Stride Gaming Share Discussion Threads

[someuwin] 27/9/2018 07:37

Edison yesterday...

"Stride’s FY18 trading update confirms the widely reported headwinds
facing the UK bingo-led market, with a c 3% decline in real money gaming
(RMG) in H218. More positively, FY18 RMG EBITDA appears to be in line (or
slightly better) than our recently reduced estimate. Importantly, Stride’s
high-margin proprietary platform is a key differentiator and the company
remains well placed to gain market share. The balance sheet is strong and
we expect strong cash flow through synergies and strategic growth. The
stock has fallen 60% this year on the back of downgrades and a UKGC fine
(which appears to be c £4m) and now trades at depressed levels of 5.8x
P/E and 3.3x EV/EBITDA for CY19e."

[someuwin] 27/9/2018 07:33

Does look very cheap now.

[basem1] 27/9/2018 07:22

No stock about at all. Being qouted 99.5p for just 4000 shares

[czar] 26/9/2018 08:09

This is the wrong price, someone will take Stride out imho, £63m market cap £25m cash making £16m profit and they own their own platform which must be worth more than the entire market cap.

[basem1] 26/9/2018 07:32

Surprised to see the fall, I had my finger on the buy button at 8 clock.

[rubberbullets] 05/8/2018 15:55

They will have to change the way they attract business

Will warn a second time and can get at sub 38p

[imjustdandy] 05/8/2018 15:36

CFO purchased £60,000 of shares at £1.55 only 9 weeks ago. 90p looks a bargain !

[pireric] 05/8/2018 15:12

Czar

Edison have £14m pre tax profit, so £11.3m post tax profit this year. This is before any RGD impact, which if as touted in the media, could lead to a 30%+ reduction in pre-tax profits on top of that.

On cash, £28m net cash at the end of February - £9.6m Tarco earn out paid in cash - £5.5m borrowings = around £13m true net cash before any fine paid

[czar] 05/8/2018 14:30

W Hill got a £6m fine, I'd expect STR to be much less considering the scale of the business. They should make circa £20m, got £25m cash (before paying this drummed up fine) so on a pe of 2.5x. I bought more at 80p and will get all I can afford now. Selling some other stuff to buy this, its looking very cheap now. Don't you just love AIM!?

[imjustdandy] 03/8/2018 10:37

Sitting duck

[imjustdandy] 03/8/2018 10:34

Vastly oversold now

[schway] 03/8/2018 08:30

Looks like a fishing expedition by the UKGC. Put up or shut up.

[pireric] 02/8/2018 19:10

Id be surprised if the fine exceeded £8m or so. That said, RGD is the killer if it gets boosted. A 5% rise would cut Edison's forward EBITDA forecasts by 27% they say. Talk about maybe a 10% rise in RGD...

[molatovkid] 02/8/2018 15:01

On the other hand....when the penalty is known, this might look cheap.

[someuwin] 02/8/2018 07:54

Looks bad...

"Gambling Commission Notice

The Company notes that a subsidiary of the Company (the "Licensee") has received notice (the "Notice") from the Gambling Commission of Great Britain (the "UKGC") of its intention to require the Licensee to pay a significant financial penalty following a review of the manner in which the Licensee has historically carried on its licensed activities."

[pireric] 04/6/2018 08:53

STR has been hammered because their underlying performance even before RGD has fallen well short of market expectations

I do wonder if the competition regulators might want to clear any deal of that magnitude first given the market shares in the bingo mkt

[czar] 04/6/2018 08:13

Surely the increase in RGD applies to all gaming stocks but only STR has been hammered. I notice that eps picks up to 22p on the broker note in a couple of years. I'm not sure what is going on but I think the sell off is overdone and the scaremongering about tax and regulation is overdone in the case of STR. The platform must be worth more than the current share price and Jackpotjoy or someone must see this as a cheap acquisition at well over £2 to get their hands on their platform and a big customer base. I'm sticking with it and buying more at these levels.

