bet-at-home |
Anticipating improving performance through FY20 |
Q120 results |
Travel and leisure |
5 May 2020 |
Share price performance
Business description
Next events
Analysts
bet-at-home is a research client of Edison Investment Research Limited |
Given the recent loss of revenue from Switzerland and the tough comparative of Q119, growth in Q120 was expected to be negative. The outbreak of COVID-19 and subsequent cancellation of many sporting events compounded the forecast negative growth rate. Comparatives become easier as the year progresses and management has acted quickly to reduce unnecessary costs, so the company’s guidance for FY20 has been reiterated. Our forecasts remain broadly unchanged. The prospective yield of 6.3%, which is well supported by cash, continues to look attractive.
Year end |
Revenue (GGR**) (€m) |
EBITDA |
EPS* |
DPS |
P/E |
Yield |
12/18 |
143.4 |
36.2 |
4.65 |
6.50 |
8.2 |
17.1 |
12/19 |
143.3 |
35.2 |
4.26 |
2.00 |
9.0 |
5.2 |
12/20e |
127.9 |
26.1 |
2.79 |
2.40 |
13.7 |
6.3 |
12/21e |
130.4 |
26.5 |
2.83 |
2.88 |
13.5 |
7.6 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **GGR: gross gaming revenue.
Weak Q1 as expected
Against the quarter with the most difficult comparative of FY19, gross gaming revenue (GGR) fell 13.4% to €32.2m, net gaming revenue fell 17.9% to €25.5m and EBITDA fell 28.8% to €9.0m. GGR for sports (17% of group total) fell 8.4% y-o-y given the comparative (+8.1%) and the cancellation of sporting events from mid-March due to COVID-19. GGR for gaming (83% of group) fell 16.8% y-o-y but excluding the well-flagged revenue losses in Poland and Switzerland, underlying revenue was broadly flat. From a cost perspective, management acted quickly to reduce marketing (given the postponement of UEFA Euro 2020 and other events) and other costs, but personnel costs increased 6%, leading to the EBITDA margin falling from 34% in Q119 to 28% in Q120. An improvement in the number of registered users to 5.3m from 5.22m at end of FY19 indicates the health of the brand remains strong.
Guidance reiterated for FY20
Management has reiterated FY20 guidance of GGR of €120–132m and EBITDA of €23–27m. These represent declines for revenue of 8–16% and for EBITDA of 23–35% versus FY19. For FY20, comparatives become easier for sports from Q2 and the gradual re-commencing of sporting events post lockdowns are likely to lead to better growth than in Q120. For gaming, the comparatives become easier from the end of Q3, when the loss of revenues from Switzerland annualises. We increase our assumption for staff cost inflation but reduce other costs, leading to a broadly unchanged EBITDA forecast of €26.1m versus guidance of €23–27m.
Valuation: 6.3% prospective dividend yield
bet-at-home trades at 8.4x EV/EBITDA and 13.7x P/E for FY20e, which remains towards the top end of industry peers. The net cash position of c €49m versus the market capitalisation of €267m, means that the 6.3% prospective dividend yield is attractive. In our view, evidence of positive regulation changes in the core market of Germany and a recovery in sports would be a positive catalyst for the share price.
Exhibit 1: Financial summary
€m |
2016 |
2017 |
2018 |
2019 |
2020e |
2021e |
||
31-December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||||
Revenue |
|
|
138.7 |
145.4 |
143.4 |
143.3 |
127.9 |
130.4 |
Cost of Sales |
(25.8) |
(27.6) |
(28.2) |
(25.8) |
(23.6) |
(24.1) |
||
Net Gaming Revenue |
112.9 |
117.8 |
115.1 |
117.5 |
104.3 |
106.4 |
||
EBITDA |
|
|
33.0 |
36.4 |
36.2 |
35.2 |
26.1 |
26.5 |
Operating Profit (before amort. and except.) |
|
31.9 |
35.1 |
34.9 |
33.2 |
24.1 |
24.5 |
|
Amortisation of acquired intangibles |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
0.0 |
(0.9) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Share-based payments |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Reported operating profit |
31.9 |
34.1 |
34.9 |
33.2 |
24.1 |
24.5 |
||
Net Interest |
2.2 |
1.5 |
0.0 |
(0.1) |
(0.1) |
(0.1) |
||
