Ladbrokes owner GVC has taken a major hit to its profits after betting shops across the world were closed and sporting events cancelled during the depths of the pandemic.
The company revealed that underlying pre-tax profit was down by 74% to £55.4 million in a first half that was overshadowed by the Covid-19 crisis.
Chief executive Shay Segev said that, in the face of all the problems, the business could take heart from the results.
“Given the unprecedented trading environment, GVC has delivered an encouraging performance in the first half, underlining the strength of our diversified business model and the expertise, adaptability and dedication of our people,” he said.
The diverse business model includes GVC’s online betting, which saw a strong six months as many people were stuck at home.
Online net gaming revenue was up 19%, with online sports revenue up by 5%.
This came despite an overall 11% drop in net gaming revenue to £1.6 billion.
Beyond Covid-19, GVC has gone through a turbulent few months.
In July, chief executive Kenny Alexander stepped down abruptly and with immediate effect, 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.
And, at the end of the month, GVC denied parts of press reports which speculated that the investigation might be linked to the potential fraud at German payments giant Wirecard.
The company did not provide any new information about Her Majesty’s Revenue and Customs’ investigation on Thursday.
“HMRC has not yet provided details of the nature of the historic conduct it is investigating, with the exception of a reference to Section 7 Bribery Act 2010, nor has it clarified which part of the GVC Group is under investigation. In the meantime, the group continues to co-operate fully with HMRC regarding the provision of information,” it said.
Mr Segev, who was thrown into the deep end when Mr Alexander left, said: “As a technologist, I have huge admiration for what Kenny and the rest of my colleagues have achieved but I am also determined to pursue a programme of continuous improvement as we focus on our four technology-enabled priorities.
“These are leading the US market, organic growth, expanding into new markets, and being the most responsible operator in our industry.
“Our industry-leading technology will enable us to grow responsibly and sustainably, using our data-driven customer insights to ensure all of our customers have an enjoyable and safe experience while gaming with us. That is how we will deliver greater and more sustainable value for all our stakeholders.”
Richard Hunter, head of markets at Interactive Investor, said: “Despite a torrid first half of the year, GVC has dug deep and so far emerged relatively unscathed.
“Quite apart from the inevitable impacts of the pandemic, as sporting events all but ceased and the Ladbrokes and Coral estate was shuttered, other developments have taken some of the shine away from what had been a stellar share price performance.
“In particular, the retirement of the chief executive was immediate and unexpected, with his replacement immediately thrown in at the deep end.
“At the same time, the announcement of an investigation by HMRC surrounding the group’s former Turkish online business sent some shivers through investors, although to date the company has maintained that it is unlikely to be affected.”