GVC announces new CEO and H1 results

GVC Holdings has appointed Shay Segev as the company’s new CEO as it reports results for the first half of 2020.

UK.- GVC Holdings is to begin a new era as CEO Kenneth Alexander leaves the group after 13 years.

Chief Operating Officer Shay Segev will take over as CEO from next week.

Alexander leaves GVC after 13 years in which he oversaw the group’s development from a minor AIM-listed operator to a FTSE 100 international business, acquiring operators like Ladbrokes Coral, Bwin.Party and Sportingbet and entering a joint venture with MGM Resorts International.

The 51-year-old, who entered the gaming industry 10 years ago at Sportingbet, said he had decided to leave the company to spend more time with his family.

He said: “I have given 13 years to GVC and I now want to give some time to my family. I have enjoyed every minute of helping to grow GVC into the business that it is today, and am proud of all that has been achieved.

“We have the best people, brands and technology in our sector, and our joint venture in the US with MGM Resorts positions us very strongly for growth in that hugely exciting market.

“I have spent the last four months working from home and reflecting on my future plans, and this feels like the right moment.”

Segev joined GVC from Coral in 2016. Before that he spent seven years as Chief Operating Officer at Playtech.

Alexander said: “Whilst it is never easy to hand the baton on, it has been very clear for a number of years now that Shay is the right person to succeed me. He is an outstanding leader with a clear strategic vision and unrivalled technological expertise.

“As a shareholder, I know that our company will be in good hands. He is also a firm advocate for the strongest possible protection for customers, and shares my philosophy that only a responsible company can be a sustainable and successful company.”

Segev has had responsibility for several major programmes, including GVC’s proprietary tech platform, its joint venture with MGM Resorts in the US, and the group’s mergers and acquisitions.

Segev said: “Kenny has been a fantastic colleague and leader during the four years I have worked with him. Thanks to his stewardship I am succeeding him at a time when the business is in robust financial health with an exceptional team and exciting opportunities ahead of it, especially in the US.

“Our strategy will continue to be focused on our industry-leading technology, brands, products, marketing capabilities and people, as well as being absolutely committed to making gambling as safe and enjoyable as possible for our customers around the world.”

Michael Dugher, Chief Executive of the Betting and Gaming Council (BGC) commended Alexander’s record at GVC and his role in forming the trade group.

He said: “Kenny helped create the Betting and Gaming Council because I know he understood that the whole industry needed to drive changes in the future and work for ever higher standards.

“And as a great horses and football man, he understood his customers and he brought that authenticity, directness and indeed an infectious sense of humour that we will all miss at the BGC. We wish him and his family all the very best.

“In Shay Segev, GVC have a super-talented successor to lead the company. He has a proven track record of running the major parts of the GVC business – from Ladbrokes/Coral migration to trading, customer service and their US venture. We look forward to working with him closely, not least on the government’s forthcoming Review of Gambling.”

The change at the top comes as GVC reports an 11 per cent year-on-year decline in revenue for the first half of 2020, which saw retail locations closed for a long period and sports events cancelled due to the Covid-19 pandemic.

The group said strong online growth made it an encouraging six months despite the downturn.

All declines occurred due to retail shutdowns, with like-for-like UK retail revenue (removing permanently closed shops) down 50 per cent and  European retail revenue down 48 per cent.

Online revenue in H1 increased by 19 per cent year-on-year, with a 31 per cent rise in iGaming and 5 per cent in online sports betting revenue despite a 15 per cent fall in wagers. 

Outgoing CEO Kenneth Alexander said: “Given the extraordinary circumstances in which the group is currently operating, delivering double-digit online net gaming revenue growth in all of our major territories is a very strong performance.

“It is a clear testament to the strength and diversification of our business model, the quality of our technology, the enduring appeal of our brands, and the talent, commitment and professionalism of our people.”

EBITDA for the six months is expected to come in at £340million to £350million, with cost management allowing the operator to be cash neutral during lockdown. 

Alexander highlighted achievements in the first six months despite the pandemic, including GVC’s increased investment in its US joint venture with MGM Resorts, completion of the migration of Ladbrokes Coral brands, and shareholder approval of the operator’s relocation to the UK.

He noted it had also taken steps to increase social responsibility measures during the period.

Alexander said: “We continue to focus on providing our customers with the tools to empower them to manage their own play, whilst deploying our market-leading technology to monitor for potentially problematic changes in behaviour and intervene as required.

“Hopefully this has also been duly noted by those whose preference for punitive and mandatory restrictions runs the risk of driving customers into the hands of unscrupulous black-market operators as has been the case in other countries in which stringent and misguided regulation has been introduced.”

Net gaming revenue in the second quarter of 2020 declined 22 per cent year-on-year, with a 86 per cent decline in UK retail and 6 per cent decline in online sports betting partially mitigated by a 45 per cent increase in online gaming growth.

European retail revenue was down by 90 per cent in the quarter. GVC said activity had now returned close to pre-pandemic levels, with online gaming remaining above expectations.