While the company’s shares did respond positively to news of the PartyGaming Bwin proposed merger we still believe they fail to reflect the potential of further M&A activity in the online gaming space which should gather momentum over the next 12-18 months. Furthermore we do not think that the shares factor an appropriate valuation.
SIMON DAVIES| COLLINS STEWART
We are leaving our 2010 forecasts unchanged, although we expect the firm to come in modestly ahead. Trading into the first quarter has been relatively strong [with no obvious World Cup hangover on sports betting] and guidance for 2011 is unchanged – the key risks, as previously, remain regulatory change in its core markets of Greece, Turkey, Spain.
KARL BURNS | SHORE CAPITAL
The group reported a strong performance from the World Cup with £50m staked during the tournament, with an aggregate margin in excess of 17 per cent ahead of our expectations. We continue to believe sportingbet will participate in industry consolidation, with further growth in sports betting. therefore trading on a price to earnings ratio of 10 times, EV/EBITDA of six times, with a dividend yield of around two per cent, we reiterate our ‘Buy’ recommendation.