bet-at-home — Trading well against expectations

bet-at-home (XETRA: ACXX)

Last close As at 28/03/2024

EUR2.59

0.07 (2.78%)

Market capitalisation

EUR18m

More on this equity

Research: Consumer

bet-at-home — Trading well against expectations

bet-at-home’s (BAH) Q121 results are strong in the context of management guidance for FY21. Trading in the early part of FY21 is likely to be as bad as it gets for BAH. The initial (negative) effects of regulatory changes in Germany will be followed by a more favourable sporting calendar and management’s belief that increased legal certainty from Q321 will help the company to better plan and develop its business. Management is optimistic that regulated companies should be able to take share from the black market, which it believes may be more than 30% of the total market. We upgrade our FY21 EBITDA forecast by 11%, taking it above management’s reiterated guidance. Our DCF-based valuation increases to €51 per share.

Russell Pointon

Written by

Russell Pointon

Director, Consumer

Consumer

bet-at-home

Trading well against expectations

Q121 results

Travel & leisure

6 May 2021

Price

€45.3

Market cap

€318m

Net cash (€m) at 31 March 2021 (excluding client money)

53.5

Shares in issue

7.0m

Free float

45.1

Code

ACXX

Primary exchange

XETR

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

0.6

14.3

19

Rel (local)

0.1

5.9

(15.9)

52-week high/low

€48.90

€29.35

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 Düsseldorf, Germany. Since 2009 bet-at-home has been part of BetClic Everest. a privately owned gaming company.

Next events

H121 results

2 August 2021

Q321 results

8 November 2021

FY21 results

7 March 2022

Analysts

Russell Pointon

+44 (0)20 3077 5700

Sara Welford

+44 (0)20 3077 5700

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

bet-at-home’s (BAH) Q121 results are strong in the context of management guidance for FY21. Trading in the early part of FY21 is likely to be as bad as it gets for BAH. The initial (negative) effects of regulatory changes in Germany will be followed by a more favourable sporting calendar and management’s belief that increased legal certainty from Q321 will help the company to better plan and develop its business. Management is optimistic that regulated companies should be able to take share from the black market, which it believes may be more than 30% of the total market. We upgrade our FY21 EBITDA forecast by 11%, taking it above management’s reiterated guidance. Our DCF-based valuation increases to €51 per share.

Year end

Revenue (GGR**) (€m)

EBITDA*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/19

143.3

35.2

4.26

2.00

10.6

4.4

12/20

126.9

30.9

3.32

2.50

13.6

5.5

12/21e

118.0

23.5

2.48

1.70

18.3

3.8

12/22e

129.8

28.8

3.10

2.20

14.6

4.9

Note: *EBITDA and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **GGR is gross gaming revenue.

Q121: Better than expected

The y-o-y revenue (GGR) decline of 5.5% to €30.5m in Q121 reflects the early stages of regulatory changes in Germany (effective October 2020), offset by an easing comparative as the quarter progressed due to the COVID outbreak at the end of Q120. Sports GGR (56% of group) increased by 25.6% y-o-y as the sporting calendar normalised, but Gaming GGR declined by 28.5%, mainly due to the regulatory changes. We believe that Austria, BAH’s second most important market, continues to trade very well. The Q121 EBITDA margin of 22.8%, a y-o-y decline of 520bp, was ahead of our prior FY21 estimate of 18.9%. The margin reflects savings in other operating costs, offset by higher marketing as the business normalises and ahead of the customary Q2 increase before major sports events.

FY21: EBITDA upgraded by 11%

For FY21, management reiterated guidance for revenue (€106–118m, a y-o-y decline of 7–16%) and EBITDA (€18–22m, decline of 29–42%). Q121 revenue of €30.5m represents 26–29% of the guidance range for FY21. As the first quarter is typically not the strongest in the year and the UEFA European Championship should help Sports revenue, we believe the guidance looks conservative. We increase our forecasts for FY21 and FY22. We have upgraded FY21 revenue by 5% to €118m and EBITDA by 11% to €23.5m.

Valuation: DCF-based valuation increased to €51

On our new forecasts, BAH’s P/E is 18.3x for FY21e and 14.6x for FY22e, which compares with the averages for peers of 22.5x and 18.7x respectively. The 3.8% dividend yield for FY21 is higher than the peer group average of 2.8%. Our DCF-based valuation increases to €51/share from €49/share in our recent outlook note.

