GBL 1H FY24: Exceptional Dividend Thanks To Trimming Adidas Stake

NAVps remained flat at €113.9 (vs. €113.6 during FY23-end). What surprised us was the management's decision to payout a dividend of €5.0ps, up 82% YoY. The massive uptick in dividend payment is possible thanks to the €630.0 cap. gains which came from decreasing the stake in Adidas from 7.6% to 5.1% (€999.0m proceeds). Given that GBL materially trimmed its position in Adidas and has entered into a forward contract to sell another €250.0m, we feel that, over the medium term, the stake in Adidas and other listed assets will be trimmed as management continues to crystallise value and shift to a higher private allocation. Since FY19 (excl. FY22), Adidas has contributed to approximately 9-10% of cash earnings. Also, GBL announced a strategic update to be held right after Q3 results on 7th Nov'24 during which we feel that mgmt. might announce a higher future allocation to private assets (above the current 40.0% target). We currently estimate NAVps and TEVp to be €118.2 and €133.0 respectively, implying discounts of 41.5% and 48.0% respectively. We reiterate our BUY rating & €100.0 TP.