Member Info for elmo1512

Revenue only up 2% YoY for FY25, which surely represents market share loss. EBITDA margin of 20% right at the bottom of planned range. As recently as the Q3 trading update they were confident in "delivering Adjusted EBITDA ahead of current market expectations" when consensus was ~362m. It's going to be 355-360 so below that. Will probably be a big drop on open.

In terminal decline though, and at least some of the debt can be sold alongside it.

They'd also lose a successful and profitable chunk of the business and end up even more exposed to the UK market. Short-term good, not sure about long-term.

Trading during covid was massively inflated by revenue driven by circumstance, 888 would never have been so successful in those years without lockdown forcing gamblers to online casino gaming rather than sports betting. Acquisition of WH was a reasonable idea (strong brand, profitable business, not huge overlap in customers or products) but they made some terrible management appointments and interest costs were higher than planned/expected. Turnaround is possible but we need the detail on how they're going to mitigate the duty changes. The CEO statement was unhelpful.

RNS confirms strategic review, similar to the one before the US exit. Expecting this to be the prelude to Italy sale or market exit elsewhere, or disposal of some/all UK retail for example.

They'll all wait as long as possible before actually doing anything, because the one who goes first is risking more. The first one to close a few hundred shops will lose revenue to another set of shops. The first one to cut headcount in the UK will lose people to a competitor. The first one to reduce RTP on slots will lose customers to the ones who don't. And so on.

More consolidation seems pretty certain. Rank look ripe for someone to get hold of for some extra cashflow. Allwyn will be the second-biggest listed group soon and want to expand more betting and gaming. Novibet acquisition does some of that but who's to say they won't buy more, very cash-rich. Betvictor could get swept up by someone. Who knows.

Evoke nominal EV (debt + mcap) is now only just over 1.9bn (assuming debt is about 1.8bn). Rewind only a few months and it was 2.1bn. If you assume a decent chunk of cash can be raised by selling shops, or at least a reasonable chunk of cost will go out, it starts to look more attractive.

Now add in Flutter's geographical split.

Moving entities around but not much impact on people, and they haven't closed any UK offices.

Flutter employ loads of people in the UK?

What is there to sell now? It sounds like they've integrated a lot of the technology, management all changed, it's just the 888 brand assets at this point. The sellable part of the business, if there is one, is UK retail which is impossible to sell while the government have an axe hanging over it.

The big problem is the debt and the timing of the transaction pushing the cost of servicing it higher than planned. The equity is such a small part of the overall EV of the business, and the debt eats up nearly half of the EBITDA every year. No space to invest. But the business appears to be being propped up by WH at this point, 888 was artificially inflated by COVID pushing gamblers away from sports betting and to online gaming. To quote the Q3 update "888 performance continues to be a drag on growth".

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