[pireric] 04/6/2018 07:04

The issue is that really we could be looking at EPS of maybe 10.5p as that RGD increase has already been signalled. So this is still on a PER of 14x

[czar] 04/6/2018 06:48

Stride Gaming: H118 – relatively stronger

Stride has reported a solid start to H1, with revenue up 14% to £44.9m and EBITDA down 1% to £8.7m (largely RGD on bonuses, which increased tax by 19%); capex of £1.4m led to strong underlying business FCF of £7.3m. Net cash stood at £19.7m (excluding player liabilities), with a post period boost of £4.2m due to the sale of its minority stake in QSB (YoBingo.es) to Rank.

Elements of the detail are more instructive than the group performance:

Own platform revenue grew by 25% to £29.7m (66% mix), materially outperforming the market though in part boosted by internal migration (third party platform revenue -2%)
Mobile mix grew by 10ppts to 68%, implying continued weakness in desktop (though triangulating 17% mobile growth and 10ppts real money mix change is challenging)
The Aspers JV generated over £2m revenue having traded for most of the 6m period, suggesting the first strong online start for a UK landbased casino business to our knowledge, and validating (albeit early days) the differentiated JV approach
A head of international has been appointed, with a mixture of licences, B2B, JVs and M&A likely to drive growth and diversification, in our view (which also raises questions on why selling the minority in QSB was better than buying it)

Stride has weathered the initial disruption of RGD bonus increases relatively well and appears to be taking UK share where it matters (proprietary platform, strategic partnerships). The group is understandably cautious about the further increase in RGD (likely 5ppts in our view) and recognises that this is likely to cause further disruption. The extent to which Stride can net benefit from this largely depends upon whether its clear operational progress can be converted into genuine strategic gains, in our view: continued proprietary market share growth; developing B2B into a meaningful business unit, and adding at least one material additional jurisdiction (always a challenge when the UK is the base as it is by far the biggest visible online gaming market).

NB The criticism of Jackpotjoy is they don't own their platform, Stride do own theirs.

[pireric] 26/5/2018 13:23

Edison down to 14p EPS...

"Our estimates do not factor in a potential increase in remote gaming duty (RGD); a 5% increase would reduce EBITDA by c 27%."

[czar] 25/5/2018 14:23

I reckon their business is solid just being hit by extra tax and regulation. The whole sector is also being hit but the market seems to have singled out Stride. I am convinced they will get taken out, they own their own platform and continue to grow revenue well.

[brownie69] 24/5/2018 12:10

Disappointing results. Below expectation.

UK sector under attack from the government and regulator.

No enough free cash to do deals that are game changers.

Needs to become a growth story and to execute on that.

[eastbourne1982] 24/5/2018 10:45

With regards to cash generation, I'm not convinced it's as good as it looks, the net cash position doesn't move much despite the apparently fantastic cash generation whilst the company is barely paying a dividend.

Something doesn't look right here.

[pireric] 23/5/2018 22:15

Cash pile is flattered. Need to take out the 9.5m£ of deferred consid paid post balance sheet end. In reality, their net current assets minus non-current borrowings is only around £2m, so not really a big net cash pile in my eyes at all.

Also, today's results were much worse than even commissioned research house Edison were expecting...

"However, we have lowered our total FY18 and FY19 EBITDA forecasts by 16.6% and 28.7% to reflect increased costs associated with regulatory compliance and international expansion. The stock has fallen 18% year to date and trades at 8.3x EV/EBITDA and 13.4x P/E for CY18e."

P/E not massively cheap either. very much in line with some of its other peers

[johnwise] 23/5/2018 12:18

To uncertain of future legislation on the gambling industry from an anti-business government who have already taken out thousands of jobs from their attack on Diesel cars..

"Stride's progress in the Period has been achieved against a background of increased regulation and taxation. The Group has had to manage and mitigate the new POCT applied to free bets, which has reduced EBITDA by GBP1.7 million, as well as other external challenges such as the introduction of GDPR and heightened industry-wide regulation in the UK. "

"The fiscal environment that UK-facing online gaming operators now work within has changed and is set to change further.
The Government's triennial review, published on 17 May 2018 included a commitment to further increase Remote Gaming Duty in the UK,"