Diversification and scale for online success

The global online gaming market generated c £40bn of gross gaming revenues (GGR) in 2018 and newly regulating markets (the US) are expected to contribute to 7% CAGR to 2023 (according to H2 Gambling Capital (H2GC)). However, while regulated markets have provided significant opportunities for operators to date, government intervention remains a constant threat and legislation is tightening. Some mature markets (notably the UK) have been raising taxes and implementing regulatory burdens, which inc

Trading since 30 June

Management reported that overall performance since 30 June is consistent with performance seen at the time of the half year results, reported on 23 August. B2B Gaming in line with trends reported at half year and Asia has stabilised at an annual run-rate of €150m. In B2C Gaming, momentum in Snaitech has continued into in the 2H18. TradeTech continued to display positive moment in the 2H18, though market movements favoured customers in September and October. Plus500 shares sold and €530m bond off

Small Cap Breakfast

Green Man Gaming—pure play e-commerce and technology company in the digital video games industry. revenue CAGR growth of 26.7% in the last three years to £47.5m. Due late Sep. EBITDA Profitable. Offer TBA Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is exploring its options in relation to a potential move to the AIM market of the London Stock Exchange which, if it were to proceed, would likely take place over

Off to the races as NFL season draws closer

The US sports betting market has the potential to be significantly large. However, lack of federal level legislation, sluggish state by state legislative processes, and other limiting factors will cause a likely drag on the sport betting market’s full potential. The American Gaming Association estimates at least $150bn is wagered annually with offshore books, which implies a $10bn - $12bn revenue market. We estimate, onshore online sports revenue in 4 - 5 years of $6bn (table 6, p14) should be a

Dignity Decree on advertising in Italy

Coalition government in Italy will introduce a blanket ban on advertising which is to take effect from June 2019. Decree outlaws all forms of advertising of gambling across all media (television, radio, internet) and includes prohibition of gambling sponsorships in football. State run national lottery exempt.

B2B Asia remains difficult

Average daily revenue YTD in B2B Gaming (ex Asia) are +7%, which implies a slight improvement to the time of the full year results in February and the AGM statement in May 18. Average daily revenue in Asia impacted by increasing competition. As a result management expect a significant impact on revenue throughout the rest of the year and the current run rate in Asia is materially below both the average 2H17 and the expected average for 2H18. Management citing expects revenue could me c. €70m low

Follow up from this morning

Following the profit warning, relating to Asia, we update our forecasts. Proforma forecasts for FY18e includes SNAI and newly adjusted figures for Asia in B2B Gaming, we now look for €414m of EBITDA in FY18e growing to €443m in FY19e.

TradeTech Capital Markets Day

We attended the TradeTech (PTEC’s financial division) capital markets day yesterday. The presentation was well attended and it was an opportunity to meet senior management and to showcase technology.

AAMS signs off on SNAI deal

PTEC this morning announces that it has received consent from Agenzia delle Dogane e dei Monopoli (AAMS), the Italian regulator regarding the acquisition of SNAI and as result the Initial acquisition of c. 70.6% of SNAI will complete in June as opposed to the 3Q18 as originally intended.

£2 FOBT limit and self-help estimates

A £2 max stake, is a worst-case scenario for operators with betting shops, we estimate (table 1, p2) it will reduce operators’ revenues and profits significantly, though these estimates exclude any self-help initiatives available to management teams, such as shop closures, automation (SSBTs) and further omnichannel rollout to mitigate the impact of lower B2 limits. Furthermore, we estimate increasing POC tax from 15% to 20% for online (table 3, p4), would offset the taxes lost on FOBTs for the T

Opening up a significant market

The Supreme Court of the USA (SCOTUS) yesterday voted 7-2 in favour of repealing the Professional and Amateur Sports Protection Act of 1992. Seven justices voted in favour of repealing with the court quoting: “Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own. Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not. PASPA “regulate[s] state governments’ regulatio

