Gvc Share Discussion Threads

[crazycoops] 08/8/2016 13:32

GVC tends not to go up in a straight line of course but Festario will tell you that it has nearly always stayed within its trend line. What's happening at the moment is an increasing number of brokers are recommending +700p price targets, coupled with a premium listing, entry to the FT250 in September and a return to divis next year (last week's loan replacement pretty much guaranteed that).At this price, I believe we are in "buy and forget" territory on a 6-12 month view, although that doesn't stop me looking in here most days ?

[hubshank] 08/8/2016 13:22

Thank you. I agree plenty of mileage left with GVC, I am just not sure a share will continually go up in a straight line.

Yes PTY and BPTY went in a straight line too - just the wrong way! :-D

[woodhawk] 08/8/2016 11:22

Hubshank,

Within the last few days alone, GVC have announced a deal to reduce their debt repayments by a massive percentage and amount (43M euros) and reported, yet again, substantially increased recent trading figures. The company will shortly be entering the FTSE 250, and will thus have access to a significantly increased range of investors and trackers who will be obliged to buy. IMO, this is not a time to be uninvested.

[srpactive] 08/8/2016 09:49

Hubshank

Unfortunately you have been scared by prty and bpty, poor performing
shares and management. GVC are different, this is still in first gear,
they will only move into second once they join the ftse 250. My gold mining
shares make this look pedestrian. Keep an eye on one of my others gfs,announcing Wednesday.

dyor

regards

active

[garycook] 08/8/2016 09:21

GVC is undervalued.Investor,s buy,because they see growth in a well managed company.Why would someone buy today 31,000 Shares at 687.50,if you thought otherwise !!!

[hubshank] 08/8/2016 09:09

whilst this run has been amazing, do you not think it may have to pause for breath, retrace a little before moving forward again? Not many shares go up in a straight line. Just a thought, all comments welcome.

[coxsmn] 06/8/2016 22:04

Active, i was thinking the same, GVC owns the no1 sportsbook in Brazil, expect the Olympics to be lucrative.

[srpactive] 06/8/2016 20:04

Do not forget the olympics, and it is in our area Brazil.

dyor

regards

active

[coxsmn] 05/8/2016 19:55

Bpty only succeeded in decreasing revenues and profits year on year, now under the wings of Kenny and his expert team GVC has in less than 6mths turned the business around. This as Srpactive highlighted demonstrates having quality highly skilled management is paramount.

[mylands] 05/8/2016 18:46

Onwards and upwards we go.

To think it was only in February, when the BPTY deal was done that the shares were at 450p. Now, six months later they are over 50% higher!

[brownie69] 05/8/2016 17:55

Football season starts again tomorrow. The short gap since the end of the Euros should be good to keep football clients active.

[gilotron] 05/8/2016 17:44

run your winners boys, have a good w'end.

[coxsmn] 05/8/2016 17:39

I like the comment 'EPS set to more than double yr18 vs yr16', very pleasing.

[festario] 05/8/2016 17:00

I'm not quiet Mylands, just standing back in admiration of a chart which is a thing of beauty.Ecover might not think that 2% per day is a lot, but when you hold vast numbers of these as we do, then it is a hell of a lot of money per day!I invested half my Mum's savings in here for her at 270pI lost the other half on IOF.But now, from another inheritance, I have put another large sum in here for her today... at 680p, because she is earning nothing from it in a bank.I can't see me regretting it.

[gilotron] 05/8/2016 16:45

Please click on this link to see full report
GVC Holdings – Initiation (BUY, TP 738p) - A winning formula (19 pgs)

Liberum
UK | Technology, Media & Telecommunications | SMID Technology & Gaming | GVC LN | Market Cap £1,869m | 3 August 2016^

GVC Holdings – Initiation
A winning formula

BUY
Target price 738p | Publication price 657p

GVC is a unique quoted gaming operator in terms of geographic diversity and exposure to growth markets; only c.10% of customers from the UK means it is the least exposed of any peer to the risk of increasing duty/regulation in its domestic market. The synergy benefits of bwin are substantial and we expect EPS to more than double between FY16 and FY18. Our TP of 738p is prudently calculated using multiples at a discount to peers.

Key points

· Exposure to high growth markets

· €125m synergy benefits from bwin

· Pure online play

· Grey market exposure has risks

· Valuation still attractive

Catalysts

· Delivery of synergy benefits

· Upside risk to forecasts

· Improving cross-sell at bwin

· Further M&A activity

· Resumption of dividend

What market misses

· Cross-sell upside at bwin

· Unregulated market benefits

· More growth/less competition

· Widest geographic mix

Valuation

· EPS set to more than double FY18 vs FY16

· PT of 738p; discount to peers

· Strongly cash generative

· Growing dividend yield from FY17

Derivation of Price Target 738p


Year
Metric
Implied EV (£)
Implied mkt cap (£)
Implied valuation




Gaming sector EV/EBITDA
FY17
8.8x
1959
1925
Gaming sector P/E
FY17
14.8x

2189
Yield
FY17
3.0%

2020
DCF (WACC 10%)



2487





Average Market Cap (£)



2155
FD number of shares



292





Target price (pence)



738p


Source: Liberum

Summary Financials & Valuation (€m)

