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Codere

SP: CDR

€326m market cap

€2.75 last close

Codere is an international gaming company that manages c 57,000 gaming machines, 30,000 bingo seats and 7,600 sports betting terminals across Latin America, Spain and Italy. It was founded in 1980, listed in 2007 and completed a successful debt for equity swap in 2016.

Investment summary

Codere is an established retail gaming operator in Latin America, Spain and Italy. Q319 net debt/adj LTM EBITDA of 3.1x is comfortably within its banking covenants. The company has been progressively diversifying outside Argentina (23% of revenues), which helps to offset the impact from the devaluation of the Argentine peso. In October 2019, Codere reported inconsistencies within some of its Latin American subsidiary accounts and FY19 EBITDA guidance has been lowered by a total of c €30m. Barriers to entry are high and future growth should be driven by online and Spain. The free float is limited and OTC shares are subject to a restrictive shareholders’ agreement.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 1638.2 273.5 96.2 0.7 392.9 N/A
2018A 1476.4 282.9 101.7 47.7 5.8 N/A
2019E 1406.7 321.8 23.7 (18.7) N/A N/A
2020E 1443.9 338.8 38.0 (9.2) N/A N/A
Industry outlook

Codere’s key markets are Mexico, Argentina, Italy and Spain and c 75% of EBITDA is from Latin America. Codere is heavily exposed to currency and emerging market risk, which specifically includes Argentina FX risk.

Last updated on 16/01/2020
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (€m) 1081.8
Forecast gearing ratio (%) 3082
Price performance
%
1m
3m
12m
Actual (0.5) (13.0) (31.3)
Relative* 0.6 (14.7) (36.1)
52-week high/low €4.4/€2.6
*% relative to local index
Key management
Angel Corzo Uceda CFO
Guillermo Lancha Head of IR