Gvc Share Discussion Threads

[mcp01] 21/9/2016 21:39

Hallelujah, back in profit at last. Having bought near the highs in 2005 and held all the way through the lows of 2010/11, it has only taken 11 years to get back to where I started. The dividends have been nice but probably cancelled by the depreciation in buying power of Sterling. To hold so long, Mad? stupid? naive? probably all but lets be kind and call it investment.
Word of caution, The high of today exceeded the highest monthly close of 2005 and the high of today was 2 pence shy of a perfect ABCD pattern on the monthly chart. The price is currently at a very strong resistance level. a healthy correction could be on the cards.
The last pull-back in price (daily chart) £4.30 up to £6.20 then a pull-back to £5.25 equated to a little over 50% pull-back.
A similar 50% retrace of the last upswing ( monthly chart) would bring the price back down to £5.80 ish. If a 61.8% pull-back happens , that will bring the price back down to £5.25 ish
Ahhhhhh the joys of investing.

[srpactive] 21/9/2016 18:32

B69

Excellent post, Intertain and Russia it is then, charge Kenny.

dyor

regards

active

[woodhawk] 21/9/2016 17:44

Excellent summary brownie69! Thanks.

Any comments on the £10M-ish trade at 719p just posted? Mylands? Same price and scale as those large trades prior to the results, wasn't it?

[duncan doughnut] 21/9/2016 17:39

Fandabbydozzy couple of days here, it's the gift that just keeps giving.

[trentendboy] 21/9/2016 17:38

Good post brownie

[brownie69] 21/9/2016 17:35

From an industry perspective, I'd guess at;

Intertain. its in a right mess. New CEO, ex Sportingbet thus would know Kenny. They have 3 platforms, too much debt and need cash to deleverage. I could see Kenny picking up one of those and interating with Foxy to create a Bingo power house.

Betclic. European operator of some scale. Would be great synergies with Bwin. Private so maybe could be acquired at sensible price.

888 Never. The key family shareholders are too difficult , greedy and as a result their business will stagnate on the M&A front. Its run ike a private company. Good operators though.

Russia is going to regulate hence my outsider would be Marathonbet. Private and fast growing in Eastern Europe. Got scale and cover different complimentary markets.

Hills is a possability in two years. They are going to be the next Ladbrokes, Off the pace and nepotism rules with their board. Screwing up digital in a big way.

[festario] 21/9/2016 16:00

...... looks like I'm not going to get that 760 or higher at close.

[festario] 21/9/2016 13:07

Holding on to most of yesterday's meteoric rise is a great performance today. Any close over 760 is real consolidation.A blue finish would be astonishing.

[gilotron] 21/9/2016 10:20

● H1 results were ahead of market expectations: The first set of H1 results for GVC and bwin.party on an integrated basis showed a beat to expectations at the EBITDA level (over 10% above consensus). Q3 has started strongly (net gaming revenues are up by 12% on a pro-forma basis) and the company declared that it is confident it can achieve a result at the upper end of market expectations (cEUR200m-205m EBITDA). We have therefore revised our figures, which has resulted in a double-digit upgrade to our profit forecasts (this also reflects significantly lower D&A guidance). Synergies are expected to be fully realised by 2017, when the company will also resume paying dividends (target: 50% payout on the prior year’s net earnings).

● Tone of the analyst meeting was extremely bullish: The integration of bwin.party is proceeding quicker and smoother than expected, management said. The migration to a single platform has started and is expected to be completed by May 2017, and marketing expenses have been quite low (21% of sales), thanks to efficiencies that have arisen from the merger. Furthermore, the bookmaking margin has improved as a result of plugging GVC’s trading team into bwin.party’s sports brands. GVC placed lots of emphasis on the IT platform’s development – the company is clearly on a path to becoming increasingly reliant on its own technological assets.

● Plenty of cash available for dividends and M&A: On our new numbers, GVC will be completely debt-free at the end of next year. This would leave room for a more generous dividend policy (GVC may be considering this, if such a policy is consistent with its marketing and/or M&A plans) and, given management’s strong value-creation track record, for further acquisitions. On M&A, the company said it would consider opportunities, although it added that it will not pursue deals at any cost, as there is plenty of untapped potential for organic growth.

