Gvc Share Discussion Threads

[plasybryn] 17/1/2018 19:40

Finals 5th March I believe

[noujay] 17/1/2018 19:28

Could be a bit of that but also general uncertainty probably on the whole thing. Personally I like the merger having looked more at the numbers of both companies (perhaps just got more used to the idea as well) but it's not so easy to get a good read on it all just yet so people aren't racing to buy stock. Companies who are playing the arbitrage game until the merger completes also contribute to keeping it in a range. Just my opinion anyway.

[plasybryn] 17/1/2018 18:06

Is the "review" due shorthly, re: stake limits holding us back?

[woodhawk] 17/1/2018 16:40

Festy,

Thanks for your view. I'm glad I'm not the only one who sees the pitfalls here. That trend line didn't help during the BWIN pullback, so lets see this time.

[festario] 17/1/2018 15:48

I actually agree with every point Woody just made, and in addition the dividend yield is falling.But, there is one other thing I can't ignore. The 3 year chart has 928 right at the bottom of the trend line.Whenever I've bought at that point over the last 8 years even, I've been well rewarded.All my funds are committed to VRS at the moment, but if I had spare I'd be buying here now.

[woodhawk] 17/1/2018 13:28

I would want a substantial discount on the current price if I were to consider buying in before the Lads deal is well done and dusted. The magnitude of the pullback during BWIN was more than 20% from the then top. If that were to recur, we'd be looking at an share price around 800p. IMO, the risk is much larger than with BWIN and I don't think any of it is in (or rather 'out') of the price at present. I know the GVC management team have been excellent in the past - and I have backed them during the down times and reaped the rewards. I don't have the same faith re the Lads takeover. The Turkish business was also poorly handled, imo. On the bright side there's the World Cup and the new Russian venture. However, for me, they don't outweigh the Lads situation. In the end analysis, given the risk I perceive, I *think* I may achieve superior gains elsewhere in the near term.

[macarona] 17/1/2018 13:13

Woodhawk - what is your price target before you consider buying again? And what is your rationale behind that price? Is it previous takeover price reaction / retraction? Or
is it a case of GVC is overvalued given the risk of the Ladbroke takeover? Or something else?

Just interested to know your perspective, if you are willing to share.

Mac.

[woodhawk] 17/1/2018 12:51

Ah, economic theory disproved by YOUR interpretation of Rank's performance. I'll leave you to it, I'm clearly wasting my time here. Be interesting to see how much lower it goes then.

[loganair] 17/1/2018 12:23

Woodhawk - I am sorry to say that you are wrong

An example, many years ago Rank stood at 280p per share, over the next 2 years the share price fell to just 60p while all the time an Asian company picked up 29% of Rank and another Asian company picked up a further 12% while a 3rd picked up nearly 10%. These 3 companies buying 51% of Rank a yet the share price fell significantly.

[shayadfn] 17/1/2018 11:18

I'm a mid-term holder, since 2013, when sbt got taken over,I since added 88k to my holding.

[woodhawk] 17/1/2018 11:18

"all those investment managers who have piled into this stock over the past month"

Then why has the share price been falling, mylands? Simple supply and demand says you are wrong.

[noujay] 17/1/2018 11:06

I think Lads are due a trading update as well this month which ought to be informative. Seems to me that all told both companies should expect a very strong year and if there's any potential for quick synergy wins ahead of the WC for example, that can be accomplished without disruption to the smooth running of the business, then they could reasonably expect to run ahead of projections quite quickly.Personally I think that Kenny is likely to make some swift disposals from the Lads portfolio as well - hopefully at a better price than the recent Turkey "sale"!

[mylands] 17/1/2018 10:01

f66

Are you a longterm holder and therefore sitting on decent profits? If so, close out your holding and sit there while you watch your prediction come true. No point having negative views to see them come to fuition and lose what you might have made!

You are not alone in questioning the disposing of the Turkish business and I cannot believe that all those investment managers who have piled into this stock over the past month haven't questioned our CEO about this.

[srpactive] 17/1/2018 09:37

M

Thank you excellent work.

L

KA willknow the Aus business very well due to being
part of the SBT purchase, sounds good.
Sell wmh the shops from lads and we buy the WMH Aus business.

f66

You are very negative, seems to be a pattern.

[fenners66] 17/1/2018 09:30

So when they announced that they were giving away the Turkish business I questioned how many years worth of synergies that would swallow up.

The Barclay's numbers above put that north of 3 years !

