Xlmedia Share Discussion Threads

[km85] 07/10/2019 11:29

The Montana Lottery released draft rules to govern sports betting Friday, with the draft now subject to a 30-day public consultation period.
Publication of the draft rules comes five months after Montana Governor Steve Bullock signed legislation to legalise retail and online sports betting under the authority of the Montana Lottery.

[km85] 07/10/2019 07:18

Almost 300k shares bought by Ory. He is not finished yet, I think.

[km85] 06/10/2019 19:18

Also, according to his LinkedIn profile, most of his roles as a leader is scaling up business, acquisitions, and returning businesses to grow through financial metrics and internal Developments. Also two companies he used to manage as a ceo, were sold or acquired by bigger companies.

[km85] 06/10/2019 19:10

He seems to be good leader. But also I realised that most of his previous leadership position periods, apart from his own businesses, between 1 to 2 years. Prior to his new position, he was a CEO for a year! Let us hope he adds good value to the shareholders of XLM.

[seans66] 04/10/2019 18:26

Check out stuart's recommendations on linkedin - pretty impressive. Seems we have a great new CEO! Let's give him at least 6-12 months to see what he can achieve.

[wasteof] 04/10/2019 16:04

KM85,

Many thanks for a most helpful update.

ATB,
wasteof

[wasteof] 04/10/2019 16:04

KM85,

Many thanks for a most helpful update.

ATB,
wasteof

[km85] 04/10/2019 11:26

Indiana became the seventh state to go legal with mobile sports betting this week, and analysts are already predicting that it will generate significant returns in the region of $400m in revenue on $6bn handle per year.

Dustin Gouker, lead analyst at PlayIndiana.com, believes that Indiana, which is close to Chicago, could achieve those figures if neighboring states such as Kentucky and Ohio remain inactive on sports wagering.

“Indiana’;s close proximity to Chicago, as well as other relatively large markets such as Cincinnati and Louisville, should help the state punch above its weight class,” he said. “As long as Indiana’s neighbors continue to prohibit sports betting, the state should expect huge flows of drive-in traffic.”

Gouker also noted that Indiana bears close resemblance to New Jersey, where the New York City market sits just across its border, positioning the Garden State in a tight race with Nevada. “If everything goes right for Indiana, it could see remarkable growth, as was the case in New Jersey,” he said.

The net result for Indiana’s state budget, when applying a tax rate of 9.5% on $400m gross revenue, would be $38m flowing into its coffers.

Referencing Indiana’s 9.5% rate versus the comparatively high 36% applied in Pennsylvania, fellow analyst Kim Yuhl said: “Indiana has set itself up as one of the most operator-friendly legal sports betting markets in the country. That balance should help both sportsbook operators and the state realize their revenue potential.”

DraftKings was typically quick on the ball to announce the debut of its own mobile and online sportsbook for Indiana sports fans. Following momentum from the firm’s expansion in New Jersey and West Virginia, Indiana marks the third state to gain access to its digital sportsbook product.

“DraftKings could not be more thrilled to expand our national reach as states continue to open the market for legalized sports betting,” said Matt Kalish, Co-Founder and Chief Revenue Officer. “Since our sportsbook product launched in 2018, we have made it our number one priority to provide sports fans with a responsible place to wager on a superior and technologically advanced sports-betting platform.

“With Indiana becoming the latest state to offer legalized online and mobile sports betting, we are excited to provide the top-rated sportsbook app to some of the nation’s most passionate and dedicated sports fans

[sophia1982] 04/10/2019 10:20

I have spent a huge amount of time on this company and this is my humble take:

1. I think that the most important factor which explains such a difficult year is regulation in Sweden.

hxxps://www.igamingbusiness.com/news/sweden-consider-igaming-advertising-ban

hxxps://www.gamingintelligence.com/marketing/52837-swedish-consumer-agency-finds-fault-with-gambling-advertising

We will have to wait until 2020 to have more clarity and I wish the management was just more open in discussing these issues which are very public at least in Sweden.

2. Doing a tender offer when it is possible or even likely that you have to issue a profit warning is irresponsible. XLM should ask themselves if they were correctly advised by Cenkos and Berenberg.

3. Can Stuart Simms be a good choice for XLM? Looking at the background and CV, it looks so. Take a look at this video to have a feel:

Does anyone here have any view on this, based on personal knowledge?

