Online casino gambling concept with smartphone

'Yet another record quarter'

Aspire Global 6 May 2021 Update
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Aspire Global

‘Yet another record quarter’

Q121 results

Travel & leisure

6 May 2021

Price

SEK71

Market cap

SEK3,302m

€0.1/SEK

Net debt (€m) at 31 March 2021 (excluding IFRS 16 liabilities and client cash)

2.9

Shares in issue

46.5m

Free float

25.8

Code

ASPIRE

Primary exchange

Nasdaq First North Premier Growth Market, Stockholm

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

17.6

38.9

243.0

Rel (local)

13.8

23.8

121.1

52-week high/low

SEK71

SEK20

Business description

Aspire Global is a leading B2B provider of iGaming solutions, offering partners all relevant products to operate a successful iGaming brand. It also owns/offers B2C online gaming brands, including Karamba. Aspire operates in 26 regulated markets across Europe, the US, South America, and Africa.

Next events

H121 results

19 August 2021

Q321 results

4 November 2021

Analysts

Russell Pointon

+44 (0)20 3077 5700

Sara Welford

+44 (0)20 3077 5700

Aspire Global is a research client of Edison Investment Research Limited

Aspire Global’s (AG’s) Q121 results highlighted strong broad-based organic revenue growth (+35.6% y-o-y) complemented by improving sequential growth from recent M&A, which led to an impressive expansion in EBITDA margin (+230bp y-o-y to 17.8%). Through Q121, AG’s enhanced and more integrated offering enabled it to execute well on its strategy of expanding to more regulated markets, attracting new customers and growing sales to existing partners. We upgrade our FY21 and FY22 revenue and EBITDA forecasts by 4%, leading to an increase in our DCF-based valuation to SEK100 per share, upside of 41% from the current share price.

Year end

Revenue inc VAT (€m)

EBITDA*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/19

131.4

21.8

0.32

0.00

21.5

N/A

12/20

161.9

27.6

0.32

0.00

21.4

N/A

12/21e

195.6

34.7

0.55

0.20

12.6

2.9

12/22e

220.4

40.6

0.63

0.29

11.0

4.2

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

Q121: Sequential revenue and profit growth

AG’s Q121 revenue (including VAT) grew by 42.6% y-o-y (organically by 35.6%) with sequential (ie quarter-on-quarter) growth from all businesses. The year-on-year improvement in EBITDA margin to 17.8% (Q120: 15.5%) reflects the expected operational leverage on strong revenue growth, and the increasing contribution of the higher-margin businesses (Games and Sports) to the mix. The higher profitability led to an almost trebling of operating cash flow versus Q120, which along with existing cash on hand and bridging loans from connected parties enabled AG to redeem the bond maturity in April as expected.

Forecasts: Revenue and EBITDA upgraded by 4%

Following the strong Q121 results, we upgrade our revenue and EBITDA forecasts for FY21 and FY22 by 4%, primarily driven by higher revenue growth assumptions for Games and B2C, while retaining prior assumptions for EBITDA margins in all divisions. Our FY21 forecasts for revenue of €195.6m and EBITDA of €34.1m (using AG’s definition) compare to management’s financial targets of €200m and €32m respectively. Our higher EBITDA forecast reflects the increasing importance of the recent higher-margin acquisitions, Games and Sports.

Valuation: Discount to DCF and peers

After the upgrade to forecasts, our DCF valuation increases to SEK100 per share from SEK95 in our initiation note. AG’s valuation multiples remain at a significant discount to its larger peers. Its FY21 P/E multiple of 12.6x is a 71% discount to the adjusted average of its peers. If AG continues to execute well on its strategy and increase its scale, we expect the valuation gap versus its peers to narrow.

Q121: Strong revenue growth and margin expansion

Strong organic revenue growth (+35.6% y-o-y) and the contribution from the recent acquisition (consolidated from the start of Q420) of Sports led to ‘yet another record quarter’ financially for AG. The underlying growth is encouraging as it is broad based across the divisions, revenue grew for all divisions quarter-on-quarter, and the first quarter is traditionally the smallest quarter of the year from a financial perspective. AG’s Q121 benefits from a relatively easy year-on-year comparative from Q120, when total revenue grew by 1.5% versus the total FY20 growth of 23.2%.

