Jpj Share Discussion Threads

[x54v] 27/6/2017 16:28

Quite a frenzy of buying going into the close by the looks of it.

[x54v] 27/6/2017 16:15

Jim Mellon likes these it seems:

"Jackpot Joy (LON:JPJ), a UK listed company, but one with mostly continental operations, looks very cheap, at only 5 or 6 times earnings, and with stable projected growth in earnings, as well as strong cash generation of over £100m a year."

[actofwill] 22/6/2017 14:09

Great news today with earn-out paid out from own cash resources. Market is warming up to the name slowly...

[actofwill] 17/5/2017 08:27

Insider buy today from CEO

[actofwill] 16/5/2017 16:02

Good overview:

[actofwill] 16/5/2017 14:47

Excellent quarter: record breaking revenue in all major segments.

[actofwill] 12/5/2017 12:29

Most eclectic of that list is HG Vora Capital Management - savvy special sits shop with a good track record taking concentrated bets. UBS is hedging out Paulson & Co is my best guess as Paulson took a position via equity swap - however both get reported so a bit of double counting there.

It shows that smart money is piling in now whilst it's cheap.

They (and I) will then hand over their holdings at "full" price to the passive money UK pensions/incos/AMs that would like to see the dividends to be initiated first - in order for their brains to be able to easily compare it to the mainstay UK bookies and then say "it trades at a 5% discount to peers .. hmm lets buy" - rather than the absolute 50% discount it trades at now.... (with some risk etc. see above, DYOR)

[3moneymaker] 12/5/2017 11:12

Major Holdings according to latest TR1 Notifications are:

Intertain Jersey 24% (-2%)
UBS 7,08% (+1,08%)
Odey Capital 5%
Paulson & Co 5,43% (+0,43%)
HG Vora Master Fund 7,1% (+1,7%)
Abberton Capital 3%

Total major holdings 51,64% including Intertain Jersey

What does these major buy indicate - probably that funds and institutional owners want to hold JPJ long term because of it's low value. The drawback is that the free float decreases.

[tomstone12] 11/5/2017 22:45

UBS buying, good stuff!

[3moneymaker] 09/4/2017 22:54

STRIKING IT LUCKY WITH JACKPOT JOY

Read this article!

[...]

[actofwill] 05/4/2017 15:04

Solid results. Good comp overview:

[actofwill] 28/3/2017 17:05

Agreed - especially on the B2B point nothing new there. Their biggest competitor, Gala Coral, relies on B2B software from Playtech. So nothing unusual here. The operating agreement has been extended to 2030 so no major disruption in the near term. CFO still being there I think is because the re-listing to the UK required some form of continuity. Compensation has been adjusted in line with UK comps.

The non-compete will fall away in April 2019 but this is also when JPJ can pull the "liquidity" away from Gamesys if they were looking to compete which is now shared - which is the no.1 attraction for customers. More importantly: JPJ owns the brands, player database and some exclusive content and has the ability to move platform and internalise outsourced staff.

Also the new POC tax will be amended to include bonuses (which until now were left out) - taking another lever away to enter the market - as the most common way for a new entrant to pull customers away is through initial aggressive bonusing.

To compete in online bingo nowadays from scratch will be tough to say the least. Higher debt means more risk - but if you are the no. 1 online bingo provider with a moat it could actually be a good thing for returns for equity returns instead. Also it will take time to re-rate to a "template" that the investors in the UK will understand the story. Management will roadshow extensively to explain the story to investors in the next coming weeks.

DYOR and go through all the risks - its not an easy one but the same reason why the opportunity exists IMO.

Results tomorrow at 7 AM GMT. Conference call at 1pm GMT

Send an email to [e-mail] to get conference call details.

[getinthere57] 28/3/2017 16:21

Most of the points against JPJ are in the past. Currently relevant criticisms from shorts revolve around the debt including earnout and that Gamesys owns the underlying IP.

The debt should be analyzed by tranche and while the most expensive tranche is at Libor +9, it is the first to be paid and constitutes a minority portion of the debt outstanding. Moreover, increasing cash flows show that the debt is manageable as long as one time costs are reduced. For me, hearing about what can be expected going forward regarding one time costs will be paramount. Up until the costs have been high but now that the LSE listing is over, the expectation is that true cash flows should be much improved in Q1 and beyond.

