Gala Coral Group first half results to April 11, 2015

Tuesday May 19,2015 : GALA CORAL DELIVERS ROBUST HY1 RESULTS

Momentum continues in trading update

Gala Coral Group has reported on its first half results to April 11, 2015, delivering robust growth across most internet and retail business sectors with the exception of Eurobet Retail.

Key performance highlights include:

• Total Group net revenue of GBP 684.8 million was GBP 34.7 million or 5 percent ahead of last year
• Total Group EBITDA of GBP 135.4 million, GBP 12.2 million or 10 percent ahead of last year.
• After adjusting for regulatory impacts and exceptionally poor football margins in Italy, EBITDA was GBP 22.8 million or 19 percent ahead.
• Coral Retail EBITDA is 1 percent ahead of last year.
• 567,000 first time depositors, up 28 percent on last year, with Coral Connect sign-ups now over 210,000
• Eurobet Retail sports stakes 21 percent ahead, offset by extremely weak sports margins.
• Gala Retail EBITDA 64 percent ahead, driven by a 3 percent increase in spend-per-head, lower bingo duty and rent reductions on the properties previously owned by PropCo.

Online performance highlights comprise:

• Online net revenue amounted to GBP 33.8 million, 38 percent ahead of last year.
• Growth in Coral.co.uk driven by a combination of new multichannel actives and an improved and extended product offering.
• Galabingo.com delivered net revenue 30 percent ahead of last year, helped by increased mobile play and improved CRM reducing churn rates.
• In Italy, Gala Coral’s multichannel offering has been critical in helping grow Eurobet.it to the number 2 position in the online market.
• Online EBITDA of GBP 23.9 million was GBP 2.5 million or 12 percent ahead of last year but 94 percent ahead after adjusting FY14 for the impact of Point of Consumption tax (GBP 7.5 million) and FY15 for the impact of poor Italian football margins (GBP 3.1 million).

  Coral.co.uk:

  Net revenue increased by 66 percent and actives by 44 percent with high levels of acquisition across all channels.
  At the end of HY1 mobile stakes represented 71 percent of Coral.co.uk sports stakes (growing 141 percent) and 63 percent of gaming stakes (growing 107 percent).
  Sport actives were 48 percent ahead of last year and sports stakes were 91 percent ahead.
  Sport gross win margin was 1.3pp behind last year at 5.4 percent primarily due to weaker football margins and the impact of enhanced pricing offers, resulting in sports net revenue GBP 5.7 million or 55 percent ahead at GBP 16.1 million
  Gaming actives were 42 percent ahead and gaming stakes were 68 percent ahead.
  During the period 106 new games were launched, of which 8 were exclusive, helping drive an increase in gaming net revenue of GBP 16.3 million or 72 percent to GBP 38.9 million.

  Gala Bingo.com:

  Net revenue of GBP 40.9 million was GBP 9.4 million or 30 percent ahead of last year .
  Increase in mobile stakes of 114 percent, with mobile now accounting for 49 percent of Galabingo.com stakes

  Gala casino.com:

  Galacasino.com actives were marginally ahead of last year; however stakes were 14 percent behind due to a reduced level of VIP activity.
  Gross win margin was 0.3pp ahead of last year leaving net revenue GBP 0.6 million or 9 percent ahead at GBP 7.2 million.

  eurobet.it

  Eurobet.it’s current market share of 10 percent equates to approximately 14 percent of the market ex-Bet365, representing growth of 4pp since the start of the financial year.
  Sports stakes were 59 percent ahead of last year. However adverse football results helped drive gross win margin 4.1pp behind last year at 10.1 percent, and net revenue of only GBP 0.1 million or 1 percent ahead at GBP 8.4 million.
  After adjusting for the poor football margins, sports net revenue was GBP 4.7 million or 58 percent ahead.
  Gaming stakes were 5 percent behind due to a continuing decline in poker stakes. 
  Gaming net revenues of GBP 11.3 million, GBP 1.3 million or 13 percent ahead.

  Carl Leaver, Group chief executive officer, commenting on the Group’s online results said:

  “These are pleasing metrics, and we are confident that we can maintain this momentum as we continue to drive operational excellence.”

  “We believe that the combined Coral and Gala websites are the fastest growing in the UK online gambling market, adding more net revenue than any of our listed peers.”

  In a simultaneous trading update to May 17, 2015, Gala Coral was upbeat saying the positive momentum continues.