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Research: Consumer
BlueBet’s (BBT’s) Q223 results highlighted a robust performance in its primary geography, Australia, against a more competitive backdrop. Good progress was made in the US, with ClutchBet (BBT’s brand) in Iowa performing well after its August 2022 launch. BBT has been awarded a temporary operating licence in Colorado, which is expected to go live in mid-March. Management is exploring partnerships for its B2B Sportsbook-as-a-Solution business as it enters the second phase of its US growth strategy. Management expects net operating cash outflows to normalise in H223.
BlueBet Holdings |
Robust core and executing in the US
Travel and leisure |
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27 January 2023 |
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BlueBet’s (BBT’s) Q223 results highlighted a robust performance in its primary geography, Australia, against a more competitive backdrop. Good progress was made in the US, with ClutchBet (BBT’s brand) in Iowa performing well after its August 2022 launch. BBT has been awarded a temporary operating licence in Colorado, which is expected to go live in mid-March. Management is exploring partnerships for its B2B Sportsbook-as-a-Solution business as it enters the second phase of its US growth strategy. Management expects net operating cash outflows to normalise in H223.
Q223 results and update on US operations
In Australia, BBT reported growth in active customers (+32.3% y-o-y) and turnover (+5.6% y-o-y) in Q223, winning market share in an increasingly competitive environment, according to management. Sports turnover was up by 58% y-o-y, boosted by the FIFA World Cup. However, due to the change in mix towards sports and increased marketing expenditure, the net win margin fell 0.7pp y-o-y to 9.3%. Progress continues to be made in the US as ClutchBet ranked 10 out of 19 operators by revenue in Iowa in Q2, having only taken first bets in August. The company has received approval for a temporary internet sports betting operator licence from the Colorado Gaming Control Commission and expects to go live in Colorado in mid-March. BBT hopes to launch its BlueBet Global Platform by June, a centralised platform which management believes will enable it to scale efficiently.
Cash flow normalisation expected in H223
Management remains confident in normalising operating cash flows and, consequently, margins in H223, seeking to return the Australian business to positive operating cash flow in the second half of FY23. Since the Q123 results in October, FY23 consensus revenue estimates have fallen by 5% and adjusted EPS loss forecasts have increased by 9.5%.
Valuation: Discount to global peers
BBT trades on consensus EV/Sales multiples of 0.42x in FY23e and 0.33x in FY24e, significant discounts of 77% and 80%, respectively, to our peer group. The continued discount reflects the early-stage nature of the business and relatively low free float (28.6%). BBT ended Q223 with net cash (excluding customer deposits) of A$28.5m (Q123: A$38.7m) after higher levels of operating net cash outflow due to elevated investment in marketing, promotions and pricing. As stated above, management expects operating cash flows and margins to normalise in H223.
Consensus estimates
Source: Refinitiv, BlueBet. Note: *Revenue is wagering revenue (net win less general sales tax). |
BlueBet Holdings is a client of Edison Investment Research Limited
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Research: TMT
For FY22, MotorK reported a record Q4, driven by its focus on higher-value enterprise contracts, the launch of its SparK platform and the continued migration of acquired companies onto the platform. Annualised recurring revenue (ARR), management’s main metric for tracking performance, was €26.9m, falling short of our €28m forecast and management’s guided range of €28–30m. FY23 and beyond looks set to benefit from a large pipeline of contract opportunities, with €5.2m of additional ARR committed as at 31 December 2022. Growth should be supported by maintaining low customer churn and high net revenue retention.
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