Gaming group GVC Holdings PLC (LON:GVC) said growing online sales, and the recent football World Cup had helped it deliver strong profit growth during the first half of 2018.
The UK gambling company, which owns the Ladbrokes, Coral and Sportsbet brands, on Thursday reported an 11% rise in proforma underlying earnings (EBITDA) to £349.5mln for the six months to the end of June on revenues 8% higher at £1.7bln.
READ: GVC deal with MGM Resorts looks set to be the first of many for bookmakers
The company hiked the interim dividend by 10% to 16p a share and said trading had started well in the second half.
GVC, which completed the acquisition of the Ladbrokes Coral Group in March, said it expects the deal to deliver capex synergies of at least £30mln and that the integration of the businesses was progressing well. It added that it was on track to achieve cost synergies of at least £130mln by 2021.
Earlier this year, GVC entered into a joint venture with Las Vegas casino operator MGM Resorts International (NYSE:MGM) after a US Supreme Court decision in May struck down a 1992 federal law that prohibited most states from legalising sports betting. UK gaming companies, including Paddy Power Betfair (LON:PPB), have been quick to try and capitalise on the sudden appearance of a large and lucrative market by entering into deals and JV's with US peers.
The company said that online net gaming revenue jumped 20% during the period compared to 2017, with online sports and games rising 21% and 15% respectively. Like-for-like UK retail sales dropped 3% however, due to poor weather, the group said.
"Strong momentum in Online and European Retail has continued, and a positive World Cup helped improve trends in UK Retail in the second quarter,” CEO Keith Alexander said in a statement.
"Our strategy to build scale and diversification through organic growth and acquisition is more relevant today than ever. The positive performance of the Group in the first half means that we are confident of delivering a full year result in-line with the Board's expectations."
In a note to clients, Numis analysts said that GVC's valuation was attractive "for a company with strong online momentum and which is well placed to benefit from the opportunities in the US."
Shares in GVC, which have risen 14% so far this year, were 0.4% up at 1,065p in early trade.
-- Updates with analyst comment, share price --