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Entain reported largely in-line Q3 23 trading numbers, accompanied by an implied FY23 EBITDA downgrade. The latter was a result of unfavourable sports results as well as persistent regulatory headwinds. However, the bigger news was the update provided on the firm’s strategy and longer-term targets. While this means the near-term growth and margin trajectory will be slower than previously anticipated, the longer-term targets offer strong upside potential considering the currently-beaten-down valu
Companies: Entain PLC
Entain exceeded estimates in 1H23 (revenue +2.8%, EBITDA +0.4%), driven by BetMGM’s US performance. Pro-forma revenue reached £2.38bn, up 8% including the US share, with retail compensating for soft online growth. BetMGM’s positive H1 showing with revenue up 55% to $944m, underlines its strong position in the US market. FY23 Group EBITDA is expected to come in at £1bn-£1.05bn. Regulatory challenges impacted ex-US markets, while a £585mn provision for the HMRC investigation settlement surprised t
Entain’s Q1 23 revenue was up 15% YoY, with double-digit reported growth in both the online and retail channels. US JV BetMGM registered 76% growth, putting it on course comfortably to achieve its FY23 guidance.
The previously-flagged headwinds in the UK (affordability) and Germany (regulatory challenges) weighed on online growth (+1% pro-forma vs +6% ex-UK and Germany). We do not expect any significant changes to our estimates, given our above-guidance BetMGM estimates as well as the mostly in
Entain reported estimate-beating FY22 earnings. Net gaming revenue (NGR) increased by 12% in the year, driven by a 66% rise in retail. BetMGM performed strongly and is expected to be EBITDA positive in H2 2023. Entain completed five transactions during the year, further diversifying its revenue base. Underlying EBITDA was up 13%, and adjusted diluted EPS up 15%.
However, the guidance was softer than expected and should result in a low single-digit cut to our FY23 estimates.
Entain reported Q4/FY22 growth in line with estimates. Importantly, the online segment returned to growth, after four consecutive quarters of decline. The firm now expects FY22 EBITDA to come in at £985–995m (5%/3% ahead of consensus/AV, respectively).
BetMGM continued to outperform expectations and is on track for EBITDA break-even in H2 23.
We will be upgrading our estimates by low-to-mid single-digits to factor in the FY22 EBITDA upgrade as well as the stronger trajectory of BetMGM.
Entain reported soft Q3 2022 trading numbers as retail growth (+10%) offset the 2% decline in online with the former maintaining its growth momentum vs the pre-Covid level (+8% vs +6% in Q2). In the all-important US market, BetMGM continued to perform well, with revenue up 18% QoQ to over $400m.
Although the management maintained the FY22 EBITDA guidance at £925-975m, we will trim our estimates by mid-single digits to reflect the slower-than-expected momentum online.
Entain reported softer than expected H1 22 profit numbers even as BetMGM, on course for EBITDA break-even in 2023, continued to perform strongly.
In other positive developments, Entain re-initiated dividends and also announced the setting up of Entain CEE, the firm’s acquisition vehicle focused on Central and Eastern European markets.
FY22 EBITDA outlook of £925-975m is in line with consensus but ~3% below our estimates. Hence, we expect to trim our estimates marginally, largely on account of
Entain reported soft Q2/H1 22 trading as revenue was up 6/18%, respectively, in cc terms. The expected retail recovery (79/244% in Q2/H1) more than offset the decline in online (-8/-7% in Q2/H1), which faced multiple headwinds.
BetMGM maintained its number two position in the US with a 24% market share and same-state growth of >30%.
We will trim our FY22 estimates by high single digits to reflect both the soft Q2 as well as the downgraded online growth guidance.
Entain reported a strong start to FY22 with Q1 revenue up 34%, benefitting from a 10x increase in retail revenues as volumes reached within 5-10% of their pre-Covid levels. As expected, online growth (-6%cc) was hurt by the previously-flagged regulatory headwinds.
BetMGM continued to gain momentum with market share at 24%. The JV re-iterated its target of reaching positive EBITDA in 2023.
We will upgrade our FY22 estimates marginally, to reflect the stronger than expected retail recovery.
Entain reported a 5% rise in FY21 EBITDA, resulting in a 1.4% surprise. Importantly, retail operations in various regions were within 5% of pre-COVID-19 levels. BetMGM continued to gain share and expects revenue of $1.3bn in FY 22 (+53% yoy) with EBITDA breaking-even in 2023.
The board decided against a dividend, which was the only sore spot of the FY 21 performance.
We do not expect any significant changes to our estimates, following the largely in line showing (vs AV estimates).
Entain reported a largely in line Q4/FY 21 trading update, registering cc growth of 6/8% for Q4/FY21, respectively. As expected, online revenue was down 6% in Q4, while retail was up 62%. BetMGM performance was well ahead of consensus as well as our expectations.
Entain now expects FY21 EBITDA to come in between £875m and £885m (vs £850-900m previously). We will raise our BetMGM estimates as well as the valuation to factor in the strong US momentum.
Entain registered Q3 21 top-line growth of 6%, driven largely by online (10%). In the all-important US market, BetMGM surged ahead with a further expansion in market share of (23% in three months to August vs 22% in Q2 21).
FY21 EBITDA guidance of £850-900m was re-iterated, a positive given the recently announced headwinds from Dutch regulations.
We do not expect any significant change to our estimates, given that the performance was largely in line with our estimates.
