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Gala Coral to Sell off its Bingo Business

From the outside in, it may appear that all is rosy in the garden of Gala Coral, with Q3 profits of £193.9m beaming out of its fiscal reports. However, looking at the latest bingo news and taking the view from the inside gives you a totally different picture.

Profits for the Gala Bingo portion of the business sunk £4.9m to £47.8m, and earnings fell £3.1m to £11.9m as the beautiful British weather was blamed for the drop in profits.

At its peak, Gala Bingo was the proud owner of 174 land-based bingo halls in the UK. That number has been in steady decline since 2007, and they now own a reported 144, and yet it still represents 21% of all land-based bingo halls in the UK.

Reports suggest that Gala Bingo has a player database that creeps over the 5m-mark, and yet only 1.2m of them are currently active.

That number is declining and with declining numbers come the closure of the fixtures and fittings, and ultimately the employees. Gala Bingo is currently going through a restructuring program to reduce the current employment number that stands at 4,801.

So what does this all mean?

Reports from the city suggest that Gala Coral have reached out to a series of investment bankers with a view to operating a strategic review of the business
for a potential float.

Goldman Sachs appears to be at the head of a cue that contains the likes of Credit Suisse, Morgan Stanley, Deutsche Bank and Rothschild.
The news on the grapevine is the strategic review will raise questions about the long term profitability of the land based bingo business, which is valued at an estimated £250-300m, and could be sold to make a potential flotation seem all the more attractive.