LSE:GVC

Stock Analysis Report

Executive Summary

GVC Holdings PLC, together with its subsidiaries, operates as an online gaming company in Germany, the United Kingdom, rest of Europe, and internationally.

Rewards

Trading at 59.3% below its fair value

Earnings are forecast to grow 48.78% per year

Risk Analysis

Shareholders have been substantially diluted in the past year

Dividend of 4.25% is not well covered by earnings



Snowflake Analysis

Reasonable growth potential and fair value.


Similar Companies

Share Price & News

How has GVC Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GVC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.1%

GVC

-1.6%

GB Hospitality

0.1%

GB Market


1 Year Return

29.0%

GVC

18.0%

GB Hospitality

9.8%

GB Market

Return vs Industry: GVC exceeded the UK Hospitality industry which returned 18% over the past year.

Return vs Market: GVC exceeded the UK Market which returned 9.8% over the past year.


Shareholder returns

GVCIndustryMarket
7 Day-2.1%-1.6%0.1%
30 Day3.2%-2.3%-0.2%
90 Day16.5%-0.3%2.0%
1 Year37.0%29.0%21.4%18.0%15.5%9.8%
3 Year55.6%34.4%36.3%22.1%20.1%4.8%
5 Year116.7%70.6%58.9%33.9%44.5%11.5%

Price Volatility Vs. Market

How volatile is GVC Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is GVC Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GVC (£8.29) is trading below our estimate of fair value (£20.38)

Significantly Below Fair Value: GVC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: GVC is unprofitable, so we can't compare its PE Ratio to the Hospitality industry average.

PE vs Market: GVC is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate GVC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: GVC is good value based on its PB Ratio (1.5x) compared to the GB Hospitality industry average (1.6x).


Next Steps

Future Growth

How is GVC Holdings forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

48.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GVC is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.5%).

Earnings vs Market: GVC is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: GVC's is expected to become profitable in the next 3 years.

Revenue vs Market: GVC's revenue (4.5% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: GVC's revenue (4.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GVC's Return on Equity is forecast to be low in 3 years time (13.4%).


Next Steps

Past Performance

How has GVC Holdings performed over the past 5 years?

-30.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GVC is currently unprofitable.

Growing Profit Margin: GVC is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: GVC is unprofitable, and losses have increased over the past 5 years at a rate of -30.4% per year.

Accelerating Growth: Unable to compare GVC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: GVC is unprofitable, making it difficult to compare its past year earnings growth to the Hospitality industry (1.6%).


Return on Equity

High ROE: GVC has a negative Return on Equity (-5.18%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is GVC Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: GVC's short term assets (£924.6M) do not cover its short term liabilities (£1.3B).

Long Term Liabilities: GVC's short term assets (£924.6M) do not cover its long term liabilities (£3.0B).


Debt to Equity History and Analysis

Debt Level: GVC's debt to equity ratio (68.8%) is considered high.

Reducing Debt: GVC's debt to equity ratio has increased from 5.6% to 68.8% over the past 5 years.


Balance Sheet

Inventory Level: GVC has a low level of unsold assets or inventory.

Debt Coverage by Assets: GVC's debt is not covered by short term assets (assets are 0.4x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable GVC has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: GVC is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 88.8% per year.


Next Steps

Dividend

What is GVC Holdings's current dividend yield, its reliability and sustainability?

4.25%

Current Dividend Yield


Dividend Yield vs Market

company4.2%marketbottom25%2.0%markettop25%5.2%industryaverage2.6%forecastin3Years4.8%

Current dividend yield vs market & industry

Notable Dividend: GVC's dividend (4.25%) is higher than the bottom 25% of dividend payers in the UK market (1.95%).

High Dividend: GVC's dividend (4.25%) is low compared to the top 25% of dividend payers in the UK market (5.19%).


Stability and Growth of Payments

Stable Dividend: GVC's dividend payments have been volatile in the past 10 years.

Growing Dividend: GVC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: GVC is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: GVC's dividends in 3 years are forecast to be well covered by earnings (42.3% payout ratio).


Next Steps

Management

What is the CEO of GVC Holdings's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average management tenure


CEO

Kenny Alexander (50yo)

12.8yrs

Tenure

UK£19,099,000

Compensation

Mr. Kenneth Jack Alexander, also known as Kenny, has been the Chief Executive Officer of GVC Holdings PLC since joined in March 01, 2007 and its Director since February 2007. Mr. Alexander served as the Ma ...