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HeiQ has announced the acquisition of a site in Portugal where the company intends to build a HeiQ AeoniQ production facility with a 3,000 tonne per year capacity. To support the acquisition, the company intends to raise c£2.44m via an equity placing, supported by the issue of a c£1.7m (€1.97m) convertible loan note (largely to management) that will convert upon completion of the raise. We see this as an important step in the development programme for HeiQ AeoniQ. Additionally, HeiQ has provided
Companies: HeiQ PLC
Dunelm Group’s (DNLM’s) H124 results demonstrated the benefits of its strategy of broadening its addressable market by strengthening the core offer and expanding into newer categories, while also growing the store base and marketing more effectively. This is driving growth in the active customer base, who shop with greater frequency, leading to further market share gains in a static market. The broadening appeal of its products is demonstrated by growth being broad-based by geography, customer a
Companies: Dunelm Group plc
Companies: UTL ASC DNLM BWNG MONY DFS BOO
Nightcap has announced the acquisition of Piano Works, the late-night live music venue currently operating at a venue in Farringdon and also within Nightcap’s Barrio Covent Garden site. The headline acquisition cost is £200k, funded through a £1m equity placing at 6p per share. Based on the success of Piano Works residency within Barrio Covent Garden, there is the opportunity to roll the Piano Works concept to other venues in the Nightcap portfolio. The Company has also announced a trading updat
Companies: Nightcap PLC
The Great Correction of 2022 saw the share prices of streamers plunge after market leader Netflix reported a slowdown/fall in subscriber growth.
Having formerly been seduced by hectic subscriber growth rates, investors quickly refocused, this time on fundamental metrics such as revenue, margins, profits and cashflow.
Since then, streamers have continued to take a steadily greater share of viewing while linear TV continues to decline. But growth in streaming subscribers in the US and UK is now a
Companies: AMZN DIS WBD NFLX NFLX ITV STVG PARA AMZN DIS
Hardman & Co
On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div
Companies: PTAL GHH IGP MSLH PINE NXQ EQLS NXR AXL
The Hardman & Co Healthcare Index (HHI) has been running since 2009. Its main function is to highlight the attractions of life sciences investments over the long term. For the second year running, apart from global economic influences affecting world markets, performance in 2023 was dented by the capital-intensive nature of the sector. The HHI fell 3.7%, to 483.8, underperforming the main London markets – FTSE 100 (+3.8%) and FTSE All-Share (3.8%) but outperforming the FTSE AIM All-Share Index (
Companies: TXG NDVA TSVT BCOW Z29 TXG NCYT GNS SUN AMS OMG APH EKF EAH IMM AGL DEMG AGY TSTL IPO GDR ETX TRX HVO HVO CTEC AVO OXB DEST VLG IXI VAL ERGO INDV AGR AVCT BAI 123F IMCR BCOW
Companies: Cornerstone FS Plc
Halfords is a household name for its motoring and cycling products retail business, but the Group has a growing focus on high-margin services (i.e. autocentres) and is in the early stages of selling its technology platform globally to automotive service and repair companies.
Companies: Halfords Group Plc
This morning’s trading statement from ZOO confirms that production companies are taking longer than expected to complete projects. This follows the resumption of new production after the industry-wide strikes ended in November 2023. The anticipated January ramp-up has yet to fully materialise, with entertainment projects expected to complete in January now moving into February and beyond. However, ZOO has been notified by its largest customer of a pipeline of orders that provides good visibility
Companies: ZOO Digital Group plc
Progressive Equity Research
We are reiterating our Buy rating, $32.50 price target and raising our projections to reflect the announced acquisition of leading premium ($195+) denim player rag & bone by Guess? and a joint venture with leading brand licensor WHP Global. We view this acquisition, Guess?' first, as an accretive winner, offering multiple (and material) expansion opportunities which leverage Guess?' strong international presence, infrastructure, category expansion and licensing ability and position as a leading
Companies: PVH LULU URBN ROST AEO TPR AEO TJX GES ROST TPR LULU GES TJX PVH URBN
Small Cap Consumer Research LLC
Companies: JDW MAB MARS WTB FSTA BOWL CPG SSPG LGRS SSTY OTB HSW TMO GYM MEX
Rank’s trading update (13 weeks to 1 April) showed 17% growth in Digital, but the core Venues disappointed, with Mecca down 2% and Grosvenor down 9% on a like-for-like basis. The shortfall was largely due to fewer customer visits, as well as a lower gross win margin from VIPs. The company expects the weaker consumer environment to continue and has now guided to FY18 clean EBIT of £76-78m vs previous consensus of £83m. We have adjusted our forecasts to the lower end of guidance. The stock has dro
Companies: Rank Group Plc
ME Group has reported a strong set of H1 results with sales up +25%, adj. PBT +68%, adj. EPS +60% and ongoing DPS +14%. The strongest performances were in photobooths in Europe, which benefited from price rises and increased volumes, and laundry in the UK, where there was a +11% increase in the number of machines. This progress was achieved despite a near flat installed base in photobooths, with the anticipated roll-out of next generation photobooths delayed due to supply delays, and a steady in
Companies: ME Group International plc
Nightcap has acquired DC Bars Limited, the operator of the 10 Dirty Martini cocktail bars and Covent Garden located Tuttons Brasserie. To fund the £4.65m acquisition Nightcap has raised £5.0m through £2.65m of convertible debt and £2.35m new equity raised at 12.0p, a 26% premium to the prevailing share price. With high debt levels and expensive central overheads DC Bars had been unable to weather the tough hospitality trading conditions of late exacerbated by the ongoing rail strikes. The busine