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2023 revenue is expected to be in line with expectations. Adjusted EBITDA loss is expected to be higher than we expected.
B90 Holdings plc
H1 was a period of investment and restructuring that has positioned the company for strong future growth. B90 recorded an extraordinary loss of €0.8m, whilst it fully replaced its management team, but by the end of the half the company returned to investment, from which it expects to begin benefiting in the current quarter. Moreover, the company has embarked on an ambitious buy-and-build strategy that takes advantage of attractive opportunities in the fragmented online gaming sector. B90 raised €6.6m and is successfully executing on its first acquisition in line with its new strategy, discussed in detail in our 15 September initiation. We believe B90’s new management team will leverage its proven expertise and networks to more than triple revenues over the next two years.
B90 operates online gaming sites and manages sites and services that provide leads and customers to other online gaming operators. The company adapts this hybrid strategy for mature and emerging markets to optimise costs and returns. The company is led by a proven management team and is sourcing accretive acquisitions to consolidate the fragmented online gaming sector. Our DCF analysis points to a valuation of 8.8p per share, indicating c. 53% potential upside.
Upping the Ante
Interims shows revenue +40% YoY to €8.9m (€6.4m), EBITDA +5% YoY to €4m, as higher marketing costs +60% to €2.8m (€1.8m) and higher admin costs muted profit growth. Cash at half year was €1.0m, which improved slightly to €1.2m as at 21 Sept and a further €0.3m expected from Altair for September. Receivables at 21 Sept was €10.7m, small improvement since half year at €11.5m. On track to launch own regulated financial brand in the 4Q18. Renegotiating payment terms in marketing vertical from 90days to 45days which should help lower receivables and improve cash position, await for further news on this.
VLTY announces that it has extended its marketing contract with Betsson (sports & casino) for a further three years to May 2021. Management reference that progress is being made with receivables, and on track to launch own regulated financial trading brand in the 4Q18. Cash has improved since July to currently €1.3m a further c. €0.65m expected before the end of August, management expects to take cash to c. €1.8m at the end of August.
Revenue in the 1H18 is in line with management expectations, with revenues from marketing activities in online financial trading ahead of expectations. Bet90 continues to achieve good growth and the Board is looking to accelerate investment in marketing Bet90, including the rollout into the South American market. The result is increased costs in the 1H18 where EBITDA is expected to be marginally below budget in the 1H18. Cash as at the end of June 2018 was €1m.
Betsson AB (BETSB SS; NR) today released its interim results for the 1H18 to June 2018, which shows an improving business. As with GVC yesterday, Betsson benefitted from the Football WC18, which contributed 3.7% to total revenues in the 2Q18. Casino revenue was +16% to SEK1,017m in the 2Q18 and Sportsbook revenue was +17% to SEK300m in the 2Q18. Active customers were +26% to 692,431 and customer deposits were +15% during the 2Q18. The increase has mainly been attributed to activity during the WC18.
We reassess our forecasts below, no significant changes to the P&L and the company produced a strong start to FY18e where revenue in the 1Q18 was +60% YoY to €4.8m, maiden dividend of 0.25p proposed. AGM in July should provide detail on timing of dividend.
FY17a was another year of strong growth for VLTY, revenue +165% YoY (+12% on FY17e) at €16.2m and EBITDA was +260% YoY, marginally ahead of forecasts at €8.1m. Although cash was below expectations at €0.7m, post the year-end the group reduced receivables significantly and restructured banking relationships, as a result the cash position as at 28 May 2018 improved significantly to €1.6m. Finally, the Board proposed a maiden dividend of 0.25p and intends to adopt a progressive dividend policy.
Veltyco has agreed to acquire Marsovia Holding Ltd, which owns a database of 43,500 online financial trading customers, for a consideration of €4m, offset against an outstanding loan and receivable owed to VLTY by Altair Entertainment, so the deal is cash neutral for VLTY. Favourable user acquisition cost of €92 (€154 per active), where the average customer acquisition cost in financial trading (FX/CFDs) is c. €665. Implies a quick payback and a high ROI.