At this point in time, XLM is one of the cheapest stocks in the UK and I am long, but we need to push the management to do the right things.

[scubadiverr] 03/10/2019 18:52

Held up better than I expected. Had thought about selling on the bell and buying back. Glad I didn't

[hatfullofsky] 03/10/2019 11:41

Ex Divi today - hence the drop (well that and Brexit and Trump)

[km85] 02/10/2019 16:55

Those sorts of acquisitions making it harder for small to medium operators. They can’t compete with big operators. They all fight for clients acquisitions and all willing to pay higher CPA, rev shares or big budgets for ads and sponsorships to get clients in first and retain them. Always good for affiliates, more operators brings in more affiliates and more affiliates brings in more operators. Small and medium operators rely mainly on affiliates traffic to operate.

[scubadiverr] 02/10/2019 12:44

Paddy power and Betfair use the services of xlm. Stars don't. Any contract in place may increase the value to xlm due to the already contracted group becoming enlarged.

[yump] 02/10/2019 09:24

Filling up the thread with more words - why ?

[km85] 02/10/2019 09:03

Paddy Power and Betfair owner Flutter (FLTR.L) has announced plans to merge with Canadian rival The Stars Group, saying the deal would create the world’s biggest online betting and gaming firm.

The company, previously known as Paddy Power Betfair, said the new group will be based in Dublin, listing on the London Stock Exchange with a secondary listing on Euronext Dublin.

Shares in Flutter surged on the news, up 13.7% at around 8.35am in London.

Paddy Power and Betfair owner Flutter Entertainment has agreed a deal to buy Canadian rival The Stars Group to create the world’s largest online betting firm with combined annual revenues of £3.8 billion.

Flutter – previously called Paddy Power Betfair – said the merged group will be headquartered in Dublin and listed on the London Stock Exchange as well as on Euronext Dublin.

Flutter shareholders will only around 54.6% of the new company, while The Stars Group’s shareholders will own the rest.

It said the two groups’ combined revenue would have been £3.8bn in 2018, larger than any other gambling and gaming company worldwide.


Flutter said the move would help the new group “maximise profitable growth” in its core markets of the UK, Ireland and Australia, as well as gaining ground in Spain, Italy, Germany and dozens of other countries.

It added that the merger could save £140m a year through “pre-tax cost synergies,” as well as lowering finance costs and reducing Flutter’s debts.

Flutter’s current chair and CEO will take up the same roles at the combined group, with The Star Group’s executive chair becoming deputy chair and its CEO becoming its chief operating officer.

Gary McGann, chair of Flutter, said: "This is an exciting and transformational combination that will bring together two strong, complementary businesses to create a global leader in the fast-growing online sports betting and gaming industry.”

[yump] 01/10/2019 14:44

If it needs that many words to explain why xlm is a good investment, then it can’t be.

It was a straightforward strategy up to the point where it went for the financial market (I sold then) - missed some profit - but everything since has proved the point. You’re having to look for intricate reasons when it should be simple.

Which may well give you the feeling that you’ve got something nobody else ‘gets’. Good luck with that approach.

[stun180] 01/10/2019 12:52

I think XLM could learn from GAN on the pr front !

[km85] 01/10/2019 11:15

US sports betting pushes revenue up at GAN in Q3
1 October 2019
Online betting and gaming technology provider GAN has said that stronger-than-expected demand for its sports betting services in the US helped to drive gross operator revenue up 202.7% year-on-year during the third quarter.

For the three months to September 30, 2019, gross operator revenue amounted to $80.9m (£65.8m/€;74.3m) according to an initial trading update released by GAN. This is significantly up on $26.7m in Q3 of last year and $54.8m in Q2 of this year.

Gross operator revenue comprises the sum of revenue from GAN’s Simulated Gaming business, as well as gross gaming revenue from real money regulated gaming and gross sports win from real money regulated sports betting.

Although GAN did not publish full figures for each area of its business, it did note that the increase in gross operator revenue was driven by strong growth in real money regulated gambling in the US

[tomstone12] 01/10/2019 08:35

KM85 SOLID .. good job pointing out what so many seem to be missing.

[km85] 30/9/2019 17:59

When Xlm decided to stop all media activity and refocus on the Publishing verticals back in tate end Feb 2019, I was so happy to hear that sort of news, even though the stock crashed by 30% or so but I was super happy. I even bought aggressively from that point.

