Gvc Share Discussion Threads

[mnomis] 25/1/2017 13:52

Slippery - what happened to this report that was meant to be coming out? Apart from sector and technicals, what specifically are you referring to please?

[slipperysidewinder] 25/1/2017 13:25

Looking pretty grim here.

What happened to your £6 floor velod????

A lot worsevto come here imho.

[diviincomesearch] 25/1/2017 13:12

Same position as Mylands. Holding too much to top up and there's nothing fundamental to me that says there shouldn't be anything but value in this. Unless there are shenanigans going on.

Let's hope end of year results are belting! Nothing seems to be halting the slide atm.

[mnomis] 25/1/2017 12:48

@ Jfishy - think guys with enough money to move the market are able to see past the loss ...

[jfishy55] 25/1/2017 11:48

Thanks for the kind comments nurdin & Calahan. Yes, nurdin, many of the risks could indeed apply to other companies in the sector and did exist when the share price hit its high (it comes from interims 20/9/16). Please note that the "risk register" is GVCs - I did not write it, they did! Interesting thoughts about how the sector as a whole may perform this year Calahan, something I should put some thought into I think.

I was wondering where I got the risk register from as I hadn't noted the source in my notes. So I had a search & found it in the 20/9/16 interims. Given that that was about when the share price started to soften I've had another look through them & noted something that might explain why the slide started. I wonder if some investors perhaps looked at the negative profit for H1 2016 and sold out without looking further?

Of course, the slide could be down to plenty of other things & the impact (if any) is difficult to quantify, however, PBT for H1 2016 was minus 84.2 million euros.

However, this needs to be offset against unusually high exceptional items (89.3 million euros, the majority was down to the bwin acquisition) & depreciation/amortisation (65.5 million euros, 52.2 attributable to the acquisition).

So I wonder if some have looked at the PBT loss & not realised it is down to the acquisition - as can be seen by looking at the *adjusted* PBT where we see a profit of 51.3 million euros & therefore a business that is on track!

Anyway, just a theory but i thought I'd share it.

[mnomis] 25/1/2017 11:18

@ Calahan - tend to agree. Sector not helpful, and neither are technicals. But long-term, fundamentals should win the argument. I am eagerly awaiting next results announcement, and am loathe to make any major trades at current levels either selling (as think long-term offers too much value) or buying, as already a big holding and could go lower still (and am not trying to day-trade this stock) ... GLA (and welcome back SSW!)

[calahan] 25/1/2017 10:04

The main bear case I can see is with the overall sector. 12 months ago there was a lot of extra fuel around due to M&A possibilities, when it seemed like no company was off limits, or out of reach, in regards to a merger or take over. And although there is still the odd M&A talk now and then, it's nowhere near what it was.

So this extra fuel has gone, which alone will likely subdue the sector (or at least prevent/suppress premium ratings). But the fuel has been replaced with a lot of uncertainty regarding regulation. In particular the number of countries that have either seen new governments come to power (completely new in the US, partly so in UK), or have the risk of that happening this year (Germany, France, Netherlands, maybe others I can't recall OTTOMH). Plus lets not forget the uncertainties added to the whole eurozone by Brexit. And we all know how much markets and sectors hate uncertainty.

Despite this, you can still say, and argue, that not every company is affected by overall sector sentiment, and that some companies can defy their sector trend. Which is true. But it's also true that you get companies that should, in theory, defy their sector trend (for whatever reason), but just are not able to (for whatever reason). And over the past few months I have started to think this is the situation with GVC. It's a share that should be able to defy the overall sector trend, since the numbers, news flow, and potential all seem to be pointing in one clear direction. Upwards and onwards. But it isn't able to do this because it can't defy the overall sector. One day we might find out why this is the case, but chances are we won't.

Personally I don't intend to sell any shares unless the picture/news changes. I already hold too many to increase my core holding, but I have been scalping a few extra shares here and there via a few trades. And I suspect I will keep doing this while waiting for sentiment for this sector to turn favourable. Although I have a bad feeling that it could last for all of 2017 due to the various elections and Brexit uncertainties, but I'm sure the resumption of the dividend will offer me some comfort during this time.

All IMO (no advice intended either way).

(Edit) jfishy55 - Good post, and thank you for sharing your thoughts.

[velod] 25/1/2017 10:03

595p? I've held on to the view that 598p was a support tied to the 600 area. If it closes below 598p similar to what it's showing now, then that's the last I go on about 600p support area and accept the trend as the share price slips away from holding on to the wreckage raft and sinks down to the icy depths as it channels the final DiCaprio scene in Titanic.

[nurdin] 25/1/2017 09:51

Jfishy,thank you for your detailed response..all quite reasonable.However one could argue that the majority of risks you mention could apply equally to other gambling stocks and were there when the share price got propelled close to £7.50. But I take your points.

