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Annual Report & Accounts 2015 - PRINCIPAL RISKS AND UNCERTAINTIES
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Risks and uncertainties Mitigation economic (continued) Brexit: if the outcome of the June referendum is that the uK leaves the eu, this may increase the volatility of global currency and financial markets. in addition, it may reduce the Group's ability to operate in certain eu markets without a change in domiciliation, which could carry a higher tax burden. monitor the situation. the Group has licences in a number of eu countries including: malta, Denmark, italy, france, romania, Greece, Germany, as well as licences in the Brexit zone (uK, Gibraltar). Financial increases in euriBor will increase the interest cost for the Group. the loan arrangements contain covenants which, if breached, would trigger early repayment of the facility. maintenance of cash headroom mitigates some interest rate risk and provides flexibility of early repayment. Covenants are monitored on a monthly basis. operational the market place becomes more competitive via new entrants or more attractive products available from those or existing competitors. withdrawal of payment processing facilities. reliance on third party payment and multicurrency processing systems. Dependence on third party software. Dependence on key personnel. Loss of major introducer of business. Loss of major customer. poor sports results. abnormal jackpot wins. Business integration process following the acquisition of bwin.party: risk of business disruption and the impact on staff; risk of unexpected costs or constraints on delivering expected synergies. monitoring of the competitive landscape. working with software providers to enhance the product offering. multiple payment processing methods used by the Group. spreading of risk across payment processors with varying deposit and withdrawal methods. Long-term contracts in place with key suppliers. there is a broad base of executives below Board level which has been strengthened with recent joiners. Competitive revenue sharing models applied and monitored regularly. Key introducers are offered long-term revenue prospects with the Group to ensure alignment of financial interests. highly diversified customer base with thousands of customers across all brands. sports represents c.50% of the Group's net gaming revenue and as a matter of policy they are not hedged as over the longer term sports results trend to the Group's expected margin percentage. revenues from some business lines have a jackpot insurance policy; others do not, as a matter of policy. regular monitoring by management. GVC HOLDINGS PLC ANNUAL REPORT 2015 BUsiness ReVieW 27