GVC Holdings has predicted that Covid-19 could cost the global sports betting and gaming group £50 million, as opposed to the original prediction of £100 million.
The company reported this in its latest planning update, which also included its Q1 2020 financial results.
Despite the ongoing global situation, net gaming revenue (NGR) increased by 1%.
A solid start to 2020 for GVC
From the beginning of January until the end of March, GVC’s online revenue went up by 16% year-on-year. Up to 15th March, that figure had been as high as 20%.
While the impact of coronavirus has been felt since mid-March, CEO Kenneth Alexander remains optimistic moving forward.
His thoughts are as follows.
“As our Q1 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.”
Weathering the storm
According to the company’s trading update, “a number of opportunities have been identified so far which reduce costs by approximately £50m per month”.
In the UK, GVC is eligible for government support. These include grants towards employment costs, plus business rates relief. Both of these are expected to lower spending by £20 million each month.
Measures have also been taken to reduce outgoings in other areas. These include reducing online marketing spend, lowering sports content output and reducing trading costs.
Alexander continued his thoughts on Q1 2020 and current challenges with the following.
“We are also sensitive to the fact that at this time of economic stress and isolation, it is vital that we ensure a safe, responsible and enjoyable gaming environment for our customers and do everything that we can to minimise the potential for harm.
“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.”
“Finally, I would like to thank our outstanding teams around the world for the manner in which they have rapidly adapted to the challenge, and for their continuing hard work and commitment to ensuring GVC’s long-term success.”