Chairman's Statement
2015 was a momentous year for the Group. Not only did the Group increase its revenues and Clean EBITDA by 10% in the face of adverse currency movements, but also shareholders voted overwhelmingly for the acquisition of bwin.party on 15 December 2015 which completed on 1 February 2016.
The acquisition was structured as a mixture of a share and cash offer to the bwin.party shareholders; and financed by an equity placing of £150 million and a senior debt facility of €400 million. The Group is thus well resourced to see through its restructuring plan and to derive the targeted cost synergies on the combined businesses.
The Group has augmented its board by the recruitment of three additional non-executive directors: Norbert Teufelberger, who joins us from bwin.party, Stephen Morana and Peter Isola. As a result, we have added significant expertise to the Board in the areas of accounting and finance, regulatory matters and business development. In addition the operating management has been significantly strengthened below the board level with senior appointments in operations, product, sales and marketing and investor relations.
The Group's performance across the year was excellent. Increased and effective marketing in all territories led to: growth in Net Gaming Revenue (NGR), up 10% on 2014 to €248 million; Clean EBITDA up 10% to a record €54.1 million (at the top end of market expectations) and Profit before tax, excluding exceptional items, increasing 21% to €50.0 million. Dividends paid in the year increased from 55.0 €cents to 56.0 €cents. I am pleased to be able to say that the Group has increased its revenues, its Clean EBITDA and its dividends for each of the last five years. As shareholders will be aware, however, one of the conditions of the debt financing in connection with the bwin.party acquisition is a dividend holiday in calendar 2016.
GVC has a proven ability of generating value through successful integration of significant acquisitions and management is confident this will continue. We anticipate generating significant synergistic savings through the integration and restructuring of operations, which we aim to complete over the next 12 months. Our target is to drive €125 million of synergies from the combined businesses, and we remain confident that this can be achieved. However, the opportunity for the enlarged Group goes beyond cost synergies and we are excited by the current growth trends and potential across the breadth of businesses.
The Company has a highly focused and entrepreneurial culture, supported by an employee cash bonus structure as well as its long term incentive plan with market-priced stock options together with a total shareholder return measure. Furthermore I, together with the executive directors, have acquired a highly meaningful personal financial stake which should assure shareholders that our financial interests are closely aligned. Returning cash to shareholders via dividends has been core to the Group's philosophy and this remains the case. As with the Sportingbet acquisition, we aim to return to paying dividends as quickly as our borrowing facilities allow and is prudent from a balance sheet and cash flow perspective.
GVC now has significant scale and capability, and has positioned itself to make further acquisitions if they are sufficiently accretive for shareholders. We operate in a challenging and competitive market but one that also presents significant opportunities. I believe the Group has never been better placed to face these challenges and pursue the many opportunities.
GVC will be posting its Annual Report to shareholders on Saturday 30 April 2016 and it will be uploaded on our website (www.gvc-plc.com) from that date. The AGM will be held in the Isle of Man on Tuesday 24 May 2016. Lastly, I can confirm that we are actively pursuing our stated aim of seeking admission of the enlarged Group to the Premium Segment of the Official List as soon as practicable following publication of the 2015 Annual Report and we will update shareholders accordingly.
