Gaming Realms - Re-Initiation of Coverage. Conviction Buy
Gaming Realms is a developer, publisher and licensor of real money and social games with operations in the UK, U.S. and Canada. The business was set up by the team behind Cashcade Ltd, creator of bingo brand Foxy Bingo, which was sold to PartyGaming for just under £96 million in 2009.
-
Strategy focused on exploiting valuable range of IP
Gaming Realms has developed and acquired a host of popular games, including the flagship “Slingo” brand. The focus is upon exploiting this IP across its real money gaming, social gaming and licensing divisions, with the strategy being to allocate capital towards the more profitable real money gaming and content licensing operations.
-
Disposal of B2C brands provides significant cash inflow
Gaming Realms has recently sold a 70% stake in certain UK online casino B2C businesses to River UK Casino Limited (RUKC) for a total value of up to £23.1 million. The minimum payment is £8.4 million, along with a further maximum cash earn-out payment of £14.7 million. Providing significant further potential, the retained 30% stake is subject to a mutual put & call option based on an uncapped valuation of 5.5 times RUKC’s 2020 EBIT.
-
Valuation suggests 148% upside
Our sum-of-the-parts based valuation is 14.55p per share, implying 148% upside from the current price of 5.875p. However, we use what we consider to be very conservative assumptions for each part of the valuation and as such believe there could be significant further upside potential. Conviction Buy.
Gaming Realms is a developer, publisher and licensor of mobile games. Co.'s principal activities is that of an online bingo and casino operator, the provision and marketing of interactive bingo and casino services to customers in the U.K. and social gaming on Facebook and mobile to customers in the U.S. and Europe. Co. has three reportable segment. The social publishing provides freemium games to the U.S. and Europe. Licensing includes IP brand and content licensing to partners in the U.S. and Europe. The real money gaming products and marketing services operates Co.'s brands and provides other digital marketing services to both gaming and non-gaming clients in the U.K.
Align Research is a commissioned research company founded in November 2015 in order to provide the under-served smaller company space with high quality analysis. We have an initial focus on the natural resources sector, in which we see significant opportunities given the current once in a generation bear market, however all undervalued small caps (sub £100m) are considered by our team. Align was founded by industry professionals with decades of experience in the stock markets, headed up by highly qualified individuals from both fund management and analytical backgrounds.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.