Year-to-date AG has broadened its market presence, realised intra-group revenue synergies and signed partnerships with new key customers.

Group performance

In Q121, revenue including VAT increased year-on-year by 42.6% to €48.1m, revenue excluding VAT by 42.8% to €46.5m, EBITDA (AG’s definition) by 64.2% to €8.6m equating to a margin of 17.8%, PBT (excluding associates) by c 137% to €6.7m, and adjusted diluted EPS by c 161% to €0.13.

Exhibit 1: Summary income statement

€m

Q120

Q220

Q320

Q420

FY20

Q121

Revenue (inc VAT)

33.7

43.7

40.1

44.4

161.9

48.1

Growth y-o-y

1.5%

33.5%

20.7%

37.6%

23.2%

42.6%

Organic y-o-y

(7.8%)

21.3%

8.8%

30.8%

15.0%

35.6%

Revenue (excl VAT)

32.6

42.2

39.0

43.1

156.8

46.5

Growth y-o-y

0.5%

32.6%

21.2%

38.4%

23.0%

42.8%

Gaming duties

(0.9)

(1.0)

(1.2)

(1.3)

(4.3)

(1.6)

% of revenue inc VAT

2.7%

2.3%

2.9%

2.8%

2.7%

3.3%

Distribution expenses

(22.6)

(29.8)

(27.4)

(28.7)

(108.4)

(31.4)

% of revenue inc VAT

67.0%

68.1%

68.3%

64.6%

67.0%

65.3%

Administration expenses

(3.9)

(4.4)

(3.9)

(4.9)

(17.0)

(5.0)

% of revenue inc VAT

11.5%

10.0%

9.7%

11.0%

10.5%

10.3%

EBITDA (AG definition)

5.2

7.1

6.6

8.3

27.1

8.6

Margin

15.5%

16.1%

16.4%

18.6%

16.7%

17.8%

Growth y-o-y

(14.2%)

16.4%

25.7%

189.9%

24.8%

64.2%

EBITDA (Edison definition)

5.2

7.2

6.7

8.5

27.6

8.8

Margin

16.0%

17.1%

17.3%

19.6%

17.6%

18.9%

Growth y-o-y

(14.5%)

18.5%

28.3%

192.9%

26.6%

68.3%

Operating income

3.9

5.7

4.9

10.6

20.8

6.5

Margin

11.6%

12.9%

12.3%

23.8%

12.9%

13.6%

Growth y-o-y

(24.4%)

10.0%

15.5%

91.6%

17.3%

66.3%

Net finance costs

(1.1)

(0.9)

(1.0)

(1.4)

(4.4)

0.1

PBT (excluding associates)

2.8

4.8

3.9

9.2

16.4

6.7

Growth y-o-y

(46.3%)

7.1%

(15.1%)

183.5%

(3.0%)

137.2%

Tax

(0.3)

(0.3)

(0.1)

(0.7)

(1.4)

(0.6)

Effective rate

9.4%

6.6%

2.4%

7.8%

8.5%

8.5%

PAT

2.5

4.5

3.8

8.5

15.0

6.1

Associates

(0.2)

(0.3)

(0.3)

(1.1)

(1.9)

(0.1)

Net income

2.4

4.2

3.5

7.3

13.1

6.0

EPS (€)

0.05

0.10

0.09

0.09

0.32

0.13

Growth y-o-y

(43%)

8%

(16%)

0%

0%

161%

Source: Aspire Global

As noted in our initiation report, depending on the segment, AG may disclose a number of revenue figures: revenue gross of VAT, which is similar to how the online gaming operators report revenue; revenue net of VAT; and revenue including inter-segment revenue, which we do not use. In addition, AG includes share-based payments in EBITDA whereas we customarily exclude them. At the divisional level, share-based payments are not disclosed, therefore in the commentary on the segments and group performance we will use management’s definition of EBITDA, but our presented EBITDA numbers in the financial summary use our definition. Management’s commentary on revenue and profitability, specifically EBITDA, is typically with reference to revenue including VAT, therefore we will be consistent with management’s narrative.

AG’s Q121 organic growth rate for revenue (including VAT) of 35.6% y-o-y was its highest quarterly growth since the start of FY20, albeit it had a relatively easy comparative of a year-on-year decline of 7.8% in Q120 when B2C’s revenue fell year-on-year.

