DAVY VIEW

GVC’s strong Q3 update confirms a favourable trading environment for gaming operators at present. The resumption of sports, still elevated levels of gaming activity and recovery in retail have resulted in net revenue (NGR) growth increasing to 12% (-22% in Q2). Progress in the US also appears to be gathering pace with revenue expectations and market share increasing through the period. Upgraded guidance is likely to drive a c.7% increase in our current year estimates. While much of this momentum would appear to flow through to 2021, we must also adjust forecasts for recent Germany regulation-related adjustments (impacting next year’s EBITDA forecasts by c.£70m).