Veltyco this morning confirms, in response to recent announcements from the FCA and ESMA, that none of the operators for whom Veltyco undertakes marketing activities offer a binary options product.
Veltyco enhances its Board on the back of significant growth of the business, which includes the appointment of Ms Melissa Blau as CEO and Mr Rainer Lauffs as COO.
Veltyco this morning announced that its partner eSports.com has entered into a partnership agreement with RFRSH entertainment, a company which runs the commercial operations for some of the leading esports teams, including Astralis. eSports.com will be the main sponsor for Astralis.
Veltyco Group this morning announced that it has extended its relationship with eSports.com, a fast growing eSports community portal targeting a significant global audience. The partnership will take the form of a 50/50 JV between Veltyco and eSports.com AG, the parent company of eSports.com. Both parties will provide equal funding to the project.
Although the macro scenario is still positive, more than 40% of LNGC projects under construction is behind schedule or slowing down, which has reduced GTT’s expected orders from 52 to 37 by 2022. As a reminder, LNG carriers remain GTT’s main activity, contributing 83% to sales in 2017.
VELTYCO GROUP (VLTY.L) | NQ MINERALS (NQMI.PL) | ALEXANDER MINING (AXM.L)
B90 AXM NQMLF
VELTYCO GROUP (VLTY.L) | GCM RESOURCES (GCM.L) | FEEDBACK (FDBK.L) | SUNRISE RESOURCES (SRES.L)
B90 GCM FDBK SRES
VELTYCO GROUP (VLTY.L) | KERAS RESOURCES (KRS.L)
B90 Holdings plc Keras Resources Plc
VELTYCO GROUP (VLTY.L) | PREMIER AFRICAN MINERALS (PREM.L) | SALVARX GROUP (SALV.L) | TECHFINANCIALS (TECH.L)
B90 PREM SALV
VELTYCO GROUP (VLTY.L) | CLONTARF ENERGY (CLON.L)
B90 Holdings plc Clontarf Energy PLC
The business outperformed expectations in FY16A, produced a strong start to FY17E and is outperforming expectations for FY17E as alluded to in the AGM statement. This is the catalyst for increasing our forecasts and price target, we reiterate our Buy rating on the stock.
VELTYCO GROUP (VLTY) | BOTSWANA DIAMONDS (BOD.L)
B90 Holdings plc Botswana Diamonds Plc
VELTYCO GROUP (VLTY.L) | ASCENT RESOURCES (AST.L) | AMPHION INNOVATIONS (AMP.L) | SUNRISE RESOURCES (SRES.L) | CONNEMARA MINING COMPANY (CON.L)
B90 AMP SRES ARK AST
FY16A was a year of significant growth for Veltyco Group (‘Veltyco’), both from existing brands and from new marketing agreements struck in FY16. The 2H16 was particularly strong, which resulted in the business significantly outperforming our expectations for FY16. Revenue was €6.1m (€4.9m FY16E) and EBITDA was €2.1m (€1.4m FY16E).
VELTYCO GROUP (VLTY.L) | EDENVILLE ENERGY (EDL.L) | ARIAN SILVER CORPORATION (AGQ.L)
B90 SKA AGQ
VELTYCO GROUP (VLTY.L) | ALTONA ENERGY (ANR.L)
B90 Holdings plc Altona Rare Earths Plc
VELTYCO GROUP PLC (VLTY.L) – BUY*: Update | Savannah Resources (SAV.L) – CORP: Placing and subscription | Active Energy Group (AEG.L) – CORP: Operations and Trading Update
B90 SAV AEG
VELTYCO GROUP PLC (VLTY.L) – BUY*: Appointment | Keras Resources (KRS.L) – CORP: Tenement applications
Veltyco Group plc (‘Veltyco’) acquired Sheltyco Enterprises, which is active in marketing and promoting online casino & sports betting, lottery and options trading products and services online. The group refers customers to online brands under exclusive marketing agreements, for which it in turn receives a share of net revenues generated by the operators of the brands. We initiate with a Buy rating and 36p price target.
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