bet-at-home — Solid H119 underpins FY19 guidance

bet-at-home (XETRA: ACXX)

Last close As at 27/03/2024

EUR2.59

0.07 (2.78%)

Market capitalisation

EUR18m

More on this equity

Research: Consumer

bet-at-home — Solid H119 underpins FY19 guidance

bet-at-home (BAH) has reported a 1.3% increase in Q219 gross gaming revenues (GGR) to €33.9m, with a 25.5% EBITDA margin. Sports GGR was 7.5% lower (€13.8m), due to the lack of major sporting events, but e gaming GGR increased by 8.5% to €20.0m. As previously highlighted, H219 results will be affected by IP blocking in Switzerland and management has maintained guidance of €130–143m GGR and €29–33m EBITDA. Our estimates remain broadly unchanged, apart from a slightly higher FY19 EBITDA forecast, due to lower marketing spend. BAH trades at 10.3x EV/EBITDA and 13.4 x P/E for FY20e, with a 9.3% dividend yield.

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Consumer

bet-at-home

Solid H119 underpins FY19 guidance

Q219 results

Travel & leisure

30 July 2019

Price

€53.50

Market cap

€375m

Net cash (€m) at 30 June 2019

43.1

Shares in issue

7.0m

Free float

47.3%

Code

ACXX

Primary exchange

XETR

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(3.7)

(26.2)

(25.7)

Rel (local)

(3.8)

(26.7)

(23.0)

52-week high/low

€73.60

€44.30

Business description

Founded in 1999, bet-at-home is an online sports betting and gaming company with c 300 employees. It is licensed in Malta and headquartered in Dusseldorf, Germany. Since 2009 bet-at-home has been part of Betclic Everest, a privately owned French online gaming company.

Next events

Q319 results

4 November 2019

Analysts

Victoria Pease

+44 (0)20 3077 5700

Richard Williamson

+44 (0)20 3077 5700

bet-at-home is a research client of Edison Investment Research Limited

bet-at-home (BAH) has reported a 1.3% increase in Q219 gross gaming revenues (GGR) to €33.9m, with a 25.5% EBITDA margin. Sports GGR was 7.5% lower (€13.8m), due to the lack of major sporting events, but egaming GGR increased by 8.5% to €20.0m. As previously highlighted, H219 results will be affected by IP blocking in Switzerland and management has maintained guidance of €130–143m GGR and €29–33m EBITDA. Our estimates remain broadly unchanged, apart from a slightly higher FY19 EBITDA forecast, due to lower marketing spend. BAH trades at 10.3x EV/EBITDA and 13.4 x P/E for FY20e, with a 9.3% dividend yield.

Year end

Revenue (GGR) (€m)

EBITDA
(€m)

EPS*
(€)

DPS**
(€)

P/E
(x)

Yield
(%)

12/17

145.4

36.4

4.81

7.50

11.1

14.0

12/18

143.4

36.2

4.65

6.50

11.5

12.1

12/19e

136.9

32.1

3.97

5.00

13.5

9.3

12/20e

140.3

32.4

3.99

5.00

13.4

9.3

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Includes special dividends.

E-gaming GGR increases by 8.5%

Driven by an 8.5% increase in e-gaming GGR, BAH reported total Q219 GGR growth of 1.3% to €33.9m, with an EBITDA of €8.6m (vs €33.4m GGR and €1.7m EBITDA in Q218). This was sequentially lower than Q119 (at €37.2m GGR and €12.7m EBITDA). As expected, Q219 sports GGR declined by 7.5% vs the prior year, largely due to the high volumes from the FIFA World Cup in 2018. During the quarter, marketing costs of €8.5m represented 25% of GGR, which is at the low end of long-term trends (25–30%) due to the lack of any major tournaments. After the payment of the FY18 final dividend of €6.50 in May (€45.5m cash), net cash was €43.1m at 30 June 2019 (this excludes customer balances of €6.7m).

Swiss IP blocking to affect H219, as expected

On the back of a solid H119, management has reiterated FY19 guidance of €130–143m GGR and an EBITDA of €29–33m. This compares to €71.1m GGR and €21.3m EBITDA already achieved in H119 and therefore assumes a significant negative impact resulting from IP blocking in Switzerland (effective from July 2019). Pending further clarity on volumes, we are leaving our GGR estimates broadly unchanged. However, we have nudged our FY19 EBITDA forecast up from €31.6m to €32.1m, due to slightly lower marketing costs. We believe our estimates are conservative but note that the company continues to face regulatory uncertainty across many of its markets – please see our March initiation report for details.