FY - December year end

Valuation (FY)
15A
16E
17E
18E
P/E (x)
n.a.
27.1
12.7
10.2
Div Yield (%)
n.a.
0.0
3.2
4.1
EV/Sales (x)
2.8
2.9
2.6
2.2
EV/EBITDA (x)
14.0
12.4
8.6
6.9
EV/EBIT (x)
25.2
16.7
10.8
8.5
FCF Yield (%)
5.4
1.4
9.4
11.7
Price / book (x)
3.6
1.8
1.7
1.6


Financials (FY)
15A
16E
17E
18E
Sales
810
849
898
971
EBITDA
163
198
268
314
EBIT
90.5
146
213
256
EBIT margin (%)
11.2
17.2
23.7
0.0
Net Interest
-3.9
-50.8
-8.4
-3.1
PBT
86.6
95.5
205
253
FD EPS (c)
n/a
28.6
61.2
75.8
DPS (c)
n/a
0.0
25.0
32.0

[gilotron] 05/8/2016 16:41

GVC Holdings Plc (GVC LN, 640p, £1,869m, BUY)
Stunning refinancing


GVC has announced it has entered into a commitment to replace its existing €400m loan facility with a €250m unsecured loan from Nomura. The rate of 2.0% above Euribor with no floor is a dramatic reduction on the 11.5% above Euribor with a 1.0% floor currently being paid. The refinancing will become effective on or around 1 February 2017 and this is arguably the most significant announcement from the group since the acquisition of bwin.party was completed, dispelling any unfounded concerns around the group’s business model and quality of earnings. The lower interest charge increases our 2017E EPS forecast by c6% and consequently our 2017E dividend forecast by c6%. Furthermore the group has revealed that trading remains strong with like-for-like revenue per day in constant FX up 31% YoY in July (26% in actual FX). This leaves the group well positioned to outperform against 2016E consensus expectations, in our view. The stock trades on a 2017E EV/EBITDA of 8.2x (12.3x P/E) and yields 3.8%. This appears too cheap to us given the momentum in the business and forecast earnings trajectory, Buy.
n Debt refinancing. GVC has announced it has entered into a commitment to replace its existing €400m Euribor loan facility from Cerberus at +11.5% above Euribor (with 1.0% Euribor floor) with a €250m unsecured loan from Nomura at 2.0% above Euribor (with 0.0% Euribor floor), effective on or around 1 February 2017. This is a significantly better than expected outcome with the group refinancing earlier than anticipated at a vastly lower rate (we had assumed 7.5% above Euribor). The loan is for an initial term of 12 months plus a six or 12 month extension period.
n Current trading and outlook. The group has revealed that trading remains strong with like-for-like revenue per day in constant FX up 31% YoY in July (26% in actual FX) boosted by Euro 2016 (H1: +11%, Q2: +16%). As at 24 July, the group had net debt of €154.3m. The key short-term challenge for the group is the migration of customers from historically GVC-owned sportsbooks to the bwin platform. The H1 results on 20 September will provide a further opportunity to update on this plus current trading and likely FY out-turn against market expectations; we believe the group remains well positioned to outperform against consensus of €197m EBITDA.
n Forecasts and valuation. The debt refinancing is expected to generate annual cash interest savings of €43.3m. The lower interest charges increase our 2017E EPS forecast by c6% and consequently our 2017E dividend forecast by c6%. Our free cash flow forecast increases by c60% and net debt falls by 66%. Our 2018 and 2019 forecasts increase modestly given the already very low levels of debt we had previously assumed (see table below). Our 2016 forecasts are unchanged given the 1 February 2017 effective refinancing date. The stock trades on a 2017E EV/EBITDA of 8.2x (12.3x P/E) and yields 3.8%. This appears too cheap to us given the momentum in the business and forecast earnings trajectory and against a sector average 2017E EV/EBITDA of c10x and closest peer Paddy Power Betfair (PPB LN, Sell) on 16.0x. We see fair value of 1030p, 61% potential upside, Buy.

[coxsmn] 05/8/2016 16:22

npt another good place as well for big payout, imho, Dyor.

[srpactive] 05/8/2016 16:01

Yes that if what a lot of fund managers will be thinking
before our ftse 250 inclusion. Gvc the place to be.

Always back good management, I was told when very, very young.

dyor

regards

active

[timanglin] 05/8/2016 15:49

Do I want to be in Wmh, 888, rank or GVC?. No brainer. Fwiw luckily I sold all my 888 and put them in Gvc. Dyor. IMHO.

[brownie69] 05/8/2016 15:47

It seems like ages ago that we were wondering whether GVC would be able to hold above 600p!!

Still short of Hills. The future is digital and their results were terrible in that regard. Plus I still cant see the Rank/888 takeover happening.

[ecoover] 05/8/2016 15:36

Higher push would be nice , those with level II are in the know.

[mylands] 05/8/2016 15:31

ecoover

Nothing special!! Methinks you are too greedy!

An interesting fact is the amount of stock continually going on the bid. At the moment there are 6,564 bidding at 684p and 1,277 on the offer at 684.5p. Gone is the time when we had a paltry 100 or so shares bidding. Looking like there is a head of steam building up to push the stock much higher.

[ecoover] 05/8/2016 15:21

2% is nothing special , however it is nice to see climb up almost every day.

[mylands] 05/8/2016 15:01

It's gone very quiet here which surprises me as the stock is up nearly 2% on the day and looking like it is on another leg upwards, maybe into the 690's.

[mylands] 05/8/2016 09:01

srp

Ah, I see the market has woken up to the reality of the position at Hills and now it's down 7p. Should have shorted it first thing this morning!