Woops, I had meant to update at the end of April following the finals released by GVC on 25th April. Anyway, better late than never I suppose and a few brief notes for completeness are included here.
I originally purchased GVC in mid-January this year as the company having many of the attributes that I see in a prospective purchase:
The shares had already risen 25% in December following a good trading update together with more news of the acquisition of bwin.party. The company also announced it’s intention to move from AIM to the main market. Although it’s nice to be backing winners there is always the tendency to think “have I missed the boat”, am I now overpaying, simply it’s just the way we are wired that makes us think in that way.
Anyway, the purchase went ahead at 472p and as we ploughed through the horrible January market decline, they fell to 420p before recovering along with the general market.
GVC release their year-end results on 25th April 2016 and the figures were both pleasing and accepted well by the market.
Kenneth Alexander, Chief Executive of GVC, comments in most recent RNS 24/04/2016:
"GVC has had a momentous year. Not only has the Company seen a fifth consecutive year of revenue and clean EBITDA growth but the completion of the bwin.party acquisition in early 2016 affords us an opportunity to take the Group to the next level".
"GVC has never been in a stronger position going forward. The enlarged Group is already enjoying encouraging trading, resulting from our unique mix of diversified products and strong brands. There is much work to be done, nevertheless, with GVC brands and bwin.party brands (including PartyPoker), growing, together with synergy benefits, we look forward with confidence to another successful year."
My Other Thoughts:
It’s an average sized holding in my folio, rather than a large position as I am always concerned about regulatory risk within this sector. Since my purchase, GVC has moved to the main market and has a fairly substantial market cap of £1.62 billion. The company is taking a dividend holiday for 2016 as part of the conditions of its financing of the bwin.party acquisition and this seems sensible to me.
As I have said in other company notes, I don’t live or die by stock ranks but it’s nevertheless reassuring to see that Stockopedia give a stock rank of 91, however, Sharelockholmes are way less confident giving a market rank of 39 roughly equivalent to 61 in Stockopedia terms.
The shares currently trade at 558p, up 18% on my initial purchase price: happy holder.
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