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Gaming Innovation Group: A signing a day keeps the… - ABG

SportnCo synergies already visible: five Q2 signings Positive ‘23e-‘24e estimate changes, EBITA up 11-10% Trading at 6x ‘23e EV/EBITA – share down 7% YTD

Q2 expectations We expect normalised revenue and EBITA of EUR 21.5m and 4.7m, corresponding to y-o-y sales growth of 32% (13% q-o-q) and a normalised EBITA margin of 21.8%. For comparison, April revenues were up 42% y-o-y (of which 28% organic), but we expect May and June revenues could be a bit slower y-o-y given the slower sports calendar in the latter part of Q2 relative to last year. In addition, the loss of Betsson premium fees will likely weigh on short-term revenues. On the positive side, SportnCo – which generated Q1’22 EUR 2.4m and 1.4m in sales and EBITDA, respectively – will now be consolidated into the numbers, contributing some sequential growth to the platform segment. On normalised costs, we expect limited changes from Q1 apart from a EUR 1m opex addition from the integration of SportnCo and an increased acquisition-related amortisation of ~EUR 1m.

Estimate changes We expected some client signings during the year, but not at the rapid pace we have now seen. For timing reasons, our ‘22e platform sales are less impacted, while ‘23e-‘24e rises by 6%. We also adjust our ’22e media revenue expectations, resulting in positive total ‘22e revenue revisions of 2%. Coupled with minor opex tweaks, apart from amortisation related to the integration of SportnCo, ‘22e-‘24e EBITA comes up 11-10% for normalised EBITA margins of 25.9%, 33.2% and 36.4%, respectively

Rapid pace of client signings doesn’t look set to slow down In addition of the five client signings announced during Q2, we have already seen three new ones announced in July. We believe the synergies are already starting to improve GiG’s abilities to sign platform deals with a more holistic offering following the integration of the SportnCo sportsbook.

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