Gan Share Discussion Threads

[texeltom] 31/7/2018 16:11

overhang cleared?

[rivaldo] 31/7/2018 15:44

Liberum are forecasting £1.65m EBITDA this year, rising to over £6m next year arising largely from all the contracts about to come into play this H2 onwards.

I'd have thought that this level of cash inflow would be more than enough to fund any further investment necessary.

[ramridge] 31/7/2018 15:15

Re. cash burn and the need for additional funding
- the balance sheet @ YE2017 shows a net cash position of £2.7m about the same as 2016
- looking at the FY2017 cash flow statements, they got a cash injection of £2m from the convertible bond.
- So effectively the cash burn last year was around £2m - £2.5m
- the convertible bond was redeemed from the additional issued shares in June raising £7.5m
- so I make the net cash position now roughly £2.7m at start of year - £1m cash burn to date + £7.5m fresh equity - £2m loan redemption = £7.2m

Do they need to raise further funds before the year end ? I don't think so. What they have in their coffers now can sustain three times last year's cash burn.

Happy to be corrected.

[molatovkid] 31/7/2018 14:36

carcosa, I bought into this cash burning, loss making, years away from anything company some time ago and am up 53%. It was actually more than that but I averaged up significantly recently. If you know of anymore cash burning, loss making, years away from anything companies like this, then please let me know.

This market has only opened up recently following legislation changes, however I suspect that once others see the money rolling on in, then the rest will follow suit pretty quickly.

[noujay] 31/7/2018 14:23

Not that kind!!!

[noujay] 31/7/2018 12:57

Glad to see some more activity the past few sessions

[noujay] 31/7/2018 12:51

Regarding cash burn what do you have it at?Whether they are cashflow positive I'm not sure. Ebitda is bit of course they are not the same albeit a decent indicator.There were several advance payments which are in the latest period and couple that with cash raised (specifically for growth) then I don't think there will be a money raise.

[carcosa] 31/7/2018 12:28

Thanks for (some) of the feedback.

Ref the Debt. Yes I had missed that item. Reading back I see those expensive Loan Notes were in fact with Michael Smurfit rather than him having a placing he went the Loan note way which is interesting, and perhaps overall a positive thing to do IMO. Hopefully next time around they will actually issue some 'real' Loan notes at a more reasonable interest rate. Anyone recall if an explanation of the situation regarding the issuance of those notes to Smurfit was provided?

However my point remains that cash burn is such that further debt will have to be raised at the end of this year; am estimating around 0.8m left in the bank at year end, and given the likelihood that additional funds will also be needed commensurate with the market 'opening up' then the cash burn rate will likely increase thereafter because no real profits are likely in the medium term.

The expense rate of the R&D is indeed appropriate, unlike many other software companies. Definitely a plus point.

The recurring revenue nature of the business is a positive attribute.

"...essentially the US is opening up and it’s very clear that not only is it doing so but equally that this is just the beginning. "

My point is that the 'opening up' appears to be years away in reality and very few States are indicating sports betting will be permitted. Indeed the Parx/GAN agreement is set against the backdrop of a $10m fee 41% tax rate (read elsewhere it was revenue) may be seen by some State legislatures as the starting point now. Nevertheless potentially more than enough for GAN to handle in future years.

Whilst M&A activity is interesting at a sector level I am loathe to buy into a loss making company in the hopes of it being taken over. If it happens then great, but I see that as a bonus. Does anyone see the reverse e.g. GAN as being in an acquirer of companies?

'with GAN you're buying potential' Yes, definitely agree with that. How to value the company today is a bit of a black art though. Forecasts are not that great considering where the share price is.

Would still be interested in seeing the investment case here with some real numbers. At the moment it seems a share to keep an eye on but no reason to be heavily into this share until mid/late 2018 especially after a potential equity raise; the company is certainly raising its profile to go that route.

Anyway, I think I have made my points and will await to see what the rest of the year brings!

[thefartingcommie] 31/7/2018 11:13

carcosa.


re The current interest payments on their current debt is quite high too...REALLY??????.. some elucidation needed please

and if bank rates do increase as they are predicted to then further debt options will be correspondingly higher.(yup..that figures;)..)