Valuation: 9.3% FY20e dividend yield

BAH trades at 10.3x EV/EBITDA and 13.4x P/E for FY19e, which is towards the top end of the peer group, but its healthy net cash position and 9.3% forecast dividend yield are very attractive. In our view, a major catalyst for a re-rating would be concrete evidence of positive regulation in core markets, especially Germany (egaming in particular) and Austria.

Exhibit 1: Financial summary

Year end 31 December

€m

2014

2015

2016

2017

2018

2019e

2020e

2021e

INCOME STATEMENT

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

Revenue (GGR)

 

 

107.0

121.6

138.7

145.4

143.4

136.9

140.3

143.1

Cost of Sales

(12.3)

(21.3)

(25.8)

(27.6)

(28.2)

(25.8)

(26.7)

(27.2)

Net Gaming Revenue

94.7

100.3

112.9

117.8

115.1

111.1

113.6

115.9

EBITDA

 

 

26.8

31.6

33.0

36.4

36.2

32.1

32.4

33.7

Normalised operating profit

 

 

25.9

30.7

31.9

35.1

34.9

30.2

30.4

31.7

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

(0.1)

0.1

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

0.0

0.0

Reported operating profit

25.8

30.8

31.9

34.1

34.9

30.2

30.4

31.7

Net Interest

1.7

2.2

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

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

27.5

32.9

34.1

36.6

35.0

30.3

30.4

31.8

Profit Before Tax (reported)

 

 

27.5

32.9

34.1

35.7

35.0

30.3

30.4

31.8

Reported tax

(1.8)

(2.3)

(3.1)

(2.8)

(2.4)

(2.5)

(2.4)

(2.5)

Profit After Tax (norm)

25.7

30.6

31.0

33.8

32.6

27.8

28.0

29.2

Profit After Tax (reported)

25.6

30.7

31.0

32.8

32.6

27.8

28.0

29.2

Minority interests

0.0

0.0

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

0.0

0.0

Net income (normalised)

25.7

30.6

31.0

33.8

32.6

27.8

28.0

29.2

Net income (reported)

25.6

30.7

31.0

32.8

32.6

27.8

28.0

29.2

Basic average number of shares outstanding (m)

7.0

7.0

7.0

7.0

7.0

7.0

7.0

7.0

EPS - basic normalised (€)

 

 

3.66

4.36

4.42

4.81

4.65

3.97

3.99

4.16

EPS - diluted normalised (€)

 

 

3.66

4.36

4.42

4.81

4.65

3.97

3.99

4.16

EPS - basic reported (€)

 

 

3.65

4.37

4.42

4.68

4.65

3.97

3.99

4.16

Dividend (€)

0.60

2.25

7.50

7.50

6.50

5.00

5.00

5.00

Revenue growth (%)

25.0

13.6

14.0

4.8

(1.4)

(4.5)

2.5

2.0

Gross Margin (%)

88.5

82.5

81.4

81.0

80.3

81.2

81.0

81.0

EBITDA Margin (%)

25.0

26.0

23.8

25.0

25.3

23.5

23.1

23.5

Normalised Operating Margin

24.2

25.2

23.0

24.1

24.4

22.1

21.6

22.1

BALANCE SHEET

Fixed Assets

 

 

4.5

4.8

4.9

4.0

3.4

7.6

6.6

5.6

Intangible Assets

2.4

2.2

2.0

2.0

2.0

2.1

2.3

2.5

Tangible Assets

2.1

2.6

2.9

2.0

1.4

5.5

4.3

3.1

Investments & other

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Current Assets

 

 

89.9

123.3

140.5

120.6

99.9

84.3

79.2

75.3

Stocks

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Debtors

57.9

70.7

47.9

16.9

20.1

25.1

30.1

35.1

Cash & cash equivalents

21.8

40.7

82.3

94.4

70.6

49.7

39.6

30.7

Customer cash

9.7

9.4

9.5

7.5

7.7

8.0

8.0

8.0

Other

0.5

2.5

0.7

1.8

1.5

1.5

1.5

1.5

Current Liabilities

 

