888 / William Hill

[Tara]

Does anyone own these or have any view on them?

There has been a large stake purchased recently by FS Gaming, an investor group that includes former GVC/Entain CEOs Kenny Alexander and Shay Segev. Activist investor HG Vora Capital has also taken a large stake in 888 and they have given their support to FS Gaming and the former Entain CEOs. Talks between the two sides are ongoing and the Chairman of 888 is reported to have met with representatives from FS Gaming last week. Presumably FS Gaming want to take control.

The FT says that the investor group thinks that 888 is undervalued. It does seem to be very undervalued on some metrics in comparison to its main competitors Entain and Flutter. Both of these trade at about 2x Revenue while 888 trades at about 0.25x Revenue. The company is also aiming for an eps of over 35p in 2025 for a prospective PE of less than 3. The debt taken on as a result of the recent William Hill acquisition also seems to be quite manageable and the priority is to reduce it as quickly as possible.

[Whatsitworth]

I almost pulled the trigger on these at 52p but just couldn’t get past the debt. Very cash generative, the whole sector is. My biggest issue though is regulation/fines. There’s always one round the corner.

[kempiejon]

I almost pulled the trigger on these at 52p but just couldn’t get past the debt. Very cash generative, the whole sector is. My biggest issue though is regulation/fines. There’s always one round the corner.

Having not much cared about the ethics of my investing, I have baccy, booze and bombs in the port,I've followed some quite damning evidence that some gambling companies are running sharp practices and could imagine regulation being applied. But I expect much like booze and fags the tax is an incentive for the governement not to prohibit just control.
I don't own any bookies but occasionally consider it.

[Tara]

I almost pulled the trigger on these at 52p but just couldn’t get past the debt. Very cash generative, the whole sector is. My biggest issue though is regulation/fines. There’s always one round the corner.

Well they expect to have the debt below 3.5x EBITDA by 2025, and the recent White Paper seems to have been fairly well received by all of the big companies in the industry.

If FS Gaming are successful with their plan, and Kenny Alexander takes over as CEO, there could be a very big rerating of the shares.

He is the man who turned GVC from a small AIM share in to Entain.

[Whatsitworth]

I almost pulled the trigger on these at 52p but just couldn’t get past the debt. Very cash generative, the whole sector is. My biggest issue though is regulation/fines. There’s always one round the corner.

Having not much cared about the ethics of my investing, I have baccy, booze and bombs in the port,I've followed some quite damning evidence that some gambling companies are running sharp practices and could imagine regulation being applied. But I expect much like booze and fags the tax is an incentive for the governement not to prohibit just control.
I don't own any bookies but occasionally consider it.

I once dated a bird who worked in a bookies. If they ran a legit operation they’d of closed down within a year.

[Whatsitworth]

I almost pulled the trigger on these at 52p but just couldn’t get past the debt. Very cash generative, the whole sector is. My biggest issue though is regulation/fines. There’s always one round the corner.

Well they expect to have the debt below 3.5x EBITDA by 2025, and the recent White Paper seems to have been fairly well received by all of the big companies in the industry.

If FS Gaming are successful with their plan, and Kenny Alexander takes over as CEO, there could be a very big rerating of the shares.


He is the man who turned GVC from a small AIM share in to Entain.

That would be the dream scenario. Hopefully they can pull it off.

[AndyPandy]

Well they expect to have the debt below 3.5x EBITDA by 2025, and the recent White Paper seems to have been fairly well received by all of the big companies in the industry.

If FS Gaming are successful with their plan, and Kenny Alexander takes over as CEO, there could be a very big rerating of the shares.


He is the man who turned GVC from a small AIM share in to Entain.

That would be the dream scenario. Hopefully they can pull it off.

That deal is dead in the water now:

https://www.investegate.co.uk/announcement/rns/888-holdings-di---888/termination-of-discussions-with-fs-gaming/7633846

888 has pulled the rug on discussions to try and distance itself from HMRC investigations into GVC. It's backfired somewhat as the GB Gambling Commission now also wants to investigate 888. All this has triggered a 25% drop in 888's share price. With such a large interest Bill to cover, any licence suspension must mean curtains for 888 surely? Hopefully that also means that the GBGC will think very, very carefully about pulling the plug if shenanigans are found. That's a lot of Gambling tax to lose, and (apparently) 11,000 global employees (888 LinkedIn page).

Andy
No position, more by luck than judgement as sold out after the rally in June.