..I gave up on carcosa's 'analysis' when he failed to spot that GAN is now debt free....ditto

gosh....how emabarrassing;)

(so typical of some armchair anal(ists) that appear out of the woodwork from time time to time)

...keep up the good work!;0

[mirabeau] 31/7/2018 11:02

I gave up on carcosa's 'analysis' when he failed to spot that GAN is now debt free.

with GAN you're buying potential not earnings growth. The also expense all their R & D which is conservative in the extreme

It's a spec stock and a higher risk one but the potential is there for all to see especially with elevated M & A activity in this sector

My position here is quite small but looking to add on newsflow

[noujay] 31/7/2018 10:48

Was just going to point that out regarding the debt. That's just been taken care off with enough capital raised to support rapid growth of GAN real money partners. Of which they will participate in the revenues of ongoing. Recurring revenue here is one of the key aspects as well as the game change from social to real money - that's where the differences will lie. The company further receive significant upfront payments from new partners.Separately lots of questions in there but essentially the US is opening up and it's very clear that not only is it doing so but equally that this is just the beginning. I'd suggest that yesterday's MGM/GVC deal is evidence of an overriding conviction in that, as well as partners such as PPB and SBTech who will certainly have done their own DD prior to contracts.Useful to ask hard questions of course and good to hear a different perspective, but the company are responsive to investors so you might drop them a line. Suggest it would also be worth tracking back through the last couple of years releases too, as well as the broker notes.

[cottoner] 31/7/2018 10:38

GAN debt free

See RNS of May 24th.

Repayment of Convertible Unsecured Loan Notes


London & Dublin the "Company"), an award-winning developer and supplier of enterprise-level B2B Internet gaming software, services and online gaming content in the United States, has provided one month's notice that the Company has elected to repay and redeem in full the £2,001,483 9% Convertible Unsecured Loan Notes 2022 issued by GAN in April 2017. Such notice of repayment is subject to withdrawal by the Company should the Subscription as announced on May 21, 2018 not be approved by shareholders on June 7, 2018.



Following the full re-payment and redemption of the Convertible Unsecured Loan Notes the Company will be debt free effective from June 25, 2018.


Above confirmed in RNS of June 7th.

[carcosa] 31/7/2018 10:27

Just thought I'd pop in here and ask a few questions, as I am relatively new shareholder in this company having taken out a speculative position.

From what research I have done I am left with the following impressions.

Being a shareholder means that you are really backing the potential of the US Supreme court regarding the acceptance that sports betting is now 'possibly' legal in the US. Each state has to enact the appropriate legislation. In practice this will be up for legislature debate in most States sometime in 2019 and thereafter, most likely, it will be 2020 before anything substantial is likely to happen.

However most States/Governors are not interested in having sports betting so most will not permit it. Many States require a resident's vote which is unlikely to succeed and Many Governors are against the idea. States which have Indian reservations where betting is permitted have special rights most likely meaning that anywhere outside of those areas will not be able to have sports betting anyway; significantly making barriers to entry somewhat impossible.

The cash/economic benefits of sports betting to the State are seen as very attractive but gaming licenses and revenue share to the State are extremely onerous so it seems unlikely that new entrants will want to take that risk. Furthermore even in States that have legal sports betting they are often very restrictive in what and where they can offer sports betting

In summary then I don't see much really changing in those States that do not already have Sports betting approved i.e. the existing nine US States.

Now GAN... Any investor reading their Presentations i.e. 'me' can't help but be impressed by all those hundreds of millions of US dollars. However they are talking about their customers business and not their own which is pitiful in comparison. Furthermore much of their rhetoric is in reality a sales brochure for their customers; discussing things like how much GAN drives customers to them.

For all of their bluster GAN is not making a profit; in fact forecasts do not show a meaningful profit until December 2020 on a reduced turnover to that of 2019. But that is so far in the future as to be pretty much meaningless. Seems apparent to me that by the end of this year there will have to be yet another cash call on investors or debt to keep the lights on. The current interest payments on their current debt is quite high too and if bank rates do increase as they are predicted to then further debt options will be correspondingly higher.

