Ladbrokes owner GVC 'well positioned' on World Cup, analyst says
Broker Canaccord Genuity expects a "positive message" from GVC's year end update on 18 July as England's eventual exit from the World Cup saved the bookmaker from a potential £10m hit.
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The Canadian broker said the overall outcome for GVC looks set to be a positive one, despite a likely costly golden boot award for Harry Kane.
"While England were relatively unfancied at the start of the tournament, they will still have been among the best-backed teams for the UK-focused bookies, so they will have generated some solace from the semi-final exit," said Canaccord.
The effects of England's World Cup performance aside, Canaccord sees GVC, which owns the likes of Ladbrokes and btwin, as being "particularly well positioned", despite tightening regulations.
Canaccord expects a first-half EBITDA of £345.9m, up 9% year-on-year, that would drive earnings per share growth 10% to 33p, with the World Cup providing upside risk.
Ahead of GVC's trading update, the broker updated its forecasts, with full-year EBITDA nudged down from £745.3m to £740.0m, with EPS upgraded from 62.7p to 74.0p, primarily on lower interest.
"With strong momentum, upside risk on synergy targets and a strong positioning for the nascent US sports betting market, we see scope for further outperformance," said Canaccord.
Canaccord raised its target price on GVC from 1,170p to 1,250p and reiterated its 'buy' rating on the group.