Proposed disposal of Betaland

RNS Number : 9671A

GVC Holdings PLC

10 April 2012

 



Press Release

10 April 2012

GVC Holdings PLC

("GVC", the "Group" or the "Company")

Proposed disposal of Betaland

GVC Holdings PLC (AIM:GVC), a leading online gaming company, today announces that through its wholly owned Maltese subsidiary, GVC Corporation Limited, the Company has entered into an agreement with an independent  third party company, GVC New Limited ("New"), to dispose of its Betaland sports book and gaming business (the "Business") for a nominal sum ("Proposed Disposal").  GVC has been evaluating the future of its Betaland brand and has concluded that the returns on the Business no longer justify the risks involved with this operation. Betaland was historically the lowest margin business of the Group and heavily dependent on agency relationships.

GVC commenced its Betaland operation in Q3-2007.

GVC New Limited is not owned by GVC, nor any of its officers, shareholders or directors, but an entirely independent company incorporated in Malta. Within 24 months of completion the transferee has agreed to change its name to a name which cannot be reasonably interpreted as being associated with the GVC Group.

The Proposed Disposal is conditional upon the Lotteries and Gaming Authority (of Malta) providing consent to the business transfer.  The disposal is expected to complete within the next month.

The Proposed Disposal is on a debt and cash free basis and for nil consideration. The transferee has agreed to take-on the majority of the staff of the business thus saving GVC significant redundancy costs. Notice to terminate the lease housing these Maltese based staff has been terminated effective 30 June 2012 at minimal cost.

The principal liabilities of the Business are customer liabilities.  The principal assets of the Business are debtor balances along with the brand name and the URLs.

Historical financial information

In the year ended 31 December 2010, the date of the last audited accounts, the results and net assets of Betaland and the Group were:

	Betaland	Group
Net Gaming Revenue	€22.2 million	€54.9 million
Clean Ebitda	€1.9 million	€12.2 million
Profit before taxation	€1.6 million	€4.1 million
Gross assets	€4.4 million	€76.1 million
Net assets	€6k	€62.7 million

In the six month period to 30 June 2011, the unaudited results were:

	Betaland	Group
Net Gaming Revenue	€10.5 million	€30.3 million
Clean Ebitda	€1.0 million	€5.2 million
Profit before taxation	€0.9 million	€2.5 million
Gross assets	€5.0 million	€83.4 million

The disposal is not expected to change the historical pattern for paying dividends to shareholders.

Kenneth Alexander, Chief Executive Officer of GVC Holdings, said: "The declining profitability of Betaland led the Board of GVC to conclude it should exit this market.  By transferring Betaland to an independent third party, GVC will have sheltered itself and its shareholders from the costs associated with the closure of this business as well as the potential to settle liabilities to customers directly.

"GVC's remaining B2C brands CasinoClub and Betboo, along with its B2B activities, remain robust"

More information on the proposed disposal, along with a trading update, will be provided when the Group publishes its preliminary results for the year ended 31 December 2011 on Wednesday 25 April 2012.

- Ends -

For further information:

GVC Holdings PLC
Kenneth Alexander, Chief Executive Officer	Tel: [phone]
Richard Cooper, Group Finance Director	www.gamingvc.com

Daniel Stewart & Company Plc	Tel: [phone]
David Hart / Paul Shackleton / Jamie Barklem	www.danielstewart.co.uk

Media enquiries:

Abchurch
Henry Harrison-Topham / Oliver Hibberd	Tel: [phone]
[e-mail]	www.abchurch-group.com

About GVC Holdings PLC

GVC Holdings PLC is a leading online gaming company.  The Group is headquartered in the Isle of Man and is licensed in Malta, and the Netherlands Antilles.

Further information on the Group is available at www.gamingvc.com.

 

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