 

(27.0)

(32.7)

(35.7)

(35.3)

(34.0)

(41.0)

(42.0)

(43.0)

Creditors

(1.3)

(1.0)

(0.5)

(1.8)

(3.3)

(4.3)

(5.3)

(6.3)

Short term provisions/ tax liabilities

(14.1)

(19.9)

(21.4)

(22.6)

(19.2)

(25.2)

(25.2)

(25.2)

Short term borrowings

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

(11.5)

(11.8)

(13.9)

(10.9)

(11.5)

(11.5)

(11.5)

(11.5)

Long Term Liabilities

 

 

(0.1)

(0.0)

(0.1)

(0.0)

(0.0)

(3.5)

(3.5)

(3.5)

Long term borrowings

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other long term liabilities

(0.1)

(0.0)

(0.1)

(0.0)

(0.0)

(3.5)

(3.5)

(3.5)

Net Assets

 

 

67.5

95.3

109.6

89.3

69.3

47.4

40.3

34.4

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

67.5

95.3

109.6

89.3

69.3

47.4

40.3

34.4

CASH FLOW

Op Cash Flow before WC and tax

26.8

31.6

33.0

36.4

36.2

32.1

32.4

33.7

Working capital

(4.4)

(3.6)

(0.1)

(2.4)

(6.5)

(4.0)

(4.0)

(4.0)

Exceptional & other

5.8

5.9

0.4

(0.4)

0.0

0.0

0.0

0.0

Tax

(1.8)

(2.3)

(3.1)

(2.8)

(5.0)

(2.5)

(2.4)

(2.5)

Net operating cash flow

 

 

26.4

31.7

30.2

30.8

24.8

25.7

25.9

27.1

Capex

0.0

0.0

0.0

0.0

(0.7)

(1.0)

(1.0)

(1.0)

Acquisitions/disposals

(2.4)

(1.1)

(1.3)

(0.5)

0.0

0.0

0.0

0.0

Net interest

2.2

2.2

0.3

1.5

0.0

0.1

0.1

0.1

Equity financing

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Dividends

(2.8)

(4.2)

(15.8)

(52.6)

(52.6)

(45.6)

(35.1)

(35.1)

Other

(15.0)

(9.6)

28.2

33.0

4.7

0.0

0.0

0.0

Net Cash Flow

8.4

19.0

41.6

12.1

(23.8)

(20.9)

(10.1)

(8.9)

Opening net debt/(cash)

 

 

(13.4)

(21.8)

(40.7)

(82.3)

(94.4)

(70.6)

(49.8)

(39.7)

FX

0.0

0.0

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

0.0

0.0

Closing net debt/(cash)

 

 

(21.8)

(40.7)

(82.3)

(94.4)

(70.6)

(49.8)

(39.7)

(30.8)

Source: bet-at-home accounts, Edison Investment Research

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This report has been commissioned by bet-at-home and prepared and issued by Edison, in consideration of a fee payable by bet-at-home. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

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NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by bet-at-home and prepared and issued by Edison, in consideration of a fee payable by bet-at-home. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

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No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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Vermilion Energy — Q219 FFO 4.8% below consensus

Vermilion has reported Q219 FFO (fund flows from operations) of C$222.7m, 4.8% below consensus of C$233.8m and 8.2% below our forecast of C$242.5m despite a 14% increase in FFO y-o-y. Key drivers of the miss versus our forecast include reduced production in France due to a refinery outage which had a post-tax FFO impact of C$11m and an inventory build in Australia which had an impact of C$8m. At 103.0kboed, production was 1.2% ahead of our forecast despite the outage in France, driven by new wells contributing in the US (production +21% q-o-q) and Australia (+14% q-o-q). Guidance for FY19 production remains 101–106kboed (with the mid-point implying 19% y-o-y growth) and Vermilion’s capex budget of C$530m remains unchanged. Our last published valuation was C$47.5/share, based on a blend of FY19 P/CF, EV/EBIDAX and multiple of FCF plus five-year NAV growth. We note that there has been a material de-rating in the Canadian large-cap E&P sector which currently trades at an average 2.7x FY19e P/CF versus 3.8x at the time of our last Vermilion publication.

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