Online gaming company GVC has raised its dividend for shareholders saying it is reaping the benefits of its £1.1bn acquisition of rival Bwin, even as the group incurs major costs from the transaction.
The Isle of Man-based group, which also operates sites such as Sportingbet and Foxy Bingo, reported a pre-tax loss of €138.6m in 2016. This was mainly due to costs related to its purchase of Bwin which was completed last year.
But the FTSE 250 company also said overall trading had been boosted by gains in sports betting, which more than made up for declines among its online casino games brands.
“The acquisition of bwin.party in February 2016 was our most ambitious transaction to date and through the hard work of our people we have once again demonstrated our ability to create significant shareholder value through selected acquisitions,” said chief executive Kenneth Alexander. “The organic growth opportunity is equally exciting and we are confident of delivering further growth in 2017.”
In an upbeat assessment, the company said ts financial performance had bested its own forecasts. For the 12 months ended 31 December, GVC said that net gaming revenue – the amount gained in stakes minus payouts to punters – rose 12 per cent on a constant current basis to €894.6m. Earnings before interest, tax, depreciation and amortisation – which the company says is the best way to judge its underlying performance – rose 26 per cent to €205.7m.
In December, the group had issued a special dividend following a trading statement in which it said full year results were likely to be at the “upper end of market expectations,” predicting net gaming revenues of between €852-885m and ebitda of €202-205.5m
After beating those estimates, it announced a second special dividend of 15.1 cents per share on Thursday, giving a total 2016 payout of 30 cent per share.