Since the synergies are assumed to be the main driver of growth over the next 3 years that means it's all for nothing.

Still disgusted at the nature of - well we are making so much lets give away €150m - and if you are a manager at Lads that keeps his job but has to sack staff in order to generate synergies that KA has just given away at the sweep of a pen - how do you feel ?

This may be one integration that comes with a lot of pain and resentment.

[shayadfn] 17/1/2018 08:45

Hello all,
Still waiting to add, looking to see if it falls below £9.20

[mylands] 16/1/2018 19:49

orp

Not that much, I simply take the 8.3 announcements and put them on a spread sheet. I find it fascinating that a 3 billion pound company can be 'owned' by so few investors and that they are continuing to increase their stake in the company.

When I started the spreadsheet there were just four on the list, those with 3% plus stakes, totalling 31%. After the deal was announced in early December, within a couple of days the perecntage rose to 65%. Now it's 85%, quite some change!

[oohrogerpalmer] 16/1/2018 19:31

Mylands,
Lot of work there thanks,
Would suggest that the big boys have trust in the management to make the deal work.
Also will be interesting in a year or so when results start flowing in that there won't be many shares in circulation for making it easy to buy!!

[loganair] 16/1/2018 13:51

If Hills do and the business is on line rather than retail shops I hope GVC buy their Australian business as would fit well with Ladbrokes Australian Business.

[coxsmn] 16/1/2018 12:44

Today's Telegraph"BOOKMAKER William Hill may ­jettison its Australian business as the costs linked to running the division ­become increasingly onerous.The British bookmaker bought its way into the Australian market under former chief executive Ralph Topping with the $670m (£486m) purchase of Sportingbet in 2013 and the $34m ­acquisition of tomwaterhouse.com in the same year."

[trentendboy] 13/1/2018 16:24

The note is not a bad piece of work and matches my views in most cases.

I suspect they are underestimating the ability of GVC to galvanize LADS punters from better more and being cross sold to.

GVC have an impressive marketing team in my experience to keep punters, get them playing more and to recruit new ones.

The economies of scale argument is crucial here - this is the deal that they needed to break into the top few players in the market.

A truly remarkable journey from what many of us bought into many years ago

[jeff h] 13/1/2018 15:03

Share Price used 925p (per 29th Dec)

EPS Cases/Scenarios 1,2,3 = 85p, 96p, 103p

P/E Cases 1,2,3 = 10.9, 9.6, 9.0

The Cases/Scenarios dont allow much for Revenue synergies which could be argued as conservative given GVC's track record.


REVENUE SYNERGIES – WE PLACE A LOWER MULTIPLE ON REVENUE SYNERGY GUIDANCE VS.
COST SYNERGY GUIDANCE IN GAMBLING m&a DEALS. IN OUR EXPERIENCE, COST SYNERGIES
TEND TO BE DELIVERED WHILE IT IS MUCH HARDER TO FULLY SEE THE REVENUE SYNERGIES. AS
SUCH, WHILST THE COMPANY HAS STATED IT WILL GENERATE REVENUE SYNERGIES, WE DO NOT
MAKE MAJOR ASSUMPTIONS THAT THESE REVENUE SYNERGIES WILL BE MATERIAL. IN OUR 3
SCENARIOS WE ASSUME REVENUE SYNERGIES WILL BE £10M, £20M AND £30M IN 2018
RISING TO £10, £30 AND £30 FROM FY19 ONWARDS: THIS REPRESENTS JUST 0.3-0.8% OF
PROFORMA 2018 SALES. WHILST THIS MAY SEEM VERY CONSERVATIVE, WE THINK IT WILL
TAKE TIME TO PROVIDE CLEAR GUIDANCE. WE ASSUME THESE REVENUE SYNERGIES DROP
through to EBITDA at 50% which is in line with both GVC’s contribution margin
AND THE DROP THROUGH RATE WE HAVE SEEN AT OTHER ONLINE OPERATORS. THE KEY
REVENUE SYNERGY OPPORTUNITIES INCLUDE
A. CROSS-SELLING LEADING PRODUCTS BETWEEN CUSTOMER BASES
B. IMPLEMENTING BEST IN CLASS CRM AND BACK OFFICE SYSTEMS
C. IMPROVING MARKETING SOPHISTICATION
D. DIFFERENTIATING PRODUCTS FOR EACH BRAND

[nurdin] 13/1/2018 14:30

Surprising no comment from anyone else on the Barclay note.

[nurdin] 12/1/2018 21:50

Excellent..thank you Jeff