AG demonstrated good operating leverage as its EBITDA margin improved from 15.5% in Q120 to 17.8% in Q121. The EBITDA margin benefited from the increasing importance of the higher-margin businesses Games and Sports (see below). From a cost perspective there was operating leverage on both distribution expenses (new synergies with Pariplay offsetting the typical cost pressures of marketing and increasing exposure to regulated markets) and administration expenses (10.3% of revenue in Q121 versus 11.5% in Q120), while gaming duties increased relative to revenue (3.3% versus 2.7%) as the share of revenue from taxed and locally regulated markets continued to increase (72% in Q121 versus 70% in Q120).

Net financing moved from being a net expense of €1.1m in Q120 to a net income of €0.1m in FY21 due to changes in forex and fees, and changes with respect to related group funding and deferred and contingent consideration. Versus Q120, AG had an improved net cash position (see below).

The effective tax rate for Q121 of 8.5% was consistent with FY20 and the rate used in our forecasts for FY21 and FY22.

There was a minor reduction in associate losses to a loss of €0.1m from a loss of €0.2m in Q120.

Divisional performance

All of AG’s businesses reported a sequential (ie quarter-on-quarter) improvement in revenue from Q420 to Q121, and all businesses except Core and B2C reported a sequential improvement in EBITDA. In aggregate, total B2B revenue organic growth was 36.6% y-o-y.

The year-on-year improvement in AG’s group EBITDA margin to 17.8% in Q121 from 15.5% in Q120 is due to the improvement in margin of the B2B businesses (21.4% in Q121 versus 16.7% in Q120), partially offset by a lower margin for B2C (10.3% in Q121 versus 13.0% in Q120). The higher B2B margin reflects improved year-on-year margins for both Core (from 15.3% to 18.0%) and Games (from 25.1% to 32.9%), as well as the mix benefit of a greater relative contribution from the higher-margin businesses Games and recently acquired Sports (30.2%).

Exhibit 2: Divisional financial performance

€m

Q120

Q220

Q320

Q420

FY20

Q121

Revenue (inc VAT)

- Core

19.6

26.3

23.8

23.0

92.7

24.4

- Games

3.1

4.0

4.0

4.9

16.0

5.6

- Sports

2.2

2.2

2.4

- B2B total

22.7

30.3

27.8

30.1

110.9

32.3

- B2C

11.0

13.4

12.3

14.3

51.0

15.7

Total

33.7

43.7

40.1

44.4

161.9

48.1

Growth y-o-y:

- Core

0.7%

34.9%

13.6%

26.7%

14.3%

24.3%

- Games

N/M

N/M

N/M

61.7%

424.1%

79.0%

- Sports

N/M

N/M

N/M

N/M

N/M

N/M

- B2B total

42.6%

56.0%

51.8%

54.7%

220.8%

59.5%

- B2C

(22.5%)

(1.9%)

0.7%

29.8%

(0.1%)

43.5%

Total

1.5%

33.5%

20.7%

37.6%

23.2%

42.6%

EBITDA (AG definition)

- Core

3.0

4.4

4.4

4.3

16.1

4.4

- Games

0.8

1.0

1.1

1.3

4.2

1.8

- Sports

0.6

0.6

0.7

- B2B total

3.8

5.4

5.5

6.2

20.9

6.9

- B2C

1.4

1.6

1.1

2.0

6.2

1.6

Total

5.2

7.1

6.6

8.3

27.1

8.6

EBITDA margins:

- Core

15.3%

16.9%

18.6%

18.6%

17.4%

18.0%

- Games

25.1%

25.1%

26.6%

26.8%

26.0%

32.9%

- Sports

29.0%

29.0%

30.2%

- B2B total

16.7%

18.0%

19.7%

20.7%

18.9%

21.4%

- B2C

13.0%

12.0%

8.8%

14.3%

12.1%

10.3%

Total

15.5%

16.1%

16.4%

18.6%

16.7%

17.8%

Source: Aspire Global

The key operational and financial highlights for the divisions during Q121 are as follows:

Core: during Q121 AG has completed the integration of the BtoBet platform as well as making other enhancements to the Core platform. Management believes that the integrated offering provides a key competitive advantage versus peers, and will enable it to expand share of wallet with existing customers as well as from more potential new customers, who either do not have a sportsbook or have a sportsbook with an alternative provider. It highlights that the recently launched CRM system, AspireEngage and other enhancements have been well received.