[jfishy55] 25/1/2017 09:39

nurdin, here's a few:

- The dividend is a "special" rather than a standard dividend. I would expect the normal dividend to be resumed but perhaps some investors are staying clear until they know a normal, ongoing dividend is re-instated.
- NGR was down quarter on quarter - hopefully that is a one off but people may be worried it isn't.
- Directors options are very generous.

Personally, I'm waiting for NGR to be confirmed as a blip & to see an up-trend established before I buy. I'm fairly comfortable that going forward the good points outweigh the concerns.

Also, I have this in my notes, GVCs risk register as of a few months ago (so some risks may have been de-risked since):

TECHNOLOGY

The Group may be threatened by Denial of Service attacks or similar.
Natural or man-made disasters may affect continuity of operations, undermining player confidence.
With technological advances and continuous shifts in how consumers access our services, maintaining and improving technology may become more complex.
Following the Acquisition of bwin.party, the Group is undertaking a significant technology platform migration, which carries a project risk.
REGULATORY

Conflict between jurisdictions in which the customer resides and where the service is provided; risk of enforcement action.
In some markets regulation is not clearly defined or adopted; there may be changes in regulation in all markets.
TAXATION

Imposition of additional gaming or other indirect taxes.
Transfer pricing between group entities could be challenged by the tax authorities.
Changes in VAT rules within the EU impacting the digital economy.
ECONOMIC

Conditions in the Eurozone remain challenging and this may erode customer base confidence and spending power.
Foreign exchange movements; risk of certain countries exiting the Euro.
Brexit: following the outcome of the June referendum, the volatility of global currency and financial markets has increased. Future changes as a result of the referendum may reduce the Group's ability to operate in certain EU markets without a change in domicile, which could carry a higher tax burden.
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.
OPERATIONAL

The market place becomes more competitive via new entrants or more attractive products available from those new entrants or existing competitors.
Withdrawal of payment processing facilities.
Reliance on third party payment and multi-currency 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 : risk of business disruption and the impact on staff; risk of unexpected costs or constraints on delivering expected synergies.

[mylands] 25/1/2017 09:06

There is one thing you can be certain of with shares, you can NEVER tell where they are heading next! Who would have thought BT would fall 20% in a day and we would see GVC fall from 680p when the statement came out about an increased div payout and good trading less than three months ago, to less than 600p today?

C'est la vie.

[nurdin] 25/1/2017 09:05

Id like to hear some bear views on this stock as I really cant find any !

[velod] 25/1/2017 08:55

Also bear in mind, although it's intraday'd below 600p on two maybe three occasions, it has stubbornly refused to close below 600p. Hasn't done it once yet.

Yesterday should have been a piece of cake, the best oppourtunity since last September for bears, and today it only has to shift 2p or so, that's all it has to do; their best chance ever in 5 months! (I realise I'm putting up a pretty weak argument here).

. . . But the point is, 600p has proved to be a tremendous support level.Tremendous!

. . . It's revisited the 600p area too many times to get away with it for much longer but one never truly knows which will be the support level that acts as the rebound.

[foot in mouth] 25/1/2017 03:01

Well, I ain't selling. It's dropped 20% from its peak - what share doesn't do that??

These shares are a bargain and as someone pointed out only recently, they will save loads switching to the much cheaper loan agreement. Then there are the consolidation savings etc.

This company has a great future and has a great accountant leader who has surpassed expectations always.

This shall rebound!

[rhuvaal2] 24/1/2017 20:27

VK ~ so you're not a long term GVC man.... my entry value is less than zero, just, and been here since it was a wee cap company. Good luck all

[value king] 24/1/2017 18:19

I've sold out today. They finally went through the support line and my stop loss setting.

I've banked a great profit and will probably return at sometime but will watch for now. It feels like £5 is a possibility.

[popper joe] 24/1/2017 17:38

He got "your" wrong!

[diviincomesearch] 24/1/2017 17:09

Slippy I'd like to congratulate you on learning the English language over your (all too brief) absence.

Have a gold star from me!

[slipperysidewinder] 24/1/2017 16:54

Just looking at a couple of posts predicting £10 by Christmas.

What Christmas it doesn't actually say.

The insider selling the attempt to paint a positive picture after getting dumped by betfred has obviously set alarm bells ringing.

[slipperysidewinder] 24/1/2017 16:40

The chart looks like a disaster zone here. Needless to say but a classic case of nothing lasting forever.

[slipperysidewinder] 24/1/2017 16:32

I said it would take time but would eventually retrace all gains over last year or two.

You all laughed. Your not laughing now.

People on the inside seem to be bailing. Worrying times.

[diviincomesearch] 24/1/2017 12:36

Billy Hill has been hit hard by an analyst downgrade from UBS.

Possibly hurting us too. But I don't believe we have much exposure to FOBTs and the Uk generally?

No point putting high sell orders on our stock to prevent shorting, far too much liquidity out there to make a difference.

[joan of arc] 24/1/2017 12:26

So the shorters are at it again. I trust all serious holders have put in a high sell order to prevent their shares being loaned out.

[nurdin] 24/1/2017 12:22

I wonder if Norbert has started selling again..he still has a fair bit.