In terms of the IP, there are many examples of B2C relying on B2B to supply gaming products. While it would have been better for JPJ to own the IP, the agreement in place is long enough that if they should choose could build their own IP out of the Vera and John acquisition which has capability. Hard to see how Gamesys would try and compete with JPJ when without this agreement they are operating at a loss. They are much more likely to go after other income streams, at least for now.

So, I would agree that it is reasonable to apply a discount to JPJ but I would argue that the current share price reflects too pessimistic a view. It may take another quarter of positive cash flow and showing much reduced one time costs to attract the more pessimistic investors.

[brownie69] 21/3/2017 07:23

Be very careful here. The old Intertain business had a horrible past and not all the old self enrichment guard are gone. Keith Laslop still CFO for example.

ActofWill your comparison with William Hill is misleading. Jackpot Joy do not "own" Jackpot Joy technology, it was "bought" on a 10 year lease. Thus at a minimum there will be major business interuption if they have to move platforms. Or they will have to do a new deal with Gamesys (the owner of the Jackpot Joy platform) and thats going to cost I'd have thought.

[actofwill] 21/3/2017 07:13

Marc Cohodes: he launched an attack last year based on false grounds. The Gamesys accounts that came out earlier this year covering the period of up to 31 March 2016 has proven his assumptions wrong. Otherwise he just re-hashed some of earlier points of Spruce Point. Even though fundamentally wrong - he timed his Canadian short well given the investor fatigue there and the upcoming re-listing - which created some forced tax sellers.

Gamesys accounts:

[ddbsba] 20/3/2017 21:44

Am i rite in saying this is one of Marc Cohodes new shorts ?

[actofwill] 20/3/2017 13:39

William Hill:

£249m cash flow vs £2,394m current market cap

JPJ:

£100m cash flow vs £419m current market cap

[3moneymaker] 20/3/2017 09:19

Refresh prior to Q4 earnings report 29 March.

Financials: High margins, balance sheet rapidly improving

JPJ has grown very rapidly since 2014. Headline growth has been driven by acquisitions but it has also delivered good organic growth in each of the three divisions. Management has forecast 2016 adjusted EBITDA of C$175-195m; Edison’s C$180m estimate implies 7% organic growth despite adverse FX.

We expect revenue to grow by 14% in 2017 (in £m) and 11% in 2018 with EBITDA rising by 6% pa despite cost headwinds, and margins remaining above the industry average. Historic reported results have been affected by high levels of transaction costs and non-cash items but we expect only modest charges going forward. Intertain geared up in 2015 with the acquisition of Jackpotjoy and adjusted net debt (including earn-outs) was C$790m, but we estimate this fell to C$638m (£385m) by end 2016.

We forecast additional earn-out payments of £87m in June 2017, £31m in June 2018 and £10m thereafter, which can be funded from cash flow. JPJ is highly cash generative with an operating cash flow/adjusted EBITDA conversion rate of c 95%, implying c £100m a year going forward, underpinning our expectation of a rapid fall in net debt from H217.

[actofwill] 19/3/2017 21:37

douglas fir: that's the "complex past" I have referred to. But apart from the self-enriching management that has now been replaced with a seasoned UK team - none of the other points have stood the test of time:



If any doubts - please shout and I will do my best to answer as we went through all the points in detail.

[douglas fir] 19/3/2017 19:15

.....caveat emptor

[actofwill] 19/3/2017 08:50

Excellent hire indeed also given the complex past and operating structure.

[tomstone12] 19/3/2017 05:40

Happy to see Jason on board, read many of his notes on others companies, very knowledgeable and capable

[actofwill] 07/3/2017 11:29

The earn-outs are included in the net debt calcs. See e.g page 72 of the investor presentation of last September.

[actofwill] 07/3/2017 09:12

Isn't whole point of investing to buy at a discount before others wake up to it?

Otherwise: high leverage + stable cash flows also means high returns on equity...

Company have stated in their strategic review that cashflow will be used to pay down debt and dividend so this will allow it to "re-rate" such that UK peer group investors will get comfortable with it.

I have been pretty much through all materials -any questions please shout.