Games: Pariplay continued to benefit from the addition of new operators (17 new deals signed during the period including in the United States, UK, Portugal, Spain and Nordics) who are attracted to the aggregation services and the range of proprietary and third-party content, both of which continue to expand. Pariplay is making good progress in building its presence in the United States as evidenced by the recent partnership launch in New Jersey; receipt of an interim iGaming supplier licence in West Virginia, and the post quarter end announcement of a deal with platform provider GAN that should enable Pariplay to accelerate its expansion in the United States. During Q121, Pariplay’s revenue increased by 79% y-o-y and c 13% q-o-q. Since being acquired in Q419, its quarterly revenue has grown from €3.0m to €5.6m in Q121, a cumulative growth rate of c 83%. The strong revenue growth has led to high operating leverage notably in Q121; the EBITDA margin has increased from 25.1% in Q120 to 26.8% in Q420 and 32.9% in Q121.

Sports: in its second financial quarter of ownership, BtoBet demonstrated sequential (ie quarter-on-quarter) growth in revenue of c 7% and EBITDA of c 12%, which included contributions from new partners in Africa. During the quarter, the platform was awarded full certification in the UK, which has already proven to be attractive to operators with the announcement of a new partnership that targets the UK, Ireland and Ghana. Management’s ambition is to gain certification in all regulated markets, which it believes can be done relatively easily, and which will enable it to serve existing and new customers. After the quarter end, AG added Grupo Televisa as a partner, which has switched from its previous sportsbook provider to BtoBet, and management will look to develop the relationship across the wider AG portfolio.

B2C: Q120 revenue of €15.7m was its highest every quarterly revenue, and reflects year-on-year growth in all key performance indicators (KPIs), that is active users, number of transactions and first-time deposits, as marketing expenses increased (from 30.8% of net gaming revenue (NGR) in Q120 to 35.8% in Q121). This follows a relatively inconsistent quarterly performance for the KPIs through FY20. The increased marketing was to support the launch of the new Griffon brand, which is performing well, and growth in the UK. The increased investment meant that B2C’s strong year-on-year revenue growth of 43.3% translated to EBITDA growth of 14.4% and an EBITDA margin of 10.3%. The division remains subject to a review with the aim of determining how best to accelerate growth.

Cash flow and balance sheet

At the end of Q120 AG’s net debt position excluding IFRS 16 liabilities and client cash was €2.9m compared to €5.2m at the end of FY20. IFRS 16 liabilities of €2.2m were modestly lower than €2.5m at the end of FY20.

AG’s quarter-end cash position improved to €41.8m from €28.7m at the end of FY20 due to higher operating cash flow generation on an absolute basis and relative to revenue, a modest reduction in investing cash outflows, and the receipt of a €10.3m bridging loan from major shareholders.

AG’s operating cash flow of €5.3m in Q121 versus Q120’s €1.9m reflects the higher group profitability and relatively stable working capital outflows relative to revenue. Investing cash flows of €2.2m were marginally lower than Q120’s €2.9m, predominantly due to the absence of investment in associates (€0.5m in Q120), and a modest reduction in internal investment in fixed and intangible assets (€2.2m in Q121 versus €2.4m in Q120).

The closing gross debt position of €38.4m mainly reflects the addition of the above €10.3m bridging loan from major shareholders during the period to the FY20 closing debt of €27.9m.

Following the period end, on 6 April 2021, the company repaid the senior secured bonds of €27.5m, which, as highlighted in our initiation note, was funded by cash on hand and the bridging loan.

Forecasts: Revenue and EBITDA upgraded by 4%

We upgrade our revenue and EBITDA forecasts for FY21 and FY22 by 4% as shown in Exhibit 3. The upgrades reflect more optimistic growth assumptions for Games and B2C, and a modest upgrade for Core. We make no changes to our assumptions for EBITDA margins in either year.

