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GVC Holdings to make about €200mln provision after Greek unit slapped with big tax bill

Last updated: 08:45 26 Jan 2018 GMT, First published: 07:50 26 Jan 2018 GMT

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GVC, which did not provide further details, said it planned to appeal the tax bill

GVC Holdings PLC (LON:GVC) saw its shares fall today on news it will make a provision of about €200mln in its 2017 accounts after its Greek unit was slapped with a tax bill from a local authority.

In a statement after market close on Thursday, the sports betting group said the €186.77mln tax bill was “substantially higher by multiples” than the revenues generated by its Greek business during the period of assessment, 2010 and 2011.

READ: GVC to buy rival Ladbrokes Coral in deal worth up to £4bn

GVC, which did not provide further details, said it planned to appeal the tax bill.

During the period of the tax assessment, the Greek business was owned by Sportingbet PLC, prior to its acquisition by GVC, the company said.

The group - which last month sealed a deal to buy Britain's largest bookmaker Ladbrokes Coral PLC (LON:LCL) – also said it expects full year net gaming revenue from Ladbrokes to be around €1bn.

READ: GVC Holdings reports strong third quarter

Earlier in December, GVC had forecast their core earnings to be at the top of its range after reporting revenue of €873.2mln in 2016.

In a note to clients, analysts at Shore Capital commented: “The bill is equivalent to c28p per GVC share (4p per Ladbrokes Coral) based on the enlarged entity and can be comfortably met out of debt facilities and cash flow if required. We suspect a lower settlement would be the likely outcome.”

In early morning trading today, GVC shares shed 4.4% at 906.5p, while Ladbrokes Coral was down 3.6% at 166.05p.

UK gaming firms saw their share prices slide at the start of this week on reports that the government will slash the top stake on high street fixed odds betting terminals to just £2.

 -- Adds share price, broker comment --

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