● We remain buyers of the stock, and increase our price target to GBp840/share: On our new numbers, and based on our DCF model (10% WACC, 2% perpetual growth), we believe GVC’s fair value is GBp840/share (versus GBp760 previously). On top of this, we believe there is scope for a more generous dividend policy, possible value-accretive M&A, other B2B deals (in addition to the one that management recently sealed with Betfred) and a further revamp of the bwin.party brands. At the current market price, the stock still trades on less than 9x EV/EBITA and c11x P/E 2017E, which we believe are attractive multiples when paired with high double-digit EBITA growth expectations. We recommend that investors should keep buying GVC.

[loganair] 21/9/2016 10:08

srp - It seems to me WHM will want to higher price, they think they´re worth far more then they actually are, just look at the 888/Rank bid for WHM.

[srpactive] 21/9/2016 09:58

I feel you want more fat to trim, wmh will give them
more regulated exposure and private equity will pay
a premium for the shops. Also straight onto the
ftse100. I reckon wmh, come on KA, also wmh will
be a very good and respected name when we crack the US.

dyor

regards

active

[trentendboy] 21/9/2016 09:46

They could do worse than taking out 32Red - however, they are very well run so less fat to trim.

[mylands] 21/9/2016 08:58

Still think 888 is the one that GVC will go for. We know the Israeli families , the major shareholders in 888, are sellers but only at the right price, which when Hills had a go they said was 300p.

[sogoesit] 21/9/2016 08:48

I'm not a gambler nor do I use insurance (life or other).
My biggest holdings are in this stock and insurers!

Not necessarily any correlation as I also buy stocks whose products I buy like Nokia years ago, Apple more recently etc.

On the other hand companies that I think could excessively profit from me, like gaming or insurance or financial managers... I think they're worth avoiding as a consumer but worth buying as an investor.

[srpactive] 21/9/2016 08:45

It was tongue in cheek, although I do see an investor is
different to a gambler.
A gamble to me has a definite finish end of race, an
investment hopefully does not.

I do give a little to charity as probably everyone does.

regards

active

[mylands] 21/9/2016 08:12

Well, if I win or lose, I will make a donation.

Just realised how contradictory your statement, 'I'm not a gambling man' is, for someone investing in an online gaming company!

[srpactive] 21/9/2016 08:05

I am not a gambling man.

[mylands] 21/9/2016 07:39

active

My money is on 888 being the next big acquisition, not WMH. A fiver on it, with the loser to pay a tenner to a charity of the winner's choice. Are you on?

[srpactive] 21/9/2016 07:35

The stockbrokers stock has been unveiled GC, trying to keep
it down. The article was wrong as a poster said here yesterday
75% of revenue from regulated markets, which sends us higher
up on the radar. I think our KA is eyeing up wmh, do not forget
he knows how good the sbt parts they had via the joint takeover.
Sell the shops to private equity, here to the ftse100.

dyor

regards

active

[mylands] 21/9/2016 07:16

Great press reports on the Interims. Two articles in The Telgraph. Seems like GVC has at long last been recognised for what is has now become - a giant of the online gaming sector.

[garycook] 21/9/2016 03:22

675 T/P WTF do Citi know.Definely behind the yield curve on GVC.Now 775 would have been nearer the mark.Hindsight is a wonderful thing.Next Target £8 and upwards to the FTSE 100 for sure.Believe in Kenny Alexander,because that is his belief and target.

[garycook] 21/9/2016 03:22

675 T/P WTF do Citi know.Definely behind the yield curve on GVC.Now 775 would have been nearer the mark.Hindsight is a wonderful thing.Next Target £8 and upwards to the FTSE 100 for sure.Believe in Kenny Alexander,because that is his belief and target.

[gilotron] 20/9/2016 21:20

1H16 Earnings; Bwin Integration On Track
GVC (GVC.L)

· Citi's Take — GVC delivered a strong 1H16 result. Adjusted EBITDA was €104.4 million, up 42% YoY on a pro-forma basis. Actual EBITDA was €91.2 million, 9% above Citi expectations of €83.5 million. The strong operational result has been an outcome from the improved trading performance with Net Gaming Revenue up 12% YoY (on a constant currency, pro-forma basis) as well as cost saves. GVC’s 1H16 Adjusted EPS was €19.8 cents. GVC maintains that it will resume dividends in 2017e following its likely upcoming Cerberus debt re-financing in February 2017.