Exhibit 3: Forecast changes

€m

FY20

FY21e new

FY22e new

FY21e old

FY22e old

Change FY21e

Change FY221e

Revenue (inc VAT)

- Core

92.7

103.6

115.4

101.9

112.9

2%

2%

- Games

16.0

21.8

26.3

19.7

24.0

11%

10%

- Sports

2.2

11.5

15.9

11.5

15.9

0%

0%

- B2B total

110.9

136.9

157.6

133.1

152.8

3%

3%

- B2C

51.0

58.7

62.9

54.6

58.5

7%

7%

Total

161.9

195.6

220.4

187.7

211.3

4%

4%

Revenue (excl VAT)

- Core

91.2

101.8

113.3

100.1

110.8

2%

2%

- Games

16.0

21.8

26.3

19.7

24.0

11%

10%

- Sports

2.2

11.5

15.9

11.5

15.9

0%

0%

- B2B total

109.4

135.1

155.4

131.3

150.7

3%

3%

- B2C

47.5

54.6

58.4

50.8

54.3

7%

7%

Total

156.8

189.7

213.8

182.1

205.0

4%

4%

EBITDA (AG definition)

- Core

16.1

18.0

20.1

17.7

19.7

2%

2%

- Games

4.2

5.7

6.8

5.1

6.2

11%

10%

- Sports

0.6

3.4

5.6

3.4

5.6

0%

0%

- B2B total

20.9

27.1

32.5

26.2

31.4

3%

3%

- B2C

6.2

7.1

7.6

6.6

7.1

7%

7%

Total

27.1

34.1

40.1

32.8

38.5

4%

4%

EBITDA margin

- Core

17.4%

17.4%

17.4%

17.4%

17.4%

- Games

26.0%

26.0%

26.0%

26.0%

26.0%

- Sports

29.0%

29.2%

35.0%

29.2%

35.0%

- B2B total

18.9%

19.8%

20.6%

19.7%

20.6%

- B2C

12.1%

12.1%

12.1%

12.1%

12.1%

Total

16.7%

17.5%

18.2%

17.5%

18.2%

Source: Aspire Global, Edison Investment Research

Management’s financial targets for FY21 that were introduced in FY19 are unchanged: revenue (including VAT) of €200m and EBITDA of €32m, implying an EBITDA margin of 16%. Our revenue forecast for FY21 of €195.6m is c 2% below management’s target, but our EBITDA of €34.1m is c 7% ahead, due to the addition of higher-margin acquisitions since the guidance was set in FY19.

Valuation

The upgrade to forecasts for FY21 and updates to changes in net debt increase our DCF-based valuation to SEK100 from SEK95 at our initiation, representing 41% upside from the current share price. We use a WACC of 9% and a terminal growth rate of 2% beyond our terminal year, 2030.

Relative to its peers, AG continues to trade at a significant discount. AG’s EV/EBIT of 11.4x for FY21 is a 59% discount to the adjusted peer average of 27.7x, and the P/E of 12.6x is a 71% discount to the adjusted average of 44.1x. Relative to most of its peers, AG’s market capitalisation is smaller. However, it continues to scale its business through a combination of organic growth and M&A. If AG continues to execute well, we expect the valuation gap relative to its larger peers to narrow.

Exhibit 4: Peer valuations

Company

Share price (local ccy)

Ccy

Market cap (€m)

Sales growth CY21 (%)

Sales growth CY22 (%)

EBIT margin CY21 (%)

EBIT margin CY22 (%)

EV/ EBIT CY21 (x)

EV/ EBIT CY22 (x)

PE CY21 (x)

PE CY22 (x)

Div Yield CY21 (%)

Div Yield CY22 (%)

Bragg Gaming Group Inc

2.1

C$

259

0.6

7.0

2.5

2.1

200.1

226.6

N/A

N/A

N/A

N/A

Evolution Gaming Group AB (publ)

1,354.6

SEK

28,319

72.9

24.1

56.7

58.4

51.2

40.1

54.3

43.2

0.9

1.1

Gaming Innovation Group Inc

23.0

NOK

205

25.3

11.0

8.9

14.4

33.2

18.4

85.2

24.4

0.0

0.0

Gan Ltd

19.7

US$

694

190.8

27.8

(0.9)

