32red Share Discussion Threads

[markhutch] 29/3/2016 11:09

I am a shareholder here and not quite sure why Shares Mag highlighted 32Red in the article but the thrust of it is that in the 2016 budget Osbourne stated that the Point of Consumption tax will be expanded to cover discounted and free online bets from 1 August 2017. So far the POCT has excluded free plays and free spins. This would affect the whole online gaming industry but it mentions 32 Red in the article for some reason.

[markhutch] 29/3/2016 10:55

There was an article in Shares Mag last week about impact of more taxes in 2017 budget to hit Gaming industry - might have spooked a few here.

[shakeypremis] 29/3/2016 10:09

This share has been doing this a lot of late. Quick 5-10% drops in a day which almost always recover on the day or shortly after. This probably another one of those days, presents a buying opportunity, I am just trying to work out if this is the bottom or not. Being quoted 138.5 to buy at the moment.

[sharestobuy] 29/3/2016 09:21

Not sure why this is falling

[stevenlondon3] 22/3/2016 11:21

Would someone who knows about TTR's accounts help me out on the following question..thanks in advance. Cash balances in 2015 rose from £7.0m to £10.3m partly because "Trade and other payables" rose from £4.6m to £10.1m. What is included in "Trade and other payables"?

[eeza] 22/3/2016 08:42

If 'sleekmoney' is correct then the RNS is wrong - as it clearly states Harrison has SOLD x shares & following the DISPOSAL he is now interested in x.
The Co should therefore be forced to issue a clarifying RNS - but I suspect that it is 'sleekmoney' who has it wrong.

[sharestobuy] 22/3/2016 08:24

It looks like that director purchase on Friday was a buy afterall and a big buy too. Alot of confidence here from the board so I'm guessing growth is still looking good and further gains are due soon.
Here's the link:

hxxp://sleekmoney.com/32red-plc-ttr-insider-acquires-444187-50-in-stock/1055601/

[panic investor] 21/3/2016 12:39

Indeed Dave and they will never put a BIT on the end of a digital record to indicate which way round it is.

Corruption really imho

0=Sell
1=0

It's not as if they don't know whats a buy and whats a sell, after all a person or bot had to press the button so to speak.

Thats the markets for you though - corrupt

[dave2608] 19/3/2016 15:15

Apologies, was getting my info off the lse site (Director Deals), which indicates a buy. Looks like they have it got it wrong. Amazing how many times sells are listed as buys and vice versa.

[eeza] 19/3/2016 12:22

Director sold one third of his holding.

[dgbell7] 19/3/2016 07:43

No it was a Director's sale dave2608

[dave2608] 19/3/2016 00:40

Don't see anything about a sale. Just noticed that on Friday, one of the directors bought a significant wedge, 296,125 @ £1.50 a share, which equates to about 450Ks worth. That sends out a very bullish signal.

[hutch_pod] 18/3/2016 22:59

I guess it might mean there was a buyer or two sorted out at 150p for the Ops director's sale?

[shakeypremis] 18/3/2016 11:31

Some big sells going through at £1.50

[djbilywiz] 15/3/2016 13:15

Stockopedia updated.12m Forecast RollingPE Ratio - 13.2 PEG Ratio - 0.35EPS Growth - 61.4%Also Slater PEG is 0.22I hold.

[paleje] 14/3/2016 18:51

IC updated their tip on Friday, still a buy but not as tasty as it was:-

House broker Numis expects pre-tax profits of £10.5m in 2016 leading to EPS of 11.3p, up from £5.9m and 7p in 2015.

IC VIEW:
Chief executive Ed Ware said he had upped marketing spend to £13m in 2015 from £9m to take advantage of the exit of some 200 brands from the industry. The 35 per cent rise in like-for-like sales in 2016 suggests some success on this front. The stock looks a tad more expensive these days, but a forward PE ratio of 14 still demonstrates value compared with peers. Buy.

[from8to800] 14/3/2016 15:58

Is there a reason for it or just normal profit taking likely to be met with further buying from others soon enough?

