April 9, 2014 / 9:00 AM / 6 years ago

Online gambling company GVC eyes more deals after profit doubles

LONDON, April 9 (Reuters) - GVC is looking at further acquisitions after turning around the Sportingbet businesses it acquired last year, the online gambling company said on Wednesday.

GVC, one of the smaller players in the sector and listed on the AIM stock market, said operating profit more than doubled to 38.3 million euros ($52.8 million) in 2013, boosted by moving Sportingbet into the black.

“We are now ready for the next stage in our corporate development and further geographic expansion through organic growth and acquisitions,” Chief Executive Kenneth Alexander said.

However, GVC cautioned that any deal would not be at the expense of a policy of paying out around 75 percent of operating cash flow in dividends. GVC declared total dividends of 48.5 cents in 2013.

“That is our strategy. Many of our shareholders hold the stock for the income dividend stream,” Alexander told Reuters.

GVC was the junior partner to William Hill in a 485 million pounds ($805.6 million) takeover of online gambling group Sportingbet last year.

GVC acquired Sportingbet’s operations in 24 countries for around 31 million pounds. William Hill took on the businesses in the better regulated markets of Australia and Spain.

GVC shares rose more than 5 percent to 401p by 0830 GMT and have increased by more than a quarter over the past year, giving the company a market capitalisation of 230 million pounds.

“We retain our Buy recommendation with in our view GVC well placed to benefit from the World Cup as Latin America’s largest online bookmaker, whilst continuing to generate profit, dividend and cash growth,” Panmure said in a note.

Larger online gambling company Bwin.Party said on Wednesday its revenue fell 8 percent year-on-year to 165.7 million euros in the first quarter of 2014.

Bwin, which is aiming for cost savings this year of 20 million euros, said last month that it expected a return to growth in 2014 after pulling back from markets where regulations are less clear cut.

Its shares slipped 1.7 percent to 123p. (Writing by Keith Weir, editing by Kate Holton)

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