The week that was in the betting world

Shares in GVC Holdings, the parent company of Ladbrokes and Coral, surged on Monday despite it revealing it expects to lose £50 million in earnings per month due to the coronavirus outbreak.

The company had previously said that the loss of international sport and retail closures would reduce its monthly ebitda (earnings before interest, taxation, depreciation and amortisation) by £100m a month before mitigation.

However, GVC said mitigation opportunities had been identified, which had reduced costs by approximately £50m per month.

They included the UK government grant towards employment costs which, along with business rates relief, had reduced costs by nearly £20m per month according to GVC’s estimates.

GVC, whose share price closed at 573.2p – up 18.5 per cent – on Monday afternoon, said average monthly cash outflow would still be approximately £15m per month and that the group was working through further mitigation with the target of achieving a break-even monthly cashflow.

The company said it had taken the “prudent decision” to withdraw its second interim dividend that was due for payment on April 23.

It has also been reported that GVC has told landlords that it will withhold rental payments for their UK betting shops until normal trading conditions resume.

Chief executive Kenny Alexander said: “As our first-quarter trading numbers once again demonstrate, GVC is a business that, in normal times, delivers an outstanding performance.

“However, while our global and product diversification is standing us in good stead during the current uncertainty, the Covid-19 pandemic is posing an unprecedented challenge to our business and our industry.  

“We are responding decisively, and have put in place a range of measures to keep our people safe, strengthen our financial position, limit cash outflow, preserve jobs and maintain a compelling customer offer. 

“I am confident that we will emerge from this period in a position of strength, and we will be well placed to take advantage of a range of attractive growth opportunities which we believe will be available to us.”

GVC said it had started the year well before the impact of the coronavirus outbreak, with group net gaming revenue (NGR) up one per cent and online NGR up 19 per cent in the first quarter.

Since March 15 the company said there had been an “encouraging performance in gaming in the absence of sporting events, in line with the group’s expectations”.

Alexander thanked staff “for their continuing hard work and commitment to ensuring GVC’s long-term success” and emphasised the company’s commitment to minimising the potential for customers suffering harm. 

He added: “Accordingly, not only have we supported the Betting and Gaming Council’s 10 pledge action plan on safer gambling, but we have gone further and introduced a range of additional safeguarding measures to ensure that we are able to rigorously monitor and protect anyone who may be vulnerable at this time.”

Analyst Gavin Kelleher at Goodbody described the update from GVC as “reassuring”.

He added: “The performance of online appears to be more resilient than some people would have expected in the two weeks post Covid restrictions.”

William Hill freeze executive pay and scrap bonuses due to coronavirus outbreak

William Hill’s executive team led by Ulrik Bengtsson will not receive salary increases or bonuses as a result of the Covid-19 outbreak.

Bengtsson, the bookmaker’s chief executive, has also decided he will not accept the performance share plan award made to him in March.

While employees across the group will not receive salary increases, those entitled to under National Minimum Wage requirements will receive those rises, while the company will also top up the wages of furloughed staff to 100 per cent of normal salary levels.

Lynne Weedall, chair of William Hill’s remuneration committee, said: “As a board, we are focused on taking appropriate steps during the current emergency that will look to protect the interests of all of our key stakeholders [employees, customers, suppliers and shareholders] to best ensure the strength of our business in the long-term.”

She added: “From an employee perspective the most marked impact has perhaps been on those employees working in our retail business where we have had to close our stores.  

“We understand that the income that these roles provide to many employees and their families is important and so we have decided to top-up the wages of furloughed colleagues to 100 per cent of normal salary levels for the time being.”

The news means that Bengtsson’s annual salary will remain at £600,000 for 2020.

Shareholders will be asked to approve the directors remuneration report for 2019 at the company’s annual general meeting on May 15.

Focus shifts to international racing during shutdown

The global shutdown of most sporting events due to the COVID-19 outbreak has seen bookmakers turn to unfamiliar territories to find some live sport. Luckily Horseracing has become a beacon of hope, with racing continuing in Hong Kong, the US and until recently in Ireland and South Africa.

With punters focus now moved internationally a major concern for bookmakers is the dearth of trading expertise in unknown territories. This increased audience comes with a risk of exposure due to mispricing. 

Racing Posts, trading solution, AllSported can now help customers with a best-in-class trading risk-managed trading service for international racing. Providing automated price formation, the solution adjusts to market movers and manages the risk of these lesser know territories. 

With racing behind closed doors the last sport to be shutdown in Ireland, racing has shown the ability to operate whilst adhering to strict social distancing and government requirements now is the time bookmakers should be looking to improve their racing products. AllSported offers a made-to-measure horseracing product, with low upfront costs and no overheads, providing bookmakers with a platform to engage and retain customers when UK and Ireland racing resumes. 

AllSported head of trading, Alan Casey discussed the opportunity for bookmakers during the global shutdown of live sport: “These are truly unprecedented times and the lack of sport across the world has left us all scrambling for any shred of live-action throughout isolation and lockdown. However, it does offer businesses the opportunity to invest in tech and development work they wouldn’t have had the chance to during the busy sporting period.

“The chance to improve your product during this downtime shouldn’t be overlooked as the battle for customers will be higher than normal once sport resumes. Our product, with a small piece of development work, means sportsbooks can add a best in class and fully risk-managed horseracing solution that requires little overhead costs. AllSported sets businesses up for the resumption of racing, hopefully, sooner rather than later.”