Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Now 120p target
Investors have been warming to the company in recent weeks and Tuesday's acquisition of remote online gaming operator Roxy Palace for £8.4m can only be supportive of the investment case. The consideration is being satisfied by issuing 10m new 32Red shares at 64p each, or 10.6 per cent of the enlarged share capital, and £2m in cash from 32Red's net funds of £7m at the end of 2014. The new shares being issued have a 12-month lock-in. Roxy generated cash profit of £1.6m on gaming revenue of £10.1m in 2014, so the exit multiple is a reasonable five times cash profits. Moreover, as 32Red's chief executive Ed Ware rightly points out the acquisition fits well with his company's regulated markets growth strategy and will allow the business to leverage the expertise that the Roxy team has built up over many years in international markets to the combined benefit of the enlarged business. Synergy benefits and cost savings are likely to be significant through the cooperative marketing of both company's brands across a number of territories. In fact, analyst Ivor Jones at house broker Numis Securities believes that the net cash profit contribution from the acquisition will be £500,000 in the 2015 fiscal year, rising to £2.5m in 2016 (calendar year-end). On that basis, and after adjusting for the impact of the UK Point of Consumption duty, Numis forecasts that 32Red will deliver pre-tax profit of £5.1m and EPS of 5.9p in the current financial year on revenue of £42.5m, rising to £8m and 8.8p, respectively, on revenue of £55.4m in 2016. That represents a thumping 28 per cent upgrade on Numis's previous 2016 EPS estimate and is enough to warrant Mr Jones revising his target price on the shares up by a third to 120p. On the basis that the shares are currently being rated on only 10 times fiscal 2015 cash-adjusted earnings, falling to seven times 2016's likely cash adjusted earnings, I can see ample scope for the re-rating to continue especially as 32Red is proving to be a highly profitable operator in the new regulative regime. It's also worth noting that Mr Jones expects 32Red's board to declare a dividend per share of 2.5p this year and 2.75p in 2016, so the prospective dividend yields are 3.7 per cent and 4.1 per cent, respectively. Trading on a bid-offer spread of 66p to 67.5p, I rate 32Red's shares a decent buy and have an upgraded target price range of 90p ahead of the company's first-half trading update on Wednesday, 22 July.
well! well! well! Roxy Palace Casino (Red Ed and Foxy Roxy) Lol Hope i get my stake monies worth.
Great acquisition . Would add more if had more cash.
..."32Red will announce its half year trading update on 22 July 2015."
& Voila, as if by magic....there is the predicted takeover...LoL :-D http://www.gamingintelligence.com/manda/32921-32red-acquires-roxy-palace-online-casino-for-8-4m
There was a weekend article regarding t/o bid by 888 cannot remember who they were after, not us but another gaming site. So that is probs why we are going up in SP.
...next stop the Takeover shop?
Online casino operator 32Red (TTR:AIM) has fallen 4.1% to 62p since we added it as a Play on 26 March as investors got spooked about the possibility of a Labour government cracking down on gambling companies. Now that uncertainty has passed we think the shares will start to rise again. 32Red increased its pre-tax profit by 49% to £3.4 million in 2014 and it is forecast to grow to £4.6 million in 2015, excluding the Italian business. With £7 million of cash and no borrowings, it plans to acquire its weaker rivals who are struggling to cope with the new UK Point of Consumption tax. The group held back on marketing in Italy ahead of regulatory changes introduced at the end of 2014 but it still managed to grow revenue by 74% to £1.1 million. It is ramping up its marketing efforts this year which should lead to further growth. The stock trades on a reasonable forward earnings multiple of 8.8 and pays a dividend of around 4%. Numis’ target price is 90p, implying upside of 45%.
on tv are good too
80p 90p should be heading this way now profit takers have gone.
More shares traded in first 30mins that normal average day.
15% this morning, nice.
Maybe Friday's Motley Fool article was well read over the weekend & people are piling in. It was oversold anyway, should be over 70p IMO.
That we don't know ?? Sell: 63.00pBuy: 63.00p6.00p (10.71%)
up & away
I'm not a fan of them either but they have enough followers who buy into their story to make the SP move. GLA.
Don't forget the Golden Rules: 1) He who has the gold, makes the rules 2) Don't lose money 3) See rule 2 4) When the Motley Fool tips a stock, it's a good time to sell, or at least get your dog to back up the recommendation before you act on it.
Been looking at these awhile first time in here gla
Recommends as best Gaming stock. http://www.fool.co.uk/investing/2015/05/15/should-you-take-a-punt-on-these-gaming-companies-32red-plc-ladbrokes-plc-bwin-party-digital-entertainment-plc-888-holdings-public-limited-company-and-betfair-group-ltd/#
Too pessimistic. Nearly back to60 already!
This is one of AIM real deals. We get these little shakedowns and per the Naked Traders advice. Buy and Buy and never sell. Had a top up at 53p. They will be back around 60p plus in weeks or a few months at worse. Cant make many easy returns returns like this very often. Good luck Folks.
Just did just that! I can see no reason for the recent drop, my assessment of this company remains unchanged from when I first bought in. As the Sage of Omaha famously said, when hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. I'm tucking in!
I think the forest (rather than a tree) has been shaken on this one, down another 10% today.
Hi all I appreciate that there is an election looming (with no clear winner) and that May is general the time for a bit of a sell off pre summer but is there any rational reason for the recent drop in share price considering how well the company is performing? Thanks B