bet-at-home — Guidance maintained with strong Q318

bet-at-home (XETRA: ACXX)

Last close As at 04/11/2024

EUR3.05

0.06 (2.01%)

Market capitalisation

EUR22m

More on this equity

Research: Consumer

bet-at-home — Guidance maintained with strong Q318

bet-at-home is a long-established sports betting brand, successfully crossselling into gaming. On the back of the FIFA World Cup, the company has produced a strong Q318, with gross gaming revenues (GGR) of €37.6m and a record EBITDA of €13.0m. Regulatory risks remain high, as witnessed by last year’s IP blocking in Poland, but we are encouraged that FY18 guidance has been maintained. Largely due to regulatory concerns, the stock is down c 40% ytd, trading at 9.4x EV/EBITDA and 12.5x P/E for 2018e. This is at the top end of the peer group, but the company’s strong cash position and ability to pay special dividends is very attractive.

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Written by

Consumer

bet-at-home

Travel & leisure

Price

€58.4

Market cap

€409m

Share price graph

Share details

Code

ACX

Shares in issue

7.0m

Net cash as at 30 September 2018

€67m

Business description

Founded in 1999, bet-at-home is an online sports betting and gaming company with 300 employees. It is licensed in Malta and headquartered in Dusseldorf, Germany. Since 2009 bet-at-home has been part of Betclic Everest, a privately owned French online gaming and sports betting group.

Bull

Strong brand name, five million customers.

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Online gambling is a growing market, with a CAGR of 7% to 2021 (source: H2 Gambling Capital 2017).

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Cash and cash equivalents of €67.0m underpin high dividend yield.

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Bear

Regulatory uncertainty is high in major markets, with recent proposals causing concern in Switzerland, Austria and Germany.

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2017 legislation in Poland included punitive taxes for sports betting, as well as imposing a monopoly on e-gaming.

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Competitive markets and profits affected by high marketing spend.

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Analysts

Victoria Pease

+44 (0)20 3077 5740

Katherine Thompson

+44 (0)20 3077 5730

bet-at-home is a client of Edison Investment Research Limited

Guidance maintained with strong Q318

bet-at-home is a long-established sports betting brand, successfully cross-selling into gaming. On the back of the FIFA World Cup, the company has produced a strong Q318, with gross gaming revenues (GGR) of €37.6m and a record EBITDA of €13.0m. Regulatory risks remain high, as witnessed by last year’s IP blocking in Poland, but we are encouraged that FY18 guidance has been maintained. Largely due to regulatory concerns, the stock is down c 40% ytd, trading at 9.4x EV/EBITDA and 12.5x P/E for 2018e. This is at the top end of the peer group, but the company’s strong cash position and ability to pay special dividends is very attractive.

Regulatory risks are high…

At H118, bet-at-home’s main markets were Germany (36% of gross win), Austria (31%) and Eastern Europe (18%). The mix of GGR between sports and e-gaming (casino, poker) was 43/57%, demonstrating successful cross-selling into gaming. Some of its markets are fully regulated (eg UK), but formal licensing has not yet been introduced in many of its main markets, where it pays taxes and VAT as applicable and operates under its EU licence. Regulatory risks are high, as shown by last year’s IP blocking in Poland, with similar proposals (subsequently withdrawn) in Austria. In addition, Switzerland recently voted against foreign providers of online casinos (c 3% revenues).

…but guidance has been maintained

On the back of the FIFA World Cup, bet-at-home has produced a strong Q318, with €37.6m GGR and an EBITDA of €13.0m. This compares to €1.6m EBITDA in Q218, which was affected by the majority of World Cup marketing costs. For the nine months, this equates to a €104.2m GGR (vs €108.7m in 2017) and €23.9m EBITDA (vs €25.4m in 2017). Despite the increased regulatory challenges and higher levels of gaming taxes across its markets, we are very encouraged that management has reiterated FY18 guidance of €150m GGR and €36–40m EBITDA. This is slightly higher than recently lowered consensus and assumes an unchanged regulatory environment.

Valuation: 12.5x P/E, 10.7% dividend yield for FY18e

bet-at-home’s shares have fallen c 40% ytd, largely due to regulatory concerns across many of its key markets. On consensus figures, the stock now trades at 9.4x EV/EBITDA and 12.5x P/E for 2018e, which is at the top end of the peer group. However, its healthy cash position and ability to pay special dividends is very attractive and the dividend yield for FY18e is 10.7%.

Consensus estimates

Year
end

Revenue
GGR (€m)

EBITDA
(€m)

EPS
(€)

DPS
(€
)

P/E
(x)

Yield
(%)

12/16

138.7

33.0

4.42

7.50

13.2

12.8

12/17

145.4

35.5

4.68

7.50

12.5

12.8

12/18e

147.8

36.6

4.67

6.25

12.5

10.7

12/19e

146.0

35.5

4.55

5.56

12.8

9.5

Source: Bloomberg, Edison Investment Research

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison's solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are "wholesale clients" for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document.
A marketing communication under FCA rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a "personalised service" and, to the extent that it contains any financial advice, is intended only as a "class service" provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited ("FTSE") (c) FTSE [2014]. "FTSE(r)" is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE's express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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