I highly recommend to prints all the RNSs and go through them again from time to time, That is what I do, it helps me lots to understand more about the company, its management and the decisions of management. By doing that you would be less exposed to the stock market movement. Also By doing this you would consider some investment choices like Buying/or selling or do nothing. You will also knew in advance, maybe before the market, that the Media business is waste of time. If you read or reread RNS number 2001W, you would understand what I am talking about. Let me quote what they said on 7 Feb 2017:

 
XLMedia (AIM: XLM), a leading provider of digital performance marketing, is pleased to announce the acquisition of ClicksMob Inc ("ClicksMob"), a mobile performance marketing platform.
 
XLMedia, via Dau-Up, the Group's mobile marketing subsidiary, has signed a definitive agreement to acquire all business and assets of ClicksMob for a total consideration of $5.1 million, payable in cash. The acquisition is expected to complete during the first quarter of 2017 and is expected to be earnings accretive in the current financial year.  ClicksMob generated unaudited revenues of $16.3 million and profit before tax (excluding share based payments) of $0.3 million for year ended 31 December 2016.
 

This business had profit before tax margin of 2% too low, Yes it grew in sales after that period, but trust me the growth is non profitable at all. The return on that investment is also low like 6%. That is why I was really happy because I knew from before that is not attractive business at all. When The company announced that the sales will drop by 30M dollar but the profit will drop just little I was also sure that is true news and that was the case. Just look at the above number again you get the point. They also owned other media business too.
The decision of refocusing on the core business is a winning decision moving forward. But let me add more quote from the company so we can all learn something important.

If you read, or reread, RNS 9006U issued on 24/01/2017 when the announced the trading update:

XLMedia (AIM: XLM), a leading provider of digital performance marketing services, today announces a trading update for the year ended 31 December 2016.
 
XLMedia continued its strong performance in 2016, with revenues up 15% to $103 million (2015: $89.2 million) and adjusted EBITDA1 up 21% to at least $34.5 million (2015: $28.4 million).
 
Strong organic growth in the Group's publishing business, predominantly in English speaking markets and other non-Scandinavian European markets helped to increase Group revenue in FY16.


From the above note, We can see that in 2016 the company sale was 103M dollar and with EBITDA is UP 21% to reach 34.5m Dollar. Let us compare it to this year expectation, 80m dollar of sales, less that 2016 but the same EBITDA amount even XLM in 2016 claimed that the publishing business grew organically from publishing market in English speaking countries and non Nordic but European market. Here I can tell two important things that media business brought a big portion of sales but not added profit value in the business, the other important note is the company Publishing sites in Nordic countries were not growing organically back in 2016. Already covered the nordic countries few days ago but again XLM is the biggest and Oldest affiliates in Nordic market, so grow slowed down organically but they bought 15M euro last year worth of sites in Finland. In my opinion they will still bring lots of sales from Nordic market but not like previously in their heydays. But at the same token they can focus on more stable verticals like spot betting and finance both in the US, and other countries too.




The other good thing they did is to expand in the personal finance in the US markets, I already highlight some of that advantages of personal finance few days ago.



I think You should ignore or adjust the big sales XLM generated from the previous years and focus on the profit quality generated of its assets. Those assets, in my view, worth more than what the paper of the balance sheet shows.

I also think now the company focusing more on its assets, it can run more efficiently through developing rich and quality sites, rich contents and they can be flexible and have more acquisitions pipelines and options in different markets and verticals.


If you check Better collective H1 report, You would noticed that it brought 31M Euro in sales, even though their sales grew so high but still less than XLM after currency conversion, Better Collective EBITDA is 13m euro whereas XLM EBITDA is 18.6m dollar, XLm margin is higher than its peers. both XLM and Better have more or less similar total assets But XLM has more in total equity. XLM has stronger balance sheet, much less debts than its peers. But, maybe because Better collective is listed in Stockholm, its market caps is higher than XLM by 2.5 times.

I am not saying XlM should be valued at 450M pounds TODAY, as it used to be, but at the same token it is unfair to value it at 115M pounds today too.


