Gala Coral Q1 online profits up 19%

Gala Coral’s online business this morning posted a 19% rise in Q1 FY15 profits after strong growth in sportsbook and bingo helped offset a run of adverse football results and the introduction of the Point of Consumption (PoC) tax.

EBITDA for the 16-week period ended 17 January was up £2.1m year-on-year to £12.9m, although the firm said stripping out the impact of PoC saw EBITDA growth of 53% with the levy, introduced on 1 December, setting the business back £3.8m.

Coral.co.uk gross win increased 71% to £36.6m, driven by a 49% rise in sportsbook actives to 346,400 with the mobile channel a key part of this growth with mobile stakes representing 61% of total turnover for the period.

In addition, spend per head was up 17%, an increase the firm partly attributed to its single wallet Coral Connect card as customers began “to embrace the benefits of accessing their single wallet across all channels”.

But Gala Coral said the punter-friendly football results, seen in both December and January, had cost the firm £9.1m, although it added a 74% increase in sportsbook turnover pointed to an element of cash recycling.

Profits were also boosted by a 22% rise in gross win across the Gala gaming brands to £35.8m, driven by growth in Galabingo.com which saw a 33% increase in spend per head after improvements to its VIP programme and CRM strategy.

Active customers were mixed across the brands with Galabingo.com players up 1% to 171,300 but Galacasino.com actives were down 17% 35,700.

Gala Coral’s Italy-facing Eurobet.it also posted strong growth with gross win up 10% to £11.9m and active players up 39% to 111,600 following a cross-channel marketing campaign and a series of television advertisements.

The operator said Eurobet’s share of the Italy’s online sportsbook market had remained roughly stable at 10% in January, despite the recent entry of bet365 which it said had added 40% to the market overnight and had seen other operators lose market share.

Eurobet’s sports win margin of 9.6% was significantly higher than Coral’s 4.9%, although the punter-friendly results meant both win percentages were down year-on year from 13.1% and 5.8% respectively.

The firm did not breakout figures for its Sweden facing Gala.se site.

Total EBITDA for the Gala Coral Group, which includes its UK and Italian retail estate, was up 11% to £67.3m which chief executive Carl Leaver attributed to its multi-channel strategy.

“The Group has continued to leverage the investments it has made in its key drivers of growth: online, multichannel and Italy, delivering an increase in EBITDA of £6.8m or 11% compared to the same quarter last year,” Leaver said.

“Coral Connect continues to drive sign-ups to Coral.co.uk in our shops. Connect customers are cheaper to acquire and significantly more valuable than single-channel customers, demonstrating the value of our multichannel platform,” he added.

Gala Coral recently combined its Coral Interactive and Gala Interactive businesses under a single management structure, a process which the firm said had gone “successfully”.

And the operator said that while the decision wasn’t “primarily an exercise in cost-cutting”, the merger was expected to result in savings of approximately £1m throughout the financial year.