Intertain reassures investors with revenue rise

Intertain reassures investors with revenue rise

Wednesday, November 9, 2016
Impact of sterling falls hurts earnings prospects

Intertain chief executive Andy McIver said he hoped the company’s third-quarter revenues would allay fears over the health of the company after a share price slump since it confirmed it would be moving its primary listing to London.

The currently Toronto-listed entity has seen its stock price drift down from around the CAD$12 mark to just over CAD$7 within the past two months. The company confirmed it would be switching to a London listing in September under the corporate name Jackpotjoy, its major online bingo brand. It said the move would be completed in mid-October, however it is yet to come to pass.

The third quarter results help produce a share price rebound, up to around CAD$8.59. For the three months to September, total revenues rose 10% to CAD$113.5m while operating cash flows for the period came in at between CAD$30m and CAD$32m.

In the nine-month period total revenues rose 18% on a pro-forma basis to CAD$357m. Average active player numbers stood at 231,000, an 11% increase over the same period last year.

McIver said the figures were confirmation of the “high quality” of the company’s core assets, which include the Costa Bingo, Vera & John and InterCasino brands, particularly given the degree to which the fall in the value of sterling has affected results. Much of Intertain’s revenues are derived from the UK but it still at present reports in Canadian dollars.

McIver added: “We are working hard to complete the listing of the ordinary shares of Jackpotjoy in London and these strong preliminary results also support our continued belief in our UK-centred strategic initiatives, including the London listing.”

The company warned, however, that its guidance for the full year was likely to come in at the low end of expectations given the fall in the pound. This would suggest revenues in the region of $460m and total adjusted EBITDA of around $175m.

Intertain will release its full third-quarter revenues figures next week.

Totally Gaming says: The slide in the value of the pound is the likeliest cause of the share price slide, and this will be mitigated once the company finally completes its listing in London. Other issues do, however, cloud the horizon such as the possibility of a ban on daytime TV gambling ads in the UK – Jackpotjoy is a big player here – and the move to tax bonuses as part of revenue which will come into force next year.

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