If XLM was a private company and I am the only owner, I would not panic if someone offered me 115M pounds or 90M to buy my Xl Media. I would just smile politely and tell the potential buyer to F off. Instead I would think how can this business generate me more cash, where I could launch new websites with new products?, what is the potential of US market and how much money can I make from? How much money do I need to acquire some good websites? Will the new regulated market would offset my decline sales in other markets? If not then what is my alternative? Can I buy smaller affiliates in the less volatile regulation environments? And many more questions alike.



imo, If you can not imagine the above and go through analysis, then XLM is just not for you, or simply you just speculate. You should know the business very well and keep imagine that you own the overall business rather than focus too much on the stock price.

[km85] 30/9/2019 15:22

For some reasons, posts number 9981 and 9982 are only showing when you log in.

[km85] 30/9/2019 15:20

Xlm did crazy bad decisions when the company entered the media business mainly mobile apps side. If you have a good business that prints you money and can print you way more money if you take care of this printer, maintain it, and even better buy more alike printers. This printer is the publish business. The company during 2015-2018 was focusing on media and mobile app business that generally speaking produces low margins and requires capital and human sources. During that time competitors, like Catena and Better Collective were/still actively buying publishing sites mainly in sport betting and casinos. Those two companies made it clear to their shareholders from beginning, we are NOT going to pay dividends because we are growing businesses and we may start paying off some in 2020, again may or may not.

To summarise, I think XLM did irrational decision, moving to media that is less profitable instead of focusing their efforts, capital and human source on the publishing sites. Unfortunately It costs the business money, not to mention the opportunity cost we lost if the company deployed the capital in the right way.

From the above reason, I think the subsidiary CEO left the business, or the board decided to replace here. From previous shareholders meeting, she was always excited and talked about the media thing. It is also unfair to only blame her, the board also including Ory should be blamed too. Ory is very smart guy and he admitted that CEO role is not for him and he asked the board to find someone better and in more details than him who also can manages the business day to day, involves in acquisitions and scaling up through in house KNOW-HOW.

I am not sure if that is enough reason for him to leave off. Or if he is telling the full story, but I would not care much. All I care if the new CEO can do rational decision that creates value for long term shareholders.

The other irrational decisions, at least in my view, is the company has been paying dividends from the IPO. It just makes no sense to me that a growing and profitable business with HUGE return on incremental capital (more than 25%) to pay off half of its earning. They should had retained each dollar they generated and spent it on acquisitions and/or building sites. You might think this is a small mistake, but it is a huge mistake, in my opinion. If the company retained those 60M dollar worth of dividends and over time invested in acquisitions and/or building sites, the company would not now face a decline in sales and earning, regardless of the regulations headwind. Or at least it could now had huge pile of cash to buy back half of its shares at cheap price.

Let me illustrate the last point , if a company generates high return on incremental invested capital Like XLM more than 25%. That means for each dollar the company retained and reinvest it generated 25c incremental profit from that dollar.
For the above two reasons, I think xlm revenues and earnings declined last year and this H1, But rivals results like Better collective and Catena business grew in the last two years.


XlM did also some good decisions and I, personally, still believe it is better than its peers But XLM learned it the hard way. Will post more on the positive side of XLM.


This above is My own analysis, I might be wrong. Please do your homework!

[sophia1982] 30/9/2019 11:44

Many thanks KM85 for your notes.
I am long XLM and because of that I want to be extra cautious...
A few questions for those who spend time analysing companies in detail:

1. In the 1H19 webcast Ory is reading and speaking very quickly, very different from the tone used in other presentations where he would speak more clearly and sound quite persuasive. Was he the same during the meeting which KM attended?

2. I really disliked the profit warning for one main reason. The company had reiterated twice that the business was going fine not long ago which pushed people like me to not tender any share at 80p. Should they not be working with their advisors to re-establish a relationship of trust and transparent communications with the market?

3. Does anybody have a direct knowledge of the Swedish market? How should we take the initiatives of Minister Shekarabi and the potential scenarios of the results of the Commission on Gambling?
Find here another recent comment on the current environment:
hxxps://gamblingcompliance.com/premium-content/insights_analysis/investors-avoid-floundering-swedish-affiliates
This is a very important part of XLM's business and so we should try to understand if it is true that Sweden (and the UK) are in the long term "solid environments to work in" (Ory).

In spite of difficulties, XLM trades at a huge discount to similar companies. Just google Raketech Nordea and you can download a recent piece of research with all comparatives and XLM is the cheapest of all.

Thank you.