Exhibit 1: Financial summary

€m

2019

2020

2021e

2022e

31-December

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

 

Revenue

 

 

143.3

126.9

118.0

129.8

Cost of Sales

(25.8)

(26.3)

(23.2)

(25.4)

Net Gaming Revenue

117.5

100.6

94.8

104.4

EBITDA

 

 

35.2

30.9

23.5

28.8

Operating Profit (before amort. and except.)

 

33.2

28.9

21.5

26.8

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

Share-based payments

0.0

0.0

0.0

0.0

Reported operating profit

33.2

28.9

21.5

26.8

Net Interest

(0.1)

(0.1)

(0.1)

(0.1)

Profit Before Tax (norm)

 

 

33.1

28.8

21.4

26.7

Profit Before Tax (reported)

 

 

33.1

28.8

21.4

26.7

Reported tax

(15.1)

(5.5)

(4.0)

(4.9)

Profit After Tax (norm)

29.9

23.3

17.4

21.7

Profit After Tax (reported)

18.0

23.3

17.4

21.7

Net income (normalised)

29.9

23.3

17.4

21.7

Net income (reported)

18.0

23.3

17.4

21.7

Average Number of Shares Outstanding (m)

7.0

7.0

7.0

7.0

EPS - normalised fully diluted (c)

 

 

425.53

331.92

248.01

309.60

EPS - diluted normalised (€)

 

 

4.26

3.32

2.48

3.10

EPS - basic reported (€)

 

 

2.56

3.32

2.48

3.10

Dividend per share (€)

2.00

2.50

1.70

2.20

Revenue growth (%)

(0.0)

(11.4)

(7.0)

10.0

Gross Margin (%)

82.0

79.2

80.3

80.5

EBITDA Margin (%)

24.5

24.4

19.9

22.2

Normalised Operating Margin

23.2

22.8

18.2

20.6

BALANCE SHEET

Fixed Assets

 

 

8.2

7.4

6.6

5.8

Intangible Assets

2.3

2.3

2.0

1.8

Tangible Assets

5.9

5.1

4.5

3.9

Investments & other

0.0

0.0

0.0

0.0

Current Assets

 

 

87.0

88.2

94.3

102.2

Stocks

0.0

0.0

0.0

0.0

Debtors

30.4

29.5

29.3

29.7

Cash & cash equivalents

48.0

50.9

57.2

64.7

Customer cash

6.7

5.9

5.9

5.9

Other

1.9

1.9

1.9

1.9

Current Liabilities

 

 

(50.9)

(42.5)

(42.2)

(43.0)

Creditors

(4.2)

(4.0)

(4.1)

(4.3)

Short term provisions/ tax liabilities

(33.7)

(28.7)

(28.7)

(28.7)

Short term borrowings

0.0

0.0

0.0

0.0

Other

(13.1)

(9.7)

(9.4)

(10.0)

Long Term Liabilities

 

 

(2.6)

(2.6)

(2.6)

(2.6)

Long term borrowings

0.0

0.0

0.0

0.0

Other long-term liabilities

(2.6)

(2.6)

(2.6)

(2.6)

Net Assets

 

 

41.6

50.5

56.0

62.2

CASH FLOW

Op Cash Flow before WC and tax

35.0

30.8

23.2

28.5

Working capital

6.0

(1.1)

0.0

0.4

Exceptional & other

(1.0)

(0.2)

0.0

0.0

Tax

(10.2)

(11.4)

(4.0)

(4.9)

Operating cash flow

 

 

29.9

18.1

19.2

23.9

Capex

(2.5)

(1.2)

(1.0)

(1.0)

Acquisitions/disposals

0.0

0.0

0.0

0.0

Net interest

0.0

0.0

0.0

0.0

Equity financing

0.0

0.0

0.0

0.0

Dividends

(45.6)

(14.0)

(11.9)

(15.4)

Other

(0.8)

(0.8)

0.0

0.0

Net Cash Flow

(19.0)

2.1

6.3

7.5

Opening (cash)

 

 

(68.8)

(49.8)

(51.8)

(58.1)

FX

0.0

0.0

0.0

0.0

Other non-cash movements

0.0

0.0

0.0

0.0

Closing (cash)

 

 

(49.8)

(51.8)

(58.1)

(65.6)

Closing net debt/(cash)

 

 

(48.0)

(50.9)

(57.2)

(64.7)

Source: Company accounts, Edison Investment Research


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.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

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 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

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.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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

1185 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

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

1185 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

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.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

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 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

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.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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

1185 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

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

1185 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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