £19.24 - now £26.06!!)
Think I'll just wait and watch (and I mean to watch it like a hawk!!).
The old saying "buy the rumour, sell the news" seems appropriate until we see which way the wind blows.
Good point Pad but disposing of over 3500 retail shops as & when leases come up for renewal would be a lengthy & costly process involving dilapidations clauses & redundancies.Wonder whether a SPV could be set up to acquire them all & take them off the Balance Sheet.It will be interesting to see how the press respond tomorrow & over the weekend as this is big news & some would say,positively, that senior management at Ladbroke Coral have dealt brilliantly with extracting merger synergies & GVC will benefit most.Hopefully the IIs in LC will support the merger as Kenny is the main man in this industry .
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