Joint ventures & associates (post tax) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
34.1 |
36.6 |
35.0 |
33.1 |
24.0 |
24.3 |
Profit Before Tax (reported) |
|
|
34.1 |
35.7 |
35.0 |
33.1 |
24.0 |
24.3 |
Reported tax |
(3.1) |
(2.8) |
(2.4) |
(15.1) |
(4.4) |
(4.5) |
||
Profit After Tax (norm) |
31.0 |
33.8 |
32.6 |
29.9 |
19.6 |
19.8 |
||
Profit After Tax (reported) |
31.0 |
32.8 |
32.6 |
18.0 |
19.6 |
19.8 |
||
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Discontinued operations |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
31.0 |
33.8 |
32.6 |
29.9 |
19.6 |
19.8 |
||
Net income (reported) |
31.0 |
32.8 |
32.6 |
18.0 |
19.6 |
19.8 |
||
Average Number of Shares Outstanding (m) |
7.0 |
7.0 |
7.0 |
7.0 |
7.0 |
7.0 |
||
EPS - normalised fully diluted (c) |
|
|
441.58 |
481.22 |
464.67 |
425.52 |
278.66 |
282.54 |
EPS - diluted normalised (€) |
|
|
4.42 |
4.81 |
4.65 |
4.26 |
2.79 |
2.83 |
EPS - basic reported (€) |
|
|
4.42 |
4.68 |
4.65 |
2.56 |
2.79 |
2.83 |
Dividend per share (c) |
750.00 |
750.00 |
650.00 |
200.00 |
240.00 |
288.00 |
||
Revenue growth (%) |
14.0 |
4.8 |
(-1.4) |
(-0.0) |
(-10.8) |
2.0 |
||
Gross Margin (%) |
81.4 |
81.0 |
80.3 |
82.0 |
81.6 |
81.6 |
||
EBITDA Margin (%) |
23.8 |
25.0 |
25.3 |
24.5 |
20.4 |
20.3 |
||
Normalised Operating Margin |
23.0 |
24.1 |
24.4 |
23.2 |
18.9 |
18.8 |
||
BALANCE SHEET |
||||||||
Fixed Assets |
|
|
4.9 |
4.0 |
3.4 |
8.2 |
7.5 |
6.5 |
Intangible Assets |
2.0 |
2.0 |
2.0 |
2.3 |
2.8 |
3.0 |
||
Tangible Assets |
2.9 |
2.0 |
1.4 |
5.9 |
4.7 |
3.5 |
||
Investments & other |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Current Assets |
|
|
140.5 |
120.6 |
99.9 |
87.0 |
96.9 |
101.9 |
Stocks |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Debtors |
47.9 |
16.9 |
20.1 |
30.4 |
33.4 |
36.4 |
||
Cash & cash equivalents |
82.3 |
94.4 |
70.6 |
47.4 |
54.3 |
56.3 |
||
Customer cash |
9.5 |
7.5 |
7.7 |
7.4 |
7.4 |
7.4 |
||
Other |
0.7 |
1.8 |
1.5 |
1.9 |
1.9 |
1.9 |
||
Current Liabilities |
|
|
(35.1) |
(35.3) |
(34.0) |
(50.9) |
(51.9) |
(52.9) |
Creditors |
(0.5) |
(3.5) |
(3.3) |
(4.2) |
(5.2) |
(6.2) |
||
Short term provisions/ tax liabilities |
(21.4) |
(18.9) |
(19.2) |
(33.7) |
(33.7) |
(33.7) |
||
Short term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
(13.2) |
(12.8) |
(11.5) |
(13.1) |
(13.1) |
(13.1) |
||
Long Term Liabilities |
|
|
(0.7) |
(0.0) |
(0.0) |
(2.6) |
(2.6) |
(2.6) |
Long term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other long term liabilities |
(0.7) |
(0.0) |
(0.0) |
(2.6) |
(2.6) |
(2.6) |
||
Net Assets |
|
|
109.6 |
89.3 |
69.3 |
41.6 |
49.8 |
52.8 |
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Shareholders' equity |
|
|
109.6 |
89.3 |
69.3 |
41.6 |
49.8 |
52.8 |
CASH FLOW |
||||||||
Op Cash Flow before WC and tax |
32.5 |
37.0 |
36.3 |
35.0 |
26.1 |
26.5 |
||
Working capital |
(1.6) |
(3.4) |
(7.5) |
6.0 |
(2.0) |
(2.0) |
||
Exceptional & other |
1.5 |
1.2 |
1.1 |
(1.0) |
0.0 |
0.0 |
||
Tax |
0.0 |
(3.4) |
(5.0) |
(10.2) |
(4.4) |
(4.5) |
||
Net operating cash flow |
|
|
32.4 |
31.3 |
24.8 |
29.9 |
19.7 |
20.0 |
Capex |
0.0 |
0.1 |
(0.7) |
(2.5) |
(1.0) |
(1.0) |
||
Acquisitions/disposals |
(1.3) |
(0.6) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net interest |
26.0 |
29.0 |
0.0 |
0.0 |
(0.1) |
(0.1) |
||
Equity financing |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Dividends |
(15.8) |
(52.6) |
(52.6) |
(45.6) |
(14.0) |
(16.8) |
||
Other |
0.0 |
0.0 |
0.0 |
(0.8) |
0.0 |
0.0 |
||
Net Cash Flow |
41.3 |
7.2 |
(28.5) |
(19.0) |
4.5 |
2.0 |
||
Opening (cash) |
|
|
(48.8) |
(90.1) |
(97.3) |
(68.8) |
(49.8) |
(54.3) |
FX |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other non-cash movements |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Closing (cash) |
|
|
(90.1) |
(97.3) |
(68.8) |
(49.8) |
(54.3) |
(56.3) |
Closing net debt/(cash) ex client money |
|
(82.3) |
(94.4) |
(70.6) |
(47.4) |
(54.3) |
(56.3) |
|
Source: bet-at-home, Edison Investment Research |
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