Gala Coral Q1 revenues increase 41%

Gala Coral this morning posted a 41% increase in online net revenues and a 55% leap in EBITDA in Q1 following a period of favourable football results and double-digit growth across most areas of the interactive business.

Total net revenues for the 16 weeks ended 16 January 2016 were ?91.1m, compared to ?64.5m last year, while EBITDA, which last year totalled ?11.9m, increased to ?18.5m.

The operator’s flagship Coral.co.uk brand posted a 69% increase in net revenues to ?47.6m following a 173% increase in sports net revenue to ?19.4m, which was driven by a 50% rise in stakes and a 39% increase in first time depositors.

Coral said kind football results, up against a comparatively poor period of results in 2015, and improvements made to its CRM capabilities saw sports margin increase from 4.9% to 8.3%.

More than 40% of Coral.co.uk net revenues were derived through multi-channel Coral Connect customers during the period, with those customers acquired at relatively low CPA rates, the company said.

Despite strong growth in sports, gaming remained Coral.co.uk’s strongest arm with the vertical contributing ?28.2m of net revenues or 59% of the brand’s overall revenue base.

Gaming actives increased by 45% over the period while mobile accounted for 71% of gaming stakes, slightly more than the 70% of stakes (excluding horseracing) mobile contributed towards the Coral sportsbook.

The operator’s Gala-branded websites also posted double-digit growth, albeit at a slightly slower rate, with net revenues increasing by 11% to ?29m. That growth was once again driven by Galabingo.com which contributed net revenues of ?25.8m, a figure which represented an 18% increase on the same period last year.

Coral said the growth in Galabingo.com was in part down to further improvements to its VIP campaign and the continuation of its ‘Play Happy’ TV push, which saw actives increase by 20% and spend-per-head rise by 4%.

And for the first time, mobile was the dominant channel for Galabingo.com, with handheld devices contributing 56% of total stakes, up 11 percentage points on the same period last year.

Gala Coral’s Italy-facing arm Eurobet.it also posted strong growth numbers with net revenues up 42% to ?14.5m, sports net revenue up 95% to ?7.4m, sports stakes up 55% and net gaming revenues up 11% to ?7.1m.

Commenting on the results, Gala Coral Group CEO Carl Leaver was keen to highlight the contribution its Coral Connect card had made to its interactive business.

“Online growth was strong driven by CRM-led reductions in churn and high levels of customer acquisition at market leading costs-per-acquisition,” Leaver said. “Multichannel continues to play a key role in driving both customer acquisition and retention as customers embrace the unique features of our Connect offering.”

Leaver also offered an update on the firm’s proposed merger with Ladbrokes, which is currently under a phase two investigation by the UK Competition and Markets Authority (CMA).

“Timescales are in-line with our expectations, with the next key milestone being the CMA’s announcement of its provisional findings, and if required, proposed remedies, in mid-to-late April,” Leaver said.

“In the meantime our teams remain firmly focused on the execution of our strategy. We are confident that we are very well placed for the year ahead,” he added.