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Research: Consumer
Aspire Global (AG) has announced a review of the role of the B2C segment (proprietary online gaming brands) in the group structure. The motivation for the review is to identify how best to accelerate the segment’s revenue growth profile, and thus the overall group profile. Potential outcomes include the sale of the segment or to merge it with another similar business, and management expects that the B2C brands would likely continue to be customers of its B2B segment. As well as providing profitable growth to AG since its IPO in FY17, strategically the segment has provided insight into wider product development in iGaming for the rest of the group. The B2C segment has provided CAGRs in revenue and EBITDA of c 13% and c 10% respectively since FY16, versus the group averages of 29% and 24%. CEO Tsachi Maimon discusses the review of the B2C segment in the following executive interview.
Aspire Global |
Investigating how to enhance growth
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Travel & leisure |
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2 March 2021 |
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Aspire Global (AG) has announced a review of the role of the B2C segment (proprietary online gaming brands) in the group structure. The motivation for the review is to identify how best to accelerate the segment’s revenue growth profile, and thus the overall group profile. Potential outcomes include the sale of the segment or to merge it with another similar business, and management expects that the B2C brands would likely continue to be customers of its B2B segment. As well as providing profitable growth to AG since its IPO in FY17, strategically the segment has provided insight into wider product development in iGaming for the rest of the group. The B2C segment has provided CAGRs in revenue and EBITDA of c 13% and c 10% respectively since FY16, versus the group averages of 29% and 24%. CEO Tsachi Maimon discusses the review of the B2C segment in the following executive interview.
The B2C segment includes AG’s proprietary online gaming sites, which use the company’s B2B technology platform and managed services, and are marketed to the company’s own online customers. The segment’s best-known brand is Karamba.
Management’s strategy for the B2C segment has been to enter new verticals and markets, grow the number of games offered, and thus present the opportunity to attract new online customers and grow the segment. From a pure focus on casino games at the time of the IPO, AG’s sportsbook was launched in H118 to benefit from betting volumes during the FIFA World Cup, which drove strong growth in the number of users, transactions, revenue and profitability. In FY19, ongoing innovation and entry into new markets continued, however regulatory changes and operating restrictions in certain key geographies hampered growth towards the end of the year and into the early part of FY20. AG’s continuous investment in CRM led to improving KPIs and financial results as FY20 progressed, and as a result, B2C’s revenue was at an all-time high in FY20.
In FY20, B2C contributed revenue of €51.0m, revenue (net of VAT) of €47.5m and EBITDA of €6.2m, representing 31% of group revenue and 23% of EBITDA. The segment’s revenue has grown in every year since FY16, the year prior to AG’s IPO, with a CAGR of c 13%. B2C’s EBITDA CAGR since FY16 has been c 10%, lagging revenue growth due to management’s strategy of targeting growth in regulated markets, in which taxes and duties are more predictable, albeit higher. B2C’s FY20 EBITDA margin of 12.1% compares with the B2B segment’s EBITDA margin of 19.1%. At the end of FY20, AG secured repayment of the outstanding bond and had net debt of c €5m, therefore it is financially well placed as it conducts the review of the B2C segment.
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Consensus estimates
Source: Refinitiv consensus estimates |
Aspire Global is a research client of Edison Investment Research Limited
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Research: Real Estate
Regional REIT’s (RGL’s) Q420 DPS, in line with the company’s previous guidance, takes the aggregate FY20 DPS to 6.4p, and is supported by continuing strong rent collection. The company has previously indicated that it was targeting dividends to be fully covered by EPRA earnings and we expect this to be confirmed when detailed FY20 results are released on 25 March.