Earnings+More - 888 admits to debt woes
888 admits to debt woes888 blames economy for leverage issues, Maryland off to a strong start, Macau concession reaction +MoreGood morning. On today’s agenda:
Hearing the water before seeing the falls. 888’s debt troubles888 has admitted the worsening economic backdrop and exposure to floating interest rates means debt leverage is “significantly above” target. Row back: Ahead of a Capital Markets Day later today, 888 said trading was “broadly in line” since its late October update but said the higher rate of interest on its net debt meant it might look to return to the debt markets to attempt to repay £347m of bank loans which were drawn as part of the William Hill takeover.
Forward not backwards: 888’s “highly disciplined” plans for the next two years will see it hope to achieve leverage of 3.5x net debt/EBITDA by the end of 2025 including debt reduction and debt optimization.
** SPONSOR’S MESSAGE** GiG is a leading gaming platform and sportsbook provider for online and land-based operators with digital aspirations. We deliver a full end-to-end solution through our award-winning iGaming and sportsbook solutions. Built for regulated markets and a top-class customer experience, GiG is pioneering the multi-platform era. If you are looking to expand your operations into new, profitable markets, our strategy is the solution. Find out more at sales@gig.com. Maryland opensData from GeoComply suggest there were 16.5m geo-located transactions during the opening weekend from nearly half-a-million unique accounts. Hail Mary: Maryland enjoyed a “strong start” to its regulated OSB existence over Thanksgiving weekend with the number of transactions being well above previous broadly similar state openings in Colorado, Indiana and Virginia. 🔥Maryland opening compares well with similar states - GeoComply Better than Kansas: The analysts at JMP noted that in the seven days following the soft launch in Maryland, downloads were up 186% YoY compared to a 39% rise in the first week of launch in Kansas.
Download dataBig weekend: The JMP team also looked at wider download trends for week 12 of the NFL season showing total downloads of 713k which is the second biggest week after week 1. In total downloads are up 42% season to date with FanDuel remaining in the lead with 40% market share.
Stock watchFlutter has regained all the ground lost in the spring and summer as it ended yesterday at a 52-week high. Bet boost: The recent good news surrounding FanDuel has helped restore investor confidence in parent company Flutter with the shares closing yesterday at a 52-week high. Notably, according to a notice yesterday shareholder Parvus Asset Management bumped up its investment to 7.2% from 6.8% recently. 🗼Flutter closes at a 52-week high as Parvus buys more Analyst takes – MacauThe two-step: The welcome news of the granting of the concessions for the next 10 years provided momentum to Macau-related stocks yesterday, although the “unclear reopening path” in China provided a “one-step back” element to the equation, said Wells Fargo.
Pay the piper: WF also noted the $12.5bn+ extra investment that will be demanded of licensees in the next concession period. The team at Macquarie said this would include more hotel rooms, non-gaming attractions, or “even investments beyond the SAR”, such as lodging and infrastructure in the Greater Bay Area.
Las VegasThe Searchers: Staying with Macquarie, the team said its monthly Las Vegas survey points to a pick up in hotel searches in the near term with a 7.7% rise in October. They pointed out that this “aligns” with operator commentary during recent Q3 earnings calls and “bodes well” for Q4 as a whole.
Earnings in briefWebis: FY handle was down 9% to $120m for the tote betting operator, with gross profits dropping 12% to $5.1m and net losses coming in at $374k vs. a profit of $824k in 2021. The group said its Cal Expo racetrack in Sacramento recorded “continued growth”. NewslinesGlitnor has “mutually and amicably” called off its acquisition of the affiliate Kafe Rocks citing unstable market conditions. It said the decision had nothing to do with the recent departure of Simon Pilkington as CEO of Kafe Rocks. Glitnor retains a significant stake in the company. Jack Entertainment’s two Ohio properties have opened retail sportsbooks but will not take bets until January 1. The Mohawk Council of Kahnawàke (MCK) has launched a legal challenge against the province of Ontario, arguing that its regulation of gambling is unconstitutional and deprives it of significant revenues. What we’re readingJuve troubles: “The board have stepped down en masse ‘having considered the centrality and relevance of pending legal and accounting issues’,” says the BBC. On socialBeale street CalendarNov 29: 888 Capital Markets Day, Rivalry Q3 Dec 6: The Startup Month #5 Dec 13: Deal Talk #5 Dec 20: Due Diligence #2 Contact
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