reports
- Victoria Pease
Kindred spirits
Kindred Group’s all cash offer for 32Red marks a meaningful and well-priced entry into the UK online casino market. With robust FY results and 20% growth in Q117 net gaming revenues, our standalone 32Red forecasts are largely unchanged, underpinned by continued margin expansion and high cash generation. Within an enlarged group, there should be additional revenue and cost synergies, suggesting upside to our numbers. Consideration is expected to be paid in mid/late May.
- Victoria Pease
Acceptance of all-cash offer by Kindred Group
32Red has agreed an all cash takeover by Kindred, at 196p per share. Together with an approved 4p dividend, this represents a 32.4% premium to last month’s average. This equates to 10.6x EV/EBITDA and 14.3x P/E for 2017, a small premium to the larger peer group. Given 32Red’s brand strength, regulated bias and growth momentum, this appears justified.
Confident start to 2017
32Red has announced a positive 2016 post-close trading update and strong current trading with a 21% increase in January revenues (to 30th). We expect 2016 EBITDA to have doubled to £10.5m (a marginal reduction on our previous forecast due to lower win margins), helped by the highly accretive Roxy acquisition. Our unchanged 2017/18 forecasts are for continued very strong profits growth as the business scales up, with more favourable supplier agreements and Italy now in profit. The 2017e EV/EBITDA...
Ford Equity International Rating and Forecast Report
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
Upping its game
32Red’s brand punches above its weight in the UK online casino market. Management has adopted a more aggressive stance since mid-2015, both in terms of marketing and with the highly accretive £8.4m Roxy Palace acquisition. Interims show H116 EBITDA rising to £4.5m (H115: £1.2m) and we initiate with forecast EPS more than doubling in 2016 and growing by over 65% between 2016 and 2018. Yet the 2016e P/E is only 13.5x and our peer group comparison and DCF suggest a value of 193-247p per share, 46-8...
Upping its game
32Red’s brand punches above its weight in the UK online casino market. Management has adopted a more aggressive stance since mid-2015, both in terms of marketing and with the highly accretive £8.4m Roxy Palace acquisition. Interims show H116 EBITDA rising to £4.5m (H115: £1.2m) and we initiate with forecast EPS more than doubling in 2016 and growing by over 65% between 2016 and 2018. Yet the 2016e P/E is only 13.5x and our peer group comparison and DCF suggest a value of 193-247p per share, 46-8...
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