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* GVC has grown rapidly through acquisitions
* Sector outlook clouded by government review
* GVC would favour deals for online operations -CEO
By Rahul B
Sept 14 (Reuters) - GVC, which has grown rapidly into one of Britain’s biggest online gambling companies, is still hungry for deals but will keep its powder dry until there is greater clarity on the UK regulatory environment, its CEO said on Thursday.
The outlook for gambling companies has become blurred by the ongoing government review of the sector and a potential clampdown on fixed-odds betting terminals (FOBTs). These machines have been big moneyspinners in betting shops but have come under fire for how they can leave gamblers with very heavy losses in a matter of minutes.
“Definitely, we will not be doing anything before the outcome of the review. We are not going to take any risk whatsoever on the triennial review or the (UK) Budget,” GVC Chief Executive Kenny Alexander told Reuters.
One possible outcome of the review, which is not expected to conclude until late October at the earliest, would be a reduction in FOBT maximum stakes, currently 100 pounds ($134) every 20 seconds.
Such an outcome could trigger another round of sector consolidation as companies look to bolster earning potential.
GVC, which has a strong online portfolio, would prefer a deal to boost its online offering over a deal involving extensive retail operations, Alexander said.
“You get much greater multiples in online earnings so there is greater opportunity for shareholder value creation,” he added.
The Isle of Man-based company had held talks on a potential takeover of bookmaker Ladbrokes Coral, Alexander said, though a deal with Ladbrokes would involve its 3,600-strong network of high street betting shops.
GVC, which operates websites such as Foxy Bingo and Sportingbet, said it expects core earnings for the current year to be “comfortably ahead” of an analysts’ consensus of 255.5 million euros ($303.6 million).
Revenue from sports brands, comprising websites such as bwin and Sportingbet, rose 9 percent to 194.2 million euros.
Strong revenue for the first half and the company’s indication that the trend has continued into the third quarter lifted its shares to a record high of 850 pence.
GVC, now valued at about 2.3 billion pounds ($3 billion), has grown quickly under Alexander, who took helm in March 2007 and has helped to lift its share price by 700 percent. (bit.ly/2wY2BD6)
The company’s acquisition-led growth set off a round of dealmaking among London-listed gambling businesses and helped GVC to gain elevation from an AIM listing to a place in the FTSE 250 index in September last year. ($1 = 0.8415 euros)
Reporting by Rahul B in Bengaluru; Editing by David Goodman