· Bwin Revival — GVC’s 1H16 result confirms the early benefits from the integration of Bwin. Sports is outperforming with +18% YoY constant currency NGR growth, mostly due to the Bwin revival in key markets, cross-sell and favourable results during the FIFA Euro Championships. Games Labels (including Casino and Poker) had NGR decline 3% in 1H16. GVC has implemented several strategic initiatives that are expected to benefit future periods. Pleasingly, PartyPoker is showing growth and 3Q16 Games Label NGR is up 6% in constant currency.

· Outlook — We expect 2016e will be a strong year for GVC as it executes on the integration of Bwin. While the improved Bwin performance is positive, the largest driver of earnings growth is the realisation of cost synergies. Our forecasts are consistent with guidance and expect the synergy run-rate to be €125 million by the end of 2017e.

· Valuation — GVC shares currently trade at a 2017e EV/EBITDA of 10.0x. Our 675p target price implies a fair-value 2017e EV/EBITDA of 9.2x. We apply a discount to other gambling peers given the high portion of group earnings derived from unregulated (or yet to be taxed) gambling markets.

· Implications — We expect the 1H16 performance will support consensus 2016e EBITDA upgrades of c.5%. While early integration benefits are positive, our Neutral rating reflects the view that the sales outperformance will be more difficult to repeat in future periods and cost synergies are fully captured within the current valuation.

[gilotron] 20/9/2016 21:19

GVC: Strong H1 numbers, guiding to upper end of range for FY16 (BUY)

Delivers strong set of H1 numbers (all H1 numbers are pro-forma basis)
Net gaming revenue (NGR) was €442m (+8% yoy), slightly ahead of €439m guided in Q2 update in July. As noted in July, Sports NGR +10% and Gaming +8%. H1 clean EBITDA (pre share payments) was €104m vs. our expectation of €93m. The beat is mainly driven by better cost performance than we anticipated (faster delivery of cost synergies). Marketing as a % of NGR was 21% in H1.

Sports performance very impressive & driving all the growth
While Sports NGR was released already, its worth highlighting how all H1 growth was coming from Sportsbook customers. Sports labels (i.e. revenue from Sports book customers) saw sports wagers +5%, but NGR +10%. The group stated while sporting results helped, better risk management actions were a major contributor. Gaming NGR from sports book customers was +20% yoy to €157m, driven by cross sell and improved product (>500 new games).

Gaming labels weak in H1, but improved performance in Q3
On the Games labels (i.e. games driven customers), gaming NGR was -6%, due to currency weakness and the competitive UK bingo market. The group did state that it has added new talent, is introducing new products and increasing marketing, and is starting to see benefits (Q3 to September 15th revenues are +6% in cc).

Current trading and positive outlook
Current trading in the 11 weeks to Sept 15th is +15% (cc) or +12% reported. Integration appears to be more than on track, with completion expected by end of Q217 and €125m cost synergies re-iterated. Management states that the organic growth opportunities from the bwin.party acquisition are greater than expected, which will be exploited through increased marketing. Management is confident of delivering a result for 2016 at the upper end of market expectations. Elsewhere, CFO Richard Cooper is to step down in February 2017, to be replaced by Paul Miles (ex RSA, Wonga). The group is committed to resuming dividends in 2017. Encouragingly, during H1 just under 70% of revenues came from markets that are regulated, in the process of regulation or where GVC pays taxes or VAT.

The positive GVC story is in great shape!
Overall, the H1 numbers give us further confidence in our positive call. The integration is more than on track, and encouragingly management have outlined that the organic growth opportunity is greater than originally expected. The group is going to increase marketing investment to take advantage of this opportunity, which augurs well for the medium to longer term growth outlook for the group. In terms of our forecasts, we currently sit at the lower end of the consensus range for FY16 (EBITDA pre SBP of €188m), but we are ahead of consensus in FY17 at €266m. We are likely to increase FY16 towards €205m given today’s guidance. In terms of FY17, we are likely to remain around €266m, as while the business is delivering strong growth, the group does face a number of incremental taxes/duties at different stages throughout 2017. Re-iterate BUY.

[frankiethecabbie] 20/9/2016 20:23

https://www.gamblinginsider.com/news/2437/gvc-ceo-we-will-not-sell-any-bwinparty-assets-but-more-m-a-could-still-be-on-the-table-for-us