Blog
GVC Holdings (Lon: GVC) revises and extends Betboo earn-out, whilst reaffirming its dividend policy
Posted 23/02/11
GVC Holdings has today announced its revised and extended Betboo earn-out, whilst reaffirming its current policy of distributing at least 75% of net operating cash flow to shareholders by way of dividend
GVC Holdings PLC is the successor company to Gaming VC holdings S.A., and was incorporated in the Isle of Man on 5th January 2010. Its primary betting licence has been granted by the Lotteries and Gaming Authority of Malta. The company operates a variety of online gambling platforms including casinos, poker rooms, bingo and sports betting. It operates in three segments: CasinoClub, which is a German online casino operator, operational since 2001; Betaland, which is an Italian online sports-book and gaming operator, operational since autumn 2007; and Betboo, which is a South American Internet gaming operator, offering bingo, casino, poker and sports betting. GVC acquired betboo.com at the beginning of July 2009.
When GVC acquired Betboo back in July 2009, they paid an upfront US$4m and an earn-out based on the sum of the profits for the two years to 30th June 2012 and five times the profits for the 12 months to 30th June 2012. The total purchase price was capped at US$30m.
However, as Betboo has been doing so well, (Q1-2011 average NGR is up 97% on Q1-2010, and 30% on Q4-2010) GVC believes that continued investment is essential to take advantage of this strong growth, and to ensure the management team in South America remain focussed they have decided to revise their earn-out.
In terms of overall trading, the beginning of 2011 has been encouraging. Total NGR for the seven weeks to February 20th is 19% ahead of Q4-2010 and 10% ahead of Q1-2010. The German brand, CasinoClub, remains profitable, and moves in Europe to regulate eGaming are encouraging. In anticipation of this, the Group has announced intentions to increase investment in CasinoClub over the next year to “maximise shareholder value”.
Importantly, the changes reduce the prospect of any fall in dividend in 2012.
Forecasts will be published following announcement of full year results for 2010.
This entry was posted 1 year, 2 months ago.