But it is worse than that. If all these news reports are to be believed then additional R&D/investment/admin will be required so quite possibly a significant investor dilution is possible in 2019.

The current share price is being held up by newsflow alone. There is no basis for valuing GAN at these stratospheric levels based on real world performance. Real business growth is unlikely to kick off until 2020 by which time homegrown USA competitors will have entered the field.

So now I have got the bulls riled up; what am I missing in terms of visibility of real profits (other than news hype)?

[noujay] 31/7/2018 09:55

Nice article on GAN there thank you

[mirabeau] 31/7/2018 05:55

30 Jul

SBTech – Focusing on speed to market in newly regulated territories


SBTech is sponsoring Betting on Sports 2018, the 3rd edition of the largest international sports and betting trade conference at Olympia London.

Ahead of the 18-21 September event, we asked the company’s Chief Commercial Officer Andrew Cochrane to disclose some of SBTech’s promotion plans for #boscon2018 and to pick out the sporting event he would most like to attend.

SBC: What are you looking forward to at Betting on Sports?

AC: On Tuesday, the ‘Betting on Americas’ track is of particular interest, due not only to the recent partnerships we’ve agreed in the States, but also because SBTech remains a core member of the American Gaming Association’s sports betting taskforce. We are committed to maintaining our advisory role as the sector evolves, and the afternoon session on M&A, scheduled to cover leadership and sustainability, will therefore be especially interesting.

I’m also looking forward to hearing the views of speakers throughout the day on the vital importance of R&D, and on how geolocation will be critical in ensuring compliance across state lines in what could become a patchwork of jurisdictions. The expansion of our activities in Latin America, another topic under discussion, is also a key component of SBTech’s strategy, with massive growth potential across the region and increasing convergence with the US landscape.

On Wednesday, the ‘Future of Betting’ track is sure to provide a wealth of insights, with the issues of multi-screen interaction and regulation high on the agenda. In-play mobile betting is central to the SBTech offering and omni-channel solution, and since the group is renowned for speed to market in newly regulated territories, our answers to these questions are essential to ensuring continued growth in the coming years.

cont..

[mirabeau] 31/7/2018 05:53

Parx Teams Up With GAN, Becomes Second PA Casino To Announce Sports Betting Plans

Bill Grinstead on Jul 30, 2018 Sports

While the cost of entry into PA’s sports betting market may be staggering, a second state land-based casino has now confirmed that it will bite the bullet and take the plunge.

Parx Casino, the Keystone State’s highest grossing gambling venue, announced today a partnership with software developer GAN to offer sports betting via retail and online channels.

U.S. gaming giant Churchill Downs, which recently agreed to purchase Presque Isle Downs, was the first to announce its intentions to enter the sports betting market in the state, revealing a strategic partnership with software developer SBTech in May.

GAN already provides the platform for Parx’s social online gaming site, and will do the same for the property’s real money Internet casino when the state gives the green light for launch later this year.

The agreement revealed today will extend the partnership for several more years and see GAN even more deeply integrated with its brick-and-mortar partner.

“Following the execution of this extension and amendment, GAN now offers clients a Platform equipped with multiple options for integrated Sports betting to be launched seamlessly alongside GAN’s market-leading Internet casino product,” said Jeff Berman, GAN chief commercial officer.

“We welcome the opportunity to deliver Sports betting in the retail channel, as well as online, through GAN’s unique Platform containing patented technology.”

GAN’s slow and steady U.S. expansion

Based in the UK, GAN is a major B2B supplier of iGaming enterprise software for both land-based and online casinos. The company got its start in regulated U.S. Internet gambling in 2013, when it launched as the backbone of Betfair’s U.S. online gambling site in New Jersey.

Betfair Casino, which, prior to opening up as a skin under one of Golden Nugget’s licenses had virtually no brand recognition in the country, has risen to become one of the state’s top earning gaming sites.

GAN struck its second partnership in the Garden State several years later with Ocean Resort. The newly reopened property (formerly known as Revel) recently went live with its own online gaming site, powered by GAN technology.

