(MENAFN- ProactiveInvestors) Playtech (): FY14 Results
Market Cap: £2166m; Current Price: 738p
Record FY14; Healthy start to FY15 Strong performance in FY14 where revenue was +24% to a record €457m and toward the top end of consensus forecasts. This was on the back of its core casino product growing 29% YoY though sport was the standout performer in terms of growth +54% YoY and encouraging to see as it implies Mobenga and Geneity are performing well. EBITDA was +30% YoY to €207m again toward the top end of consensus range and a final dividend of €17.5c taking the total dividend to €26.4c marginally ahead of expectations. Current trading looks healthy where the momentum from FY14 continued into FY15. Daily average revenue for the first 8 weeks was +22% YoY and +5% on a strong 4Q14 this does however include some FX tailwind. Consensus has c. 5% revenue growth pencilled in for FY15 and given the strong start at +22% this we expect increases to forecast down the road. A key catalyst for the business in our view is the deployment of its cash pile which stood at €692m as at the end of December 2014 and prior to the recent Yoyo acquisition.
NORTHLAND CAPITAL PARTNERS VIEW: The business continues to grow and its flagship casino product the largest revenue contributor continues to lead the way. The business has a significant war chest of almost €700m of cash with which to continue to grow and the deployment of this cash is a key catalyst for us. Entry multiple is toward the top end of the London listed peer group range at 12.3x FY15 consensus EBITDA and offers investors a c.2.5% dividend yield.
(): Final Results
Market Cap: £4260m; Current Price: 420p
Slightly ahead of consensus Adjusted EPS for FY14 slightly ahead of consensus at 17.7p and a final dividend of 4.2p (full year of 6.2p) which looks in-line with expectations and at the lower end of the pay-out ratio of 35%-40%. Operating profit for FY14 was £411m at the top end of the range set at the time of the pre-close update of £407m - £411. The outlook looks positive at management expects another year or growth however l-f-l growth will be tough to maintain against a strong FY14 particularly in the 1H14. Although seasonally quiet attractions are performing in line with expectations.
NORTHLAND CAPITAL PARTNERS VIEW: Following on from a positive pre-close before year end the business finished off FY14 strongly at the top end of expectations. The share price has performed well since pre-close +13% and now trades on and EV/EBITDA multiple of 12.9x FY14 falling to 11.9x FY15 which isn’t particularly undemanding in our view and management appear cautious on FY15 in the outlook statement.
StratMin Global Resources () – BUY: Exploration update
Market Cap: £6m; Current Price: 4.8p; Target Price: 14.7p
From Yesterday: Additional graphite prospects investigated StratMin has reported initial results from its exploration programme at the Mahefadok Mahela and Ambatofafana prospects located in the Southern part of the Loharano property. At the Mahefadok prospect graphite was discovered over a strike of 2km with trench samples including 3.2m at 4.5% TGC and 1.5m at 4.48% TGC. At the Mahela prospect grab samples returned results up to 6.9% TGC and at Ambatofafana up to 11% TGC. Further exploration is now planned to include drilling at the Mahefadok prospect and pitting and trenching at the Mahela and Ambatofafana prospects. No change to forecasts or price targets.
NORTHLAND CAPITAL PARTNERS VIEW: While it is positive that StratMin has other areas of graphite mineralisation within its licence we would prefer to see its exploration budget kept to a minimum with funds focused on increasing production and generating returns. StratMin already has a mine life of c. 10 years based on existing resources and proving up further resources in the near term adds little near term value compared to increased production levels. Defining increasingly larger and larger graphite resources that add no real value to shareholders has become a major issue for the listed graphite industry. The limited size of the current graphite market (c. 1.2mt) that is currently over supplied and lack of near term growth prospects (lithium ion batteries and fuel cells are several years from wide scale deployment probably longer with the fall in the oil price and graphene has a long way to go before reaching commerciality) means that massive deposits are unlikely to produce the large volumes quoted in PEA’s and PFS’s of several listed companies without causing prices to crash and putting themselves out of business. We continue to favour StratMin as it is in production with a proven product that is being purchased by an offtake partner. The Company is expected to grow its production over the coming years to around 18000t which won’t flood the global market but should ensure the Company is profitable and cash generative even if prices continue to weaken.
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