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OPAP enjoyed good growth from its land-based activities, as well through the continued expansion of its online activities in FY23, and it surpassed its own profit expectations. Ongoing enhancements to OPAP’s offer, including the revitalisation of games, will support further growth in FY24.
OPAP Greek Organisation of Football Prognostics SA
OPAP’s Q323 results were negatively affected by industry-wide influences in sports betting, a tough comparative for Lotteries, and one-off natural events, which have led to a minor, c 3%, tweaking to management’s prior FY23 EBITDA guidance. From an operational perspective, the new iLottery platform is building awareness and growing revenue, and player activity increased on the OPAP Store app, while the retail offer continues to evolve.
OPAP reported softer-than-expected Q323 numbers as revenue declined by 3.6% YoY, with the weakness in lottery and betting being only partly offset by growth in VLTs and online casino. However, with many operators flagging similar weakness over the last few weeks, investors took the soft showing in their stride, sending the stock 3% higher following the announcement (at pixel time). Given our conservative approach to earnings ahead of this report, we expect a minor upgrade to our estimates.
OPAP’s management is successfully executing its strategy of growing the core brands and customer interactions online and offline, as evidenced by increasing online exposure and revitalising growth in its mature retail core activities, while maintaining its leading corporate and social responsibility (CSR) credentials. Its exclusive licences in the majority of its activities enable high levels of profitability, cash generation and shareholder returns. We see attractive upside to our DCF-based valuation of €17.9/share, with the added appeal of a prospective dividend yield of 10.7%.
OPAP exceeded Q2 23 estimates with a 12.7% revenue increase to €498.1m, driven by growth across all product categories and channels. H1 23 revenue rose by 14%. Adjusted EBITDA grew by 5.1% (Q2) and 8.9% (H1), while reducing financial expenses underpinned a 12.2% rise in net profit. The company declared an interim dividend of €1/share, meeting its annual commitment, and announced a €150m share buy-back programme. We will upgrade our estimates by mid-single-digits to reflect the strong update.
OPAP’s Q123 results demonstrated continued strong growth in revenue, helped by improvements to both the retail and online product offering, and profits, with the support of a more favourable macroeconomic background as inflation has declined. The ongoing rejuvenation of the gaming offer is leading to growing player engagement and frequency of use. Management’s unchanged guidance for FY23 looks well-supported. The valuation and dividend yield (9.1%) look attractive relative to the peers.
OPAP reported a strong start to 2023. Q1 23 revenue came in at €527.4m, up 15.4%, while the EBITDA margin came in at a strong 37.2%. While the top-line momentum was attributable to broad-based growth, margins (+30bps YoY expansion) benefitted from good opex control. Following the strong start to the year, we will upgrade our FY23 estimates by high-single digits. Hence, we re-iterate our positive stance on the stock.
OPAP’s FY22 results benefited from the ongoing retail recovery post COVID, and a still-growing contribution from online (despite the tough comparative) as the company’s enhanced offering attracts growing customer numbers. The higher-than-expected profit, despite relative disappointment about Q422’s revenue due to the FIFA World Cup, reinforces management’s cost control credentials against a background of higher external cost pressures. Management’s guidance for further profit growth in FY23 and an undergeared balance sheet should be supportive of high cash returns.
OPAP reported Q4/FY22 revenue of €540.9m/€1,939m, up 8.5%/26% YoY, respectively, led by growth in VLTs, online casino, and Instant & Passives. EBITDA came in at €202.7m/€736m, with margins (+330bps/+220bps for Q4/FY, respectively) benefiting from good cost control. The firm announced total shareholder returns of €1.45/share, with €1/share in dividends and €0.45/share as a special dividend. We will upgrade our estimates, largely due to the stronger than expected margins and re-iterate our positive stance on the stock.
OPAP’s Q3 performance was ahead of market expectations. Revenue of €498.8m (+2.0% vs consensus) was up 6.1%, with the flattish showing in retail more than offset by ~29% growth online. Operational leverage and good cost control resulted in a 240bps EBITDA margin expansion. Management expects a strong finish to FY22, guiding for EBITDA of €720m (vs €700m earlier). We will trim our top-line estimates, but upgrade our margin estimates. Hence, we re-iterate our positive stance on the stock.
OPAP’s strategy of greater product innovation, and the resilience of retail revenue despite increased pressures on consumer spending, drove solid revenue growth in Q322. Ongoing cost control led to an impressive improvement in profitability, enabling management to increase its FY22 EBITDA guidance back towards prior guidance from the start of the year (€720m). Despite the relatively strong share price performance in the last 12 months, the prospective FY23 P/E multiple of 10.9x is a 15% discount to its peers, and the dividend yield of 9.2% remains very attractive.
OPAP’s Q222 results highlighted a continued strong recovery in revenue, profitability, helped by cost containment, and cash generation following the disruption caused by COVID-19-related lockdowns and restrictions. The growth was driven by its land-based activities (easier comparative), while its online revenues normalised (tougher comparative). A more cautious macroeconomic outlook led management to trim its FY22 EBITDA guidance by 4%. The company’s strong financial position means it is well placed to fund its attractive dividend profile.
OPAP reported mixed Q2 22 numbers, missing top-line estimates, but beating on the bottom line, thanks to good cost control – a big positive given the inflationary market environment. Growth was attributable to the VLT (+106.4%) and retail recovery (+10.2%), which was partially offset by the expected broad-based decline in online revenue. Though the top-line miss suggests otherwise, the economic resilience of lottery makes OPAP an unlikely defensive play. We re-iterate our positive stance on the stock.
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