Ladbrokes owner GVC has upped its annual earnings outlook after seeing revenues jump thanks to surging demand for online gaming and as sporting events restarted.
The bookmaking giant – which also owns bwin and Coral – revealed that net gaming revenues jumped 12% in its third quarter to the end of September.
It said it is now expecting full-year underlying earnings of between £770 million and £790 million, sending shares up 7%.
GVC has this morning provided a trading update for Q3 (1 July to 30 September 2020): https://t.co/hcIq3oxhZ3
— GVC Holdings PLC (@GVCHoldings) October 8, 2020
The latest annual earnings guidance is around £50 million higher than it previously expected.
GVC has been boosted by strong demand for online gambling amid the pandemic and lockdowns, with internet games revenues soaring 26%, or 28% on a constant-currency basis, in the third quarter to September 30.
This has helped offset a 5% fall in revenues across its UK betting shops over the three months.
But GVC said all its UK and European shops are now open and sales volumes are within 10% of those seen before the crisis struck.
Chief executive Shay Segev said: “This has been another strong period for GVC.
“We have delivered our 19th consecutive quarter of double-digit online growth, along with market share gains in all our major territories.”
He added: “While the risk of further restrictions as a result of Covid-19 mean that we remain cautious on the short-term outlook, in the longer term we are confident of being able to continue delivering sustainable growth for all our stakeholders.”
The group, which has been snapping up rivals as the sector consolidates, also announced another deal, with the acquisition of Portuguese online gaming group Bet.pt.
The earnings cheer comes despite GVC taking a major hit to profits in its first half after betting shops were closed and sporting events cancelled during the depths of the pandemic.
It said in August that underlying pre-tax profit was down by 74% to £55.4 million in its first half.
It was also a rocky first half for the group after chief executive Kenny Alexander stepped down abruptly and with immediate effect in July, saying he wanted to spend more time with his family.
Just a week later, the company announced that the UK tax authority was looking into potential offences at the company’s former Turkish subsidiary, which was sold in 2017.
Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown, said GVC is “riding the digital wave”.
She said: “It seems customers that became accustomed to gaming and digital wagering during lockdown have stuck around.”