JPJ Group plc

LN: JPJ

£532.5m market cap

715p last close

JPJ Group is a leading online gaming operator mainly focused on bingo-led gaming. It has announced the £490m acquisition of Gamesys Group and completion is expected in Q319. The enlarged group will be renamed Gamesys Group.

Investment summary

JPJ is the leading player in the UK bingo-led market and is also expanding rapidly in other markets. Following the £490m acquisition of Gamesys (expected completion in Q319), c 35% of revenues will be derived from international markets. As a result of the deal, we forecast 10.5% EPS accretion in FY20, with net debt/EBITDA of 3.1x at YE19 falling to 2.0x at YE20 – at which point the company could start paying a dividend.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 304.7 108.6 78.2 103.9 6.9 5.2
2018A 319.6 112.7 92.7 118.5 6.0 5.0
2019E 535.0 153.8 112.8 93.8 7.6 8.4
2020E 563.8 175.4 141.9 118.0 6.1 4.9
Last updated on 18/09/2019
Industry outlook

In the UK, the government has raised the remote gaming duty from 15% to 21%, with implementation from April 2019. Gaming companies must also comply with a number of social responsibility measures, including ID checking, source of funds and AML checks. Sweden has also introduced a gaming tax of 18% from FY19.

Last updated on 18/09/2019
Sector
Consumer
Share price graph
Balance sheet
Forecast net debt (£m) 459.6
Forecast gearing ratio (%) 153
Price performance
%
1m
3m
12m
Actual 11.7 (4.7) (9.5)
Relative* 8.1 (3.8) (9.2)
52-week high/low 787.0p/590.0p
*% relative to local index
Key management
Neil Goulden Chairman
Keith Laslop CFO

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