Morning Note – 24 April 2024

Record revenue and profitability, FY24 on track

LIBERUM: 1Spatial: Walk the talk and get SaaSy

Cordel Group - Positive steps towards ambitious FY24 goals

Cordel’s Q324 update shows progress towards the group’s FY24 revenue expectation and other objectives, supporting our forecasts. Doubling the customer base by year-end is a key milestone, which encouragingly looks set to come in part from tier-one US railroads, offering the greatest scope for large seven-figure contracts from its target markets. Developments with Amtrak, as Cordel moves to the five-year service phase, and Angel Trains in the UK provide positive indicators for stable recurring re

Dillistone Group - FY2023 results in-line, solid start to 2024, earnings recovery set to gain momentum

Dillistone, a supplier of software to the international recruitment industry, has announced a solid set of full year results that, in our view, pave the way for rapid YoY earnings progression from FY2024. For FY2023, against a small, anticipated YoY decrease in sales, adjusted EBITDA exhibited substantial growth of 38.5% to £1.3m (FY2022: £0.9m), ahead of our £1.2m estimate, and with a welcome return to profitability, PBTA of £0.1m (FY2022: loss £0.3m) in-line with our expectation. Our cautious

Steady interim progress

Access Intelligence - Confidence restored

Access Intelligence has delivered interims to May 2022 in line with the June trading update and unchanged expectations. EBITDA of £0.3m was delivered from revenue of £32.7m, yielding a strong interim net cash balance of £9.3m after positive working capital movement despite a period of investment. The important elements to visibility are the regional ARR movements: within EMEA and North America, ARR grew £1.2m (+14% vs 1H21); while in the acquired APAC business, Isentia, ARR decline slowed to £0.

Fonix Mobile - Robust H1 with +18% gross profit growth, forecasts reiterated

Fonix’s H1 results show gross profit growth of +18% yoy to £9.2m, adjusted EBITDA growth of +18% yoy to £7.3m, and a confident outlook that leads us to conservatively reiterate our FY24E and FY25E forecasts, after we upgraded by +3-4% at the January trading update. A record month of commercial trading in both the UK and International operations in December drove H1 TPV +15% yoy to £158m, with the growth rate partially reflecting the lower H1 23 following HM The Queen’s death in September 2022. G

Morning Note – 15 April 2024

LIBERUM: GetBusy plc* - Acquisitions further strengthen SmartVault's outlook

LIBERUM: GetBusy* - Momentum continues to build

Strong marketing technology recovery play

Adcore is a global digital advertising technology company providing Software-as-a-Service (SaaS) solutions for marketing via search engines and social media. The company is focused on delivering advertising solutions for e-commerce enterprises. This is a fast-growing segment of the digital marketin

Altitude Group (ALT LN) - New major contracts and FY23 ahead of expectations

Altitude has announced multiple new contracts in its Adjacent Markets Programmes (AMP) that are expected to have a significant impact on Group revenue. Zeus adjusted EBITDA forecasts are upgraded 11.9% in FY24 and 24.2% in FY25 to reflect this. The Group has also guided that FY23 adjusted EBITDA is expected to be above expectations (£1.70m), so we upgrade by 8.8% to £1.85m. Today’s contract wins and confident outlook statement provide further positive momentum. Altitude shares trade below our up

Altitude Group (ALT LN) - Trading update highlights strong start to FY24

Altitude has released a trading statement this morning confirming FY23 results will be at least in line with Zeus’ recently upgraded forecasts and trading in the first few weeks of FY24 has been strong. The upgrades put through at the time of the last update (28th March) were predicated on new contract wins in the Adjacent Markets Programmes (AMPs) leading to an increase in EBITDA expectations of 11.9% in FY24 and 24.2% in FY25. The contracts underpin the strong start to the new financial year b

GetBusy - Productively scaling to create value, strong FY22 results

We initiate coverage of GetBusy with a target price of 160p. The investment case is focused upon scaling the complementary SaaS products, which provide productivity and document management solutions for the accounting and professional services industries. Today’s FY22 results show excellent progress, with revenue of £19.3m +1% ahead of the December trading update, organic revenue growth increasing to +20% in H2 22 from +10% in H1 21, and FY22 net cash of £3.0m ahead of consensus of £2.4m. In FY2