Xlmedia Share Discussion Threads

[xlmania] 27/11/2018 21:25

#sellwhenOrybuys

[oneillshaun] 27/11/2018 16:00

Fozzie - this recent hit is pretty nasty and unexpected, I am pretty sure Ory and the team are working hard to turn the ship around from the profit warning

[fozzie] 27/11/2018 15:06

I think we have been hit hard Shaun, 220 to 80!. Thought we wre getting away at 105 last week but back down with a bump again. Always been awful at PR so i am not surprised. We need good figures and soon.

[oneillshaun] 27/11/2018 15:02

sorry New Depositing Players

[cg8riverside] 27/11/2018 14:35

Net Depositing Players?

[oneillshaun] 27/11/2018 13:14

pshevlin - busy times, xmas is coming so much work to do. My only take is that both Raketech and Catena have been talking about big NDP increases so i think the market expects XL to come up with the big number if not we could get hit hard.

[ponyten] 27/11/2018 13:06

Most certainly so. I have nothing of any value to add though, so keeping quiet! Very frustrating times at present.

[pshevlin] 27/11/2018 12:52

This used to be a lively board. Is anyone still invested?

[pshevlin] 27/11/2018 08:39

Anyone know when we are due an update on figures here. It's the only way we will get upward movement (apart from a good aquisition).

[oneillshaun] 22/11/2018 10:17

Catena Media BUY note from Danske Bank:

Company: Catena Media
Recommendation: Buy
Target Price: SEK153
Conclusion:
We attended the Catena Media CMD today, which was an event to both educate and elaborate on Catena’s business and strategy ahead. Although no new financial targets were presented, there is in particular one data point we highlight from today’s management presentation; US market liberalization of the online gambling sector. In our view, the equation is pretty simple; as more states open up, more B2C entrants make their way into the market which creates more competition, making Catena’s affiliate services more sought after. The US act as an affirmative trigger for our positive bias towards Catena as we are convinced that due to its first-mover advantage (similar to sector peer, Kambi) Catena will continue to take market shares as states eventually regulate. From a valuation point of view, shares continue to trade at a discount to the broader, Nordic peer group, although the gap have narrowed, and CTM is trading at 2020E EV/EBIT 10.5x versus a sector average of 11x.



The Facts:
Catena is a lead generator, and the business model can be somewhat tricky to grasp, but let’s just say that CTM is the hotels.com or booking.com of the online gambling sector. The CEO, Per Hellberg, initiated the management presentation by providing basics of the business model: 1) identify needs, 2) attract visitors, 3) promote, 4) lead and lastly earn money. Catena’s ambition is to become the one-stop shop for any player looking for comparison, tips, or specific knowledge before placing a real bet or spinning the wheel of fortune. Attracting players is done by building comparison sites and informative sites related to betting and gambling. Building the actual website is the ‘easy’ part of it, the challenge is to attract traffic and send these players to B2C-operators’ sites.

Overall strategy is focused on growing organic. In Catena’s case, growing organically implies advertising, land grabbing for increased market share (newly regulated markets tend to be benign for CTM as a number of competitors do not have the same compliance infrastructure in place), and Pay-per-click advertising (however expensive owed to significant interest for search words, thus much better for CTM to build own sites rather than paying Google).

More detailed, CTM organic growth strategic involves 1) on boarding of the player, 2) internal conversion by engage the player by placing an offer on the website which is engaging and meets the need of the player, and 3) the external conversion of the player by transferring it to the business partner, e.g. the B2C customer.

Catena’s focus will remain geographic expansion, implying expanding into more regulated and taxed markets. Nevertheless, we also noticed that management pencilled out other markets of interest, which includes more low risk ‘grey’ markets, which ultimately means markets lacking a clear-cut regulatory framework (e.g. Norway). As of Q3, CTM had 75% of revenues generated from locally regulated markets

As anticipated and communicated on the Q318 earnings conference call, the strategy for acquisitions is now ‘less is more’. CTM has done 34 acquisitions to date, and holds >1200 brands, which are more brands than what the company is in need for. The challenge with having a high pace of acquisitions, is the the increased debt which increases dilution, hence adverse impacts on EPS. CTM did 11 acquisitions in 2017, and is looking to close in c.10 by FY2018E. Conclusively, the focus on M&A is now refocused to entail 1) larger assets with cost synergies (rather than cost accretive) within existing verticals, and 2) strengthen existing internal products and services that can benefit Catena on longer term.
We believe it’s safe to say that acquiring, many and smaller affiliates provides challenges in terms of integration and compliance, which CTM is clearly looking to steer away from.

Going forward, Catena will also focus on new verticals, which will not be limited to online gambling, both on an industry and product level. The affiliate marketer sees itself as a lead generator, hence the core of business is applicable to a number of other industries, e.g. travel, insurance. The business model in its current shape is scalable, depending on the vertical, e.g. both casino and finance as verticals are relative generic across geographies, hence scalable. Sports on the other hand, must be localized in order to be value-add for the end-player, thus less scalable.

To sum up, Catena will manage profitability by
greater attention to fewer brands → efficient growth
Declining headcount increased ratio → lower cost increase
Reduce ratio of ‘other OPEX’ → lower cost increase
Strategic acquisitions focusing on larger assets with larger revenue base with identified cost synergies → profitability management
The primary focus is EPS growth rather than driving short-term EBITDA margins.

