Kenny Alexander: “Without M&A we’d still double our profits in the next four years”

GVC CEO and noted dealmaker Kenny Alexander has warned rivals his firm is on track to double its profits in the next four years, with or without M&A.

Speaking after Thursday’s H1 results, Alexander said deposits from first time players had doubled year on year, while margins were benefiting from a “scalable cost base”.

And when asked about GVC’s future M&A push, Alexander said: “Firstly, we don’t really need to do any M&A quite frankly.

Kenny Alexander, CEO of GVC Holdings

“The rate at which we are growing with our scalable cost base, I think we will double our EBITDA in four years, there is no doubt about that in my mind.”

GVC made headlines in August this year after the Financial Times revealed the firm had targeted a merger with Ladbrokes Coral.

But the mega-acquisition failed due to poor timing and disagreements about the valuation of risk, and Alexander ruled out another bid until the regulatory landscape in the UK becomes clear.

“I am not saying anything about Ladbrokes but we won’t be trying anything in the UK until the triennial review and the budget happens so that there is complete clarity,” he said.

“We are interested in other markets but the regulated ones are where we’d look to do M&A- we have an open mind and when the opportunity does come along, we will look to explore it.

“We’ve got the track record, the balance sheet, the technology and the people to do it, so why not?

“But even if we didn’t do any M&A we’d probably still double our profits in the next four years.”

In line with the focus on regulated markets, Alexander played down the importance of GVC’s Turkish revenues, which have come under increased scrutiny in recent months thanks to IP blocking efforts in the country.

The Turkey revenues were thought to have been a major stumbling block in the Ladbrokes Coral deal.

Alexander said: “The Turkish market is quite a small part of the group now and it’s getting smaller all the time because other markets are growing much faster.

“Turkey will probably never regulate, and while it’s cash generative for us, there are many more markets in the GVC Group that are of far more strategic importance and far more profitable.

“It is of far less relevance to us now than it was say five years ago.”