Stride Gaming (STR); trading performance since the start of the year in line with expectations

Bragg Gaming Group

CN: BRAG

CA$20.4m market cap

CA$0.25 last close

Bragg Gaming Group (formerly Breaking Data Corp) is a Toronto-based B2B online gaming holding company. The core asset is Oryx Gaming, a predominantly European B2B online gaming platform. Bragg’s online sports media outlet is under strategic review, including a possible sale.

Investment summary

Bragg Gaming’s core asset is Oryx Gaming, a fast growing online B2B gaming solution provider. We forecast C$38.4m revenues in FY19, with continued double-digit revenue growth until FY22. The underlying Oryx business is cash generative and we estimate that group EBITDA margin will expand from break-even at H119 to 7.6% next year. Investment risk is high, largely due to the need for financing, but Bragg is strategically well positioned to make accretive M&A. Key milestones will be the development of positive cash flow, the sale of the sports outlet (GiveMeSport), as well as the successful payment of the C$32.6m contingent cash consideration for Oryx.

Y/E Dec
Revenue (C$m)
EBITDA (C$m)
PBT (C$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A N/A N/A N/A N/A N/A N/A
2018A 12.2 (3.3) (3.6) (4.66) N/A N/A
2019E 38.4 1.7 1.1 1.48 16.9 N/A
2020E 47.3 3.6 2.6 2.53 9.9 N/A
Last updated on 17/10/2019
Industry outlook

According to H2 Gambling Capital (H2GC), the global online gaming market has grown at a c 10% CAGR over the past 10 years and amounted to c £40bn gross gaming revenues in 2018. Driven largely by the opening of the US market, H2GC estimates online growth of 7% CAGR to 2023. As Oryx continues to gain market share, we would expect the business to grow significantly faster than the sector, across all its major markets, particularly from newly regulating markets such as the US and Latin America.

Last updated on 17/10/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (C$m) 0.2
Forecast gearing ratio (%) 1
Price performance
%
1m
3m
12m
Actual (12.1) (34.6) (56.8)
Relative* (9.9) (34.4) (59.1)
52-week high/low C$1.3/C$0.2
*% relative to local index
Key management
Dominic Mansour CEO
Akshay Kumar CFO
Yaniv Spielberg Business Development Director

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