[ulinbac] 14/3/2016 15:25

It just keeps dropping

[dave2608] 11/3/2016 21:17

DD

With a 66% increase in revenues for this year on the cards (I think this will be upgraded as the year goes along), the marketing spend will have generated a £32 million increase in revenue. I'd take a temporary depression in PBT to get an increase in revenue like this.

£4.8 million was paid in POCT. If it wasn't for this tax, EBITDA would have been 76% up.

You say profit is sanity. Globo were recording massive profits. I'd say cash generation is sanity. I can't think of many more cash generative businesses than on-line gaming (providing the company gets it right of course). There might be a few though. Let me know if you come across any.

[discodave4] 11/3/2016 21:06

Sorry - Gross profit before marketing costs (£28m) was up £7 million, so an extra £6 million marketing cost only gained in effect an extra £1 million gross profit (not net income).DD

[discodave4] 11/3/2016 21:02

Thanks dave2608,Agree their increasing marketing spend to increase revenue, which is working, but the costs incurred are increasing at a greater rate than the income is.As you say marketing spend increased by £6m, however, this should have generated (if my maths is correct) an additional £24 million revenue (based on their stated marketing pay back of 3 months), however NGR only increased £16.5m.Gross profit before marketing costs (£28m) was up £7 million, so an extra £6 million marketing cost only gained in effect an extra £1 million net income.Marketing costs, admin expenses and exceptional items was about £27m, thus operating profit is a measly £1.05m (on £48m revenue!). Last year op profit was three times more - somethings not working out!.Even if you look at the headline EBITDA it was less than last year.The numbers just don't stack up for me, revenue is vanity, profit (real not imaginary via underlying EBITDA) is sanity.Appreciate the opportunity to discuss/debate and try and learn but do not wish to upset holders too much! so will wish you all the best.DD

[dave2608] 11/3/2016 19:30

To add to the last post, companies can grow by acquisition or organically or a mixture of both. If at the back end of last year £6,269,418 had been spent on an earnings advancing acquisition, rather than marketing, the PBT and eps would have been similar. In essence £6,269,418 spent on marketing would be the same as spending £6,269,418 on an acquisition that gives you £32 million a years worth of revenue, which lets face it, is a bit good.

[dave2608] 11/3/2016 19:08

DD

Sorry, didn't realise the Roxy deal was in staged payments. However that is neither here nor there in the big scheme of things.

Your concerns are I believe that EBDITA isn't translating into PBT and you are skeptical of EBITDA and would rather trust PBT as a measure. To me you have to take each case on its merit, so lets exam what's happening in the case of 32Red. This is my analysis of the situation, so please feel free to disagree as I could have my logic wrong.

Look at Marketing costs in 3. Segment information of the final results.

Underlying 2015 - 13,047,197. 2014 - 8,785,015.
Italy 2015 - 1,427,407. 2014 - 493,302.
Roxy Palace 2015 - 1,073,131. 2014 - 0.
TOTAL 2015 - 15,547,735. 2014 - 9,278,317.

£6,269,418 more has been spent on marketing, that's why the PBT and eps figures are low. Marketing has been ratcheted up. They haven't spent this money to make a lower return. Marketing has been ratcheted up to make every £1 invested to return £2, £3, £4, maybe more.

There are around 400 on-line gaming companies operating in the UK. The POCT has made a playing field where the smaller companies that can't scale up in the current environment will be put out of business. The big players like Paddy Power Bet are concentrating on other things. This leaves a land grab opportunity in a fragmented market, leaving companies occupying the middle space, like 32Red and it's ilk, in a sweet spot. That's why the marketing has been ratcheted up. It's a carefully thought out strategy and they are executing it. Is this ratcheting up working? I'd say it was. Revenues, including Roxy Palace, are up 66% in the first few weeks of the year. The company had record revenues of £48 million last year. By my calculations they are on course for £80 million this year, an increase of £32 million (66% of £48 million).

So that's my take on things. Even if I'm right (and I might be wrong), the share price may go down in the short term if investors in the aggregate see things differently. Share prices ultimately are moved by investor sentiment.