7.8

N/A

66.0

N/A

92.1

0.0

0.0

International Game Technology PLC

16.6

US$

2,862

14.3

10.1

20.6

23.2

15.8

12.8

20.1

12.6

0.0

4.0

Kambi Group PLC

525.5

SEK

1,602

36.8

4.3

36.0

31.5

26.7

29.3

34.3

37.5

N/A

N/A

Playtech PLC

468.4

GBp

1,654

17.0

13.4

12.0

12.8

14.8

12.2

26.3

18.7

1.2

1.2

Scientific Games Corp

44.4

US$

3,556

14.9

11.9

16.4

19.4

24.6

18.7

N/A

24.3

0.0

0.0

Average

46.6

13.7

19.0

21.2

52.3

53.0

44.1

36.1

0.3

1.0

Average ex Bragg and Gan

30.2

12.5

25.1

26.6

27.7

21.9

44.1

26.8

0.4

1.3

Aspire Global

71

SEK

323

20.9

12.7

13.7

14.3

11.4

9.6

12.6

11.0

2.9

4.2

Premium/ (discount) to average ex Bragg and Gan

(31)%

2%

(45)%

(46)%

(59)%

(56)%

(71)%

(59)%

610%

237%

Source: Refinitiv, Edison Investment Research. Note: Priced 5 May 2021

Exhibit 5: Financial summary

€m

2016

2017

2018

2019

2020

2021e

2022e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

61.0

71.9

104.6

131.4

161.9

195.6

220.4

VAT

(0.8)

(1.1)

(2.1)

(3.9)

(5.1)

(5.9)

(6.6)

Net revenue

 

 

60.2

70.8

102.5

127.5

156.8

189.7

213.8

Operating costs

(48.7)

(56.2)

(81.1)

(105.7)

(129.2)

(155.0)

(173.2)

EBITDA (Edison)

 

 

11.5

14.6

21.4

21.8

27.6

34.7

40.6

EBITDA

 

 

11.4

14.3

21.2

21.7

27.1

34.1

40.1

Normalised operating profit

 

 

10.6

13.3

19.5

18.7

22.8

28.3

33.6

Amortisation of acquired intangibles

0.0

0.0

0.0

(0.9)

(1.5)

(1.7)

(1.6)

Share-based payments

(0.1)

(0.3)

(0.2)

(0.1)

(0.5)

(0.5)

(0.5)

Reported operating profit

10.6

13.0

19.3

17.7

20.8

26.1

31.5

Net Interest

1.7

(0.0)

0.2

(0.8)

(4.4)

1.8

(0.4)

Profit Before Tax (norm)

 

 

12.3

13.3

19.7

17.9

18.4

30.1

33.2

Profit Before Tax (reported)

 

 

12.3

13.0

19.5

16.9

16.4

27.8

31.1

Profit Before Tax (incl associates)

 

 

12.3

10.6

17.2

15.4

14.5

25.8

30.1

Reported tax

(0.7)

(0.8)

(1.0)

(15.0)

(1.4)

(2.4)

(2.6)

Profit After Tax (norm)

11.6

12.6

18.7

16.5

17.0

27.7

30.5

Profit After Tax (reported)

11.6

12.3

18.5

1.9

15.0

25.5

28.5

Associates

0.0

(2.5)

(2.3)

(1.5)

(1.9)

(2.0)

(1.0)

Discontinued operations

3.6

1.3

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

11.6

10.1

16.4

15.0

15.1

25.7

29.5

Net income (reported)

15.1

11.1

16.2

0.4

13.1

23.5

27.5

Average number of shares outstanding (m)

42.0

43.0

44.5

46.0

46.4

46.4

46.4

EPS - normalised (c)

 

 

27.7

23.5

36.8

32.7

32.6

55.3

63.7

EPS - diluted normalised (€)

 

 

0.27

0.22

0.35

0.32

0.32

0.55

0.63

EPS - basic reported (€)

 

 

0.36

0.26

0.36

0.01

0.28

0.51

0.59

Dividend (€)

0.27

0.28

0.09

0.00

0.00

0.20

0.29

Revenue growth (%)

N/A

17.9

45.4

25.7

23.2

20.8

12.7

EBITDA Margin (%)

18.7

19.8

20.3

16.5

16.7

17.5

18.2

Normalised Operating Margin

17.4

18.6

18.7

14.2

14.1

14.5

15.2

BALANCE SHEET

Fixed Assets

 

 