Regulation is an inevitable topic within the sector, and Catena highlighted a number of markets with changing regulatory landscapes. Any market that regulates, puts more compliance pressure on all participants, where Catena sees an advantage as they have a proper structure in place, underpinned by their current 75% regulated share of revenues.

US market and its’ state-by-state liberalization of online gambling was one of the more interesting topics. Catena entered the US market in 2016 already, through acquisition of an asset that had a run-rate of EUR1m per quarter. The second acquisition in 2017 (pokerscout.com), while third acquisition took place in March 2018, bonusseeker.com with a run-rate of EUR368k per quarter. Currently, Catena is live in Nevada and New Jersey where it is monetizing on its sites, while a number of other states are in a pre-monetizing level, i.e. Pennsylvania, West Virginia, New York, Illinois, and California. The pre-monetizing level are states where Catena has sites that are building traffic and search ranking positions in preparation for regulatory changes expected to take place within the next 2-3 years.

In New Jersey, Catena is generating revenue through real-money affiliation within sports and casino, while Nevada, characterized as a ‘poker state’, due to the vertical’s general decline, Catena is live with one operator.

As more states open up, more entrants make their way into the market which creates more competition, hence Catena’s affiliate business is highly sought after. In our view, the equation is pretty simple: more marketing means more lead generation, which is beneficial for Catena.

In all newly-launched markets, CTM operates with CPA (cost per acquisition) contracts instead of revenue share deals as markets are still in a growing and non-mature phase. Being on a CPA deal also provides downside protection from the volatility in sports book margin.
CPA range for sports in the US is half of that in New Jersey (USD700-1200 for casino). Sports betting CPA are lower due to 1) volatility in sports book margins (e.g. sports revenues in October month declined in fact 30% m/m), and 2) the seasonality in sports (which we do not have in casino).

Although hopes for entire US to regulate are prevailing current market sentiment, we highlight that this is a scenario that most likely never will take place due to political and religious resistance towards gambling. Thus the risks are multiple and vary from one state to another, with the main being the nature and timing of the regulations, e.g. New Jersey took 9 months to become live, while Pennsylvania may take even longer.

[oneillshaun] 22/11/2018 09:42

Revenues rise and growth continues for Raketech


Revenues for Q3 2018 increased by 42.3 per cent to €7.0m (Q3 2017: €4.9m), with organic growth at 28.6 per cent (32.6 per cent). Adjusted EBITDA was up 45.2 per cent to €4.1m (€2.8m), corresponding to a margin of 58.7 per cent (57.1 per cent); adjusted operating profit was €3.7m (€2.6m), with a margin of 52.4 per cent (53.6 per cent).

Profit for the period amounted to €1.7m (€1.6m) and new depositing customers increased by 49.0 per cent to 26,837 (18,010). During Q3, interest-bearing liabilities of €15m were repaid to Ares Management and Raketech announced a new partnership with Sper to reinforce responsible affiliate marketing efforts in Sweden.

The earn-out conditions related to casino affiliate site Casinofeber.se were amended in September and the earn-out period extended until 2023. Management’s best estimate of the outstanding earn out liability amounts to €9m.

“Over the past couple of years, we have invested in building a scalable business model,” said Raketech’s CEO Michael Holmberg. “We have developed new technical platforms and data analysis tools, and we see it starting to pay off.

“With this foundation, we are not only well-equipped to grow our existing products in Raketech Core, but we are also in an excellent position to innovate and roll out new products from Raketech Lab (new innovative services built in-house or via partnerships).”;

[oneillshaun] 19/11/2018 14:55

#buywhenorybuys

[cheshire man] 19/11/2018 14:52

Very reassuring ponytem :-)

[ponyten] 19/11/2018 14:36

Always good to see directors buying. Another £90k or so for Ory 🙂

[boadicea] 14/11/2018 11:00

And another Swedbank holding note today.

They have been adding at least opportunistically if not aggressively.

[rivaldo] 14/11/2018 10:59

Swedbank are accelerating their buying - since Monday they've bought around another 2.6m shares and now have 18.27m, or 8.29%:

[oneillshaun] 14/11/2018 09:55

XLM has way less debt than Catena, i would rather hold XL and at these prices it is a giveaway...

[tomstone12] 13/11/2018 18:08

they have been holders for quite some time and are one of the leading funds in the Nordics. are also holders in Catena and I think understand XLM is much better value.

[superadams] 13/11/2018 16:55

Stakebuilding for Catena ??

[rivaldo] 13/11/2018 15:37

Two disclosure RNS's from Swedbank this afternoon, who've been buying up shares recently.

In March they had 5.23%, with 11.53m shares. They now have 7.09% with 15.62m shares, and have bought around 2m shares in the last 2-3 weeks.

[jl5006] 09/11/2018 18:58

But the round sum trades continue to be a problem. One then repeated like late today 30k. Then 30k again. No short disclosure rules - so anything goes. Nomad should be aware of this. This "?shorting" has been going on for weeks.

Time for AIM to come within the general rules (FTSE) - or all AIM investors can suffer if MMs trigger shorts and stop losses take effect.

MMs taking the proverbial with their spreads recently.

[oneillshaun] 07/11/2018 07:52

Carl_Investor is this your site?

[ih_691806] 06/11/2018 19:49

Thanks for sharing! The most important part of the presentation was the US potential. Find more info about the US expansion in 2019 at hxxps://casino-bonus.com/catena-media-stock-analysis-november-2018/