Bingo growth drives Q2 profit rise at Gala Coral
Gala Interactive profits up 25% while Coral Interactive posts small profit after 105% rise in gross win
Strong growth in bingo and sports betting revenues due to major TV advertising campaings saw Gala Coral EBITDA rise to £7.2m from its interactive divisions for the quarter ending 6 July 2013.
Gala Interactive had another positive quarter with a 28% increase in actives and a 44% increase in stakes resulting in a 25% increase in EBITDA to £6.6m.
The company said growth was driven by “continued investment in TV campaigns” with a £1.3m rise in operating costs in the period.
It also noted the launch of a new mobile app at the end of the quarter and a rise in high-staking VIP customers helped to a 50% rise in gross win during the period to £19.0m.
Coral Interactive also reported a big increase in gross win, rising 100% to £12m for the quarter, underpinned by an 89% rise in operating costs on the back of a major new TV advertising campaign.
Gross profit for the period rose 105% to £7.6m, but the £7m of operating costs meant EBITDA came in at just £0.6m for the period, a rise of 500% year-on year.
The firm said the increased level of marketing activity is expected to continue into the next financial year.
Elsewhere, the company reported a small increase in its online market share in Italy through Eurobet Italia, up to 9% from 7.2% the previous year. It is also in the early stages of opening 500 shops in the country with its first outlet having opened at the end of July.
Group turnover grew to £259.1m, up from £237.1m during the corresponding 2012 quarter, with gross profit rising to £193.9m from £187.5m although growth was hampered by a disappointing Gala Retail performance which suffered a 9% decline in profits.
Describing its performance as “resilient” Gala Coral Group chief exec Carl Leaver said both Gala and Coral Retail were operating in a challenging environment exacerbated by the weather.
Following the sale of its Rank Group casino division in May for £179m, the Group made a debt repayment of £113.1m leaving it with a covenant net debt at the end of Q3 of £1,193.2m, an improvement of £128.9m since the year end.