18.5

17.3

21.9

47.2

89.1

96.2

83.5

Intangible Assets and goodwill

2.8

5.0

7.0

25.6

67.4

71.7

76.6

Tangible Assets and Right-of-use assets

1.1

1.3

1.2

4.3

3.8

3.6

3.5

Investments & other

14.6

11.0

13.7

17.3

17.9

20.9

3.4

Current Assets

 

 

24.5

34.3

76.2

54.1

55.2

55.9

82.1

Debtors

10.7

20.1

21.7

24.6

26.2

28.7

30.7

Cash & cash equivalents including client cash

12.3

13.4

53.7

29.0

28.7

26.9

51.2

Other and restricted cash

1.5

0.9

0.8

0.4

0.3

0.3

0.3

Current Liabilities

 

 

(15.4)

(25.5)

(32.2)

(37.7)

(77.1)

(70.3)

(69.5)

Creditors

(6.8)

(11.5)

(13.7)

(16.6)

(24.2)

(29.4)

(33.4)

Tax and social security

(5.6)

(10.5)

(11.3)

(12.9)

(12.3)

(12.3)

(12.3)

Short term borrowings

0.0

0.0

(0.5)

(0.5)

(27.9)

(10.0)

0.0

Other

(3.0)

(3.5)

(6.7)

(7.6)

(12.7)

(18.6)

(23.8)

Long Term Liabilities

 

 

(0.7)

(0.7)

(27.5)

(29.4)

(19.2)

(19.2)

(19.2)

Long term borrowings

0.0

0.0

(26.9)

(27.2)

0.0

0.0

0.0

Other long-term liabilities

(0.7)

(0.7)

(0.7)

(2.2)

(19.2)

(19.2)

(19.2)

Net Assets

 

 

26.8

25.4

38.5

34.2

47.9

62.6

76.9

Minority interests

0.2

0.2

0.2

0.2

(0.3)

(0.3)

(0.3)

Shareholders' equity

 

 

27.0

25.6

38.7

34.4

47.6

62.3

76.6

CASH FLOW

Normalised operating profit

10.6

13.3

19.5

18.7

22.8

28.3

33.6

Depreciation and amortisation

0.8

1.2

1.9

4.0

6.3

6.4

7.0

Working capital

(0.2)

0.8

4.5

(2.4)

5.9

4.0

2.9

Exceptional & other

2.5

0.8

(0.6)

(1.3)

(4.1)

(1.6)

(1.6)

Tax

(0.8)

(0.1)

(0.9)

(14.5)

(1.3)

(2.4)

(2.6)

Operating cash flow

 

 

13.0

16.0

24.5

4.5

29.6

34.8

39.3

Capex

(2.4)

(3.6)

(3.9)

(6.3)

(8.7)

(10.5)

(11.8)

Acquisitions/disposals

0.0

0.0

0.0

(12.8)

(15.6)

(4.7)

0.0

Associates

(0.4)

(4.0)

(2.8)

(2.2)

(2.1)

(2.0)

(1.0)

Net interest

0.0

0.0

(0.8)

(2.0)

(2.0)

(1.3)

(0.4)

Equity financing

0.0

4.8

0.0

0.0

0.0

0.0

0.0

Debt financing

0.0

0.0

26.9

0.0

0.0

(17.9)

(10.0)

Dividends

(11.5)

(12.0)

(3.8)

(5.4)

0.0

0.0

(9.4)

Other

(0.1)

(0.1)

0.4

(0.5)

(1.5)

0.0

17.5

Net Cash Flow

(1.432)

1.152

40.308

(24.685)

(0.325)

(1.780)

24.244

Opening net debt/(cash) ex client money

 

 

(10.7)

(9.2)

(9.9)

(19.7)

4.1

5.2

(10.0)

FX

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other non-cash movements

0.0

(0.5)

(30.5)

0.9

(0.7)

17.0

9.1

Closing net debt/(cash)

 

 

(9.2)

(9.9)

(19.7)

4.1

5.2

(10.0)

(43.4)

Source: Company accounts, Edison Investment Research

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This report has been commissioned by Aspire Global and prepared and issued by Edison, in consideration of a fee payable by Aspire Global. 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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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).

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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.

United Kingdom

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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.

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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

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 Aspire Global and prepared and issued by Edison, in consideration of a fee payable by Aspire Global. 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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