Earlier this month, the FanDuel Group announced that GAN would play a part in its sportsbook operation as well, providing the player management system for the nascent sports wagering operator.

Accepting the new reality

GAN has had its sights set on PA’s iGaming market for several years, serving as the software solution for Parx’s play money online casino, which went live in 2015. When lawmakers legalized Internet gambling, sports betting, and DFS last year, GAN had already laid the groundwork to offer real money online gambling through its land-based partner.

Parx execs, however, have always been wary of iGaming, with company Chairman Bob Green expressing concern over the legalization of the industry back in 2014. Now, with the industry fully legal and regulated, Parx appears to have accepted the new reality, going all-in in a bid to maintain its position as market leader.

The property, which unsuccessfully argued against limiting online casino skins, was the first of nine state venues to officially file a petition for an online gaming site. Parx was also one of several casinos to lobby against sports betting skins. In a recent filing of temporary regulations, state officials appear to have acquiesced, limiting sports betting sites to one per casino.

Filling in the gaps

GAN’s flagship product is its GameStack software platform, which provides casinos with a turnkey solution to offer Internet gambling and ancillary services like marketing, fraud detection, and more.

While the GAN platform is robust, even winning EGR’s Platform of The Year award in 2015 and 2016, it has partnered with a third-party sports betting provider to round out its offering. That supplier is SBTech, a sports-focused software company that services over 50 sports books, casinos, and lottery operators in 14 regulated markets.

SBTech announced in January of this year — before the Supreme Court ruled to overturn a law prohibiting sports betting in most U.S. states — that it would supply the sports wagering platform for GAN’s U.S. clients.

The SBTech/GAN integration will allow GAN to dip its toes into the retail sports betting market, something in which it had little experience before.

SBTech will also be the go-to technology solution for Churchill Downs, which will enter the PA sports betting market through Presque Isle Downs. SBTech partnerships with other U.S. sportsbooks are likely on the horizon, as the industry is set to explode in the coming years.

When will Parx’s sportsbook go live?

There is still work to be done before players can place bets on their favorite sporting events at the Philadelphia area’s largest casino. The state began accepting sports betting license applications on May 31, but it is still unclear which casinos have officially applied.

Through press releases, we now know that Parx and Presque Isle Downs will pay the eye-watering $10 million fee and approximately 41% tax rate to offer sports betting both at their land-based facilities and through online and mobile channels. Other casinos may balk at the upfront costs and pass on the industry altogether.

In its announcement today, Parx stated that it would open its sports betting operation sometime in the second half of the year. Many operators in New Jersey are scrambling to get their products ready to go live before the start of football season, a lucrative time for sportsbooks.

While Parx and GAN may be ready to launch at any time, regulations still need to be hammered out and licenses must be officially approved. So whether the casino will be able to launch its sportsbook before Week 1 of NFL season is still anyone’s guess.

[busterdog2] 30/7/2018 21:01

Yep, momentum gathering pace.

[mirabeau] 30/7/2018 20:55

It's only a matter of time here.

[cottoner] 30/7/2018 20:50

Must expect further news in short term from more GAN US clients.


From GAN RNS issued on May 15th:


Dermot Smurfit, CEO of GAN commented

"GAN has been preparing for sports betting since Q4 2017 at the request of multiple US Clients who asked GAN to review, procure and support the delivery of sports betting solutions both online and for deployment in the retail channel in the event PASPA was overturned. We welcome yesterday's repeal of PASPA and confirm that sports betting will be material to GAN's revenues going forwards, commencing in the second half of 2018."

[noujay] 30/7/2018 20:43

There's no doubt plenty of newsflow to come as things push on - the pace is really cranking up now

[old fool2] 30/7/2018 19:45

Trade 43 & 44
62,700 is a rollover no buy no sell, possibly t20 settlement

[igoe104] 30/7/2018 16:44

someone managed to purchase a-load @ 72p just before the bell 54k worth. and another 45k buy after the bell.

Can't get why so many folks are willing to press the sell button at the first sight of any profit. especially with GAN growth prospects over the next couple of years ?