CEO Compensation Analysis

Compensation vs Market: Kenny's total compensation ($USD21.19M) is above average for companies of similar size in the UK market ($USD3.43M).

Compensation vs Earnings: Kenny's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

3.8yrs

Average Tenure

Experienced Management: GVC's management team is considered experienced (3.8 years average tenure).


Board Age and Tenure

1.5yrs

Average Tenure

60yo

Average Age

Experienced Board: GVC's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: GVC insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£198,85707 Nov 19
Barry Gibson
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares25,000
Max PriceUK£7.96
BuyUK£98,73601 Apr 19
Pierre Bruno Bouchut
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares18,000
Max PriceUK£5.49
BuyUK£99,99029 Mar 19
Stephen Morana
EntityIndividual
Role
Lead Director
Senior Independent Non-Executive Director
Shares19,425
Max PriceUK£5.15
BuyUK£38,04529 Mar 19
Virginia McDowell
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares7,000
Max PriceUK£5.44
BuyUK£99,47929 Mar 19
Peter Isola
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares19,335
Max PriceUK£5.15
BuyUK£732,71017 Dec 18
J. Paul Bowtell
EntityIndividual
Shares100,000
Max PriceUK£7.33

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 55.4%.


Management Team

  • Per Gustafsson

    Vice President of Business Development

    • Tenure: 0yrs
  • Robert Willis (49yo)

    Co-Founder

    • Tenure: 0yrs
  • Kenny Alexander (50yo)

    CEO & Executive Director

    • Tenure: 12.8yrs
    • Compensation: UK£19.10m
  • Jon Salmon

    Head of CasinoClub

    • Tenure: 9.8yrs
  • Shay Segev

    Chief Operating Officer

    • Tenure: 3.8yrs
  • Liron Snir

    Chief Product Officer

    • Tenure: 3.8yrs
  • Adam Lewis

    Chief Marketing Officer

    • Tenure: 6.8yrs
  • Adele Lawton

    Head of Bingo

    • Tenure: 3.3yrs
  • Paul Tymms

    Director of Investor Relations & Corporate Communications

    • Tenure: 0yrs
  • Rob Wood

    CFO & Director

    • Tenure: 0.8yrs

Board Members

  • Lee Feldman (51yo)

    Non Executive Chairman

    • Tenure: 11.3yrs
    • Compensation: UK£8.53m
  • Virginia McDowell (61yo)

    Independent Non-Executive Director

    • Tenure: 1.5yrs
    • Compensation: UK£63.00k
  • Pierre Bruno Bouchut (64yo)

    Independent Non-Executive Director

    • Tenure: 1.3yrs
    • Compensation: UK£33.00k
  • Kenny Alexander (50yo)

    CEO & Executive Director

    • Tenure: 12.8yrs
    • Compensation: UK£19.10m
  • Jane Anscombe

    Independent Non-Executive Director

    • Tenure: 2.5yrs
    • Compensation: UK£111.00k
  • Barry Gibson (67yo)

    Independent Non-Executive Director

    • Tenure: 0.08yrs
  • Stephen Morana (48yo)

    Senior Independent Non-Executive Director

    • Tenure: 1.5yrs
    • Compensation: UK£142.00k
  • Peter Isola (60yo)

    Independent Non-Executive Director

    • Tenure: 3.8yrs
    • Compensation: UK£88.00k
  • Rob Wood

    CFO & Director

    • Tenure: 0.8yrs

Company Information

GVC Holdings PLC's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: GVC Holdings PLC
  • Ticker: GVC
  • Exchange: LSE
  • Founded: 2004
  • Industry: Casinos and Gaming
  • Sector: Consumer Services
  • Market Cap: UK£4.826b
  • Shares outstanding: 582.13m
  • Website: https://www.gvc-plc.com

Number of Employees


Location

  • GVC Holdings PLC
  • 32 Athol Street
  • Douglas
  • Isle of Man
  • IM1 1JB
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
6GIDB (Deutsche Boerse AG)YesOrdinary SharesDEEURDec 2004
GMVH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDDec 2004
GVCLSE (London Stock Exchange)YesOrdinary SharesGBGBPDec 2004
GVCLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPDec 2004
GVCWBAG (Wiener Boerse AG)YesOrdinary SharesATEURDec 2004

Biography

GVC Holdings PLC, together with its subsidiaries, operates as an online gaming company in Germany, the United Kingdom, rest of Europe, and internationally. It operates through Sports Labels, Games Labels,  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/10 21:54
End of Day Share Price2019/12/10 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.