GVC Holdings PLC Triennial Review (3893O)
May 17 2018 - 2:29AM
UK Regulatory
TIDMGVC
RNS Number : 3893O
GVC Holdings PLC
17 May 2018
17 May 2018
GVC Holdings PLC
("GVC", the "Group")
Triennial Review
GVC Holdings PLC (LSE: GVC), the multinational sports betting
and gaming group, notes the announcement made today by the UK
Government regarding the Triennial Review.
The Government has today published its final decision on the
Triennial Review, concluding that stakes on B2 content should be
cut to a maximum of GBP2 per spin. Whilst we welcome the certainty
provided by the announcement, we are disappointed with the outcome,
particularly given the previous independent evidence on stake cuts
published by both the Gambling Commission and the Responsible
Gambling Strategy Board.
It is now important that the industry is given an adequate
implementation period to help prepare and plan for the shop
closures that will arise, including attempting to mitigate the
impact of resultant job losses. Significant re-engineering of the
machines and gaming software will also be required to effect these
changes.
Today's Government announcement marks the end of uncertainty on
FOBT staking limits. As a responsible business, we re-iterate our
commitment to work closely with the Government and our regulators
to ensure that both our retail and online offerings are places
where customers can enjoy gambling in a safe and secure
environment. In order to achieve a positive and constructive
working relationship, GVC confirms that it does not intend to seek
a Judicial Review of the Triennial Review decision.
Expected financial impact
The focus in the UK Retail operation over the last two years has
been to create a business that is well placed to face these
structural and regulatory headwinds. As such we expect to be able
to reposition the business within two years following
implementation, with an anticipated fully mitigated impact of
cGBP120m on Group EBITDA secured by the end of this period. In the
first full year the impact on Group EBITDA is anticipated to be in
the region of GBP160m. Therefore, we expect to retain a profitable
and highly cash generative UK Retail estate. Furthermore, our
proven leading multi-channel expertise presents additional
opportunities to drive online growth.
The offer for Ladbrokes Coral Group ("Ladbrokes Coral")
envisaged the possibility of a GBP2 maximum stake Triennial Review
(see below) and today's announcement has no impact on the minimum
targeted synergies of at least GBP100m per annum.
Contingent Value Right
As part of the consideration paid for the acquisition of
Ladbrokes Coral, GVC issued to each Ladbrokes Coral shareholder a
Contingent Value Right ("CVR") for each Ladbrokes Coral share that
they held. The CVRs were constituted under a deed poll made by the
Company ("CVR Instrument"), a copy of which can be found at
www.gvc-plc.com.The value of each CVR, and therefore the value of
any payment ultimately due from GVC to CVR holders, is directly
linked to the outcome of the Triennial Review and certain laws
enacted pursuant to it. Whilst there is a formal process and
methodology for determining the value of the CVRs, which GVC will
adhere to, the CVR Instrument envisages that if legislation is
enacted prior to 28 March 2019 reducing maximum stakes to GBP2, as
announced by the Government today, this will result in each CVR
having zero value. In such circumstances no payment would be
required to be made by GVC to CVR holders and the CVRs would be
automatically cancelled.
Trading update and pro forma financial information
The Group intends to provide a current trading update, along
with enlarged Group pro forma financial information on 25 May 2018.
An analyst call will be held at 9.00 AM on the same day.
Participants may join the call by dialing one of the following
numbers, approximately 10 minutes before the start of the call:
UK Toll-free Dial In: 0808 237 0040
International Dial In Numbers:
http://events.arkadin.com/ev/docs/FEL_Events_International_Access_List.pdf
Participant PIN Code: 92468403#
Kenneth Alexander (CEO) said:
"Although we are ultimately disappointed with the outcome of the
Triennial Review, it is a decision we accept. The uncertainty has
weighed heavy on the industry and the many thousands of people who
work within it. Our focus now is to work with Government to build a
constructive relationship that will ensure a positive future for
the sector and the many millions of customers who enjoy our
products responsibly. The offer for Ladbrokes Coral Group was
structured to address the potential of a GBP2 max stake outcome and
as such the strategic rationale for the acquisition remains
unchanged. Through a combination of trusted brands, scale,
technology and diversification, I'm confident that GVC can continue
to deliver shareholder value."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
- ends -
LEI: 213800GNI3K45LQR8L28
For further information:
GVC Holdings PLC
Kenneth Alexander, Chief Executive
Paul Bowtell, Chief Financial Officer
Nick Batram, Director of Investor Relations & External Communications
Paul Tymms, Head of Investor Relations (investors@gvc-plc.com)
Media enquiries:
Buchanan Communications
David Rydell/Henry Harrison-Topham/Chris Lane Tel: +44 (0) 20 7466 5066
About GVC
GVC Holdings PLC is one of the world's largest sports betting
and gaming groups, operating both online and in the retail sector.
The Group owns a comprehensive portfolio of established brands;
Sports Brands include bwin, Coral, Crystalbet, Eurobet, Ladbrokes
and Sportingbet; Gaming Brands include CasinoClub, Foxy Bingo,
Gala, Gioco Digitale, partypoker and PartyCasino. The Group owns
proprietary technology across all of its core product verticals and
in addition to its B2C operations provides services to a number of
third-party customers on a B2B basis. GVC acquired Ladbrokes Coral
Group plc on 28 March 2018 and is now the UK's largest high street
bookmaker, with over 3,500 betting shops. The Group, incorporated
in the Isle of Man, is a constituent of the FTSE 250 index and has
licences in more than 20 countries, across five continents.
For more information see the Group's website:
www.gvc-plc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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