Aspire Global - Revision history

95.149.241.133 at 15:54, 3 September 2022

2022-09-03T15:54:21Z

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	{{~~Logo~~ Image\|[[File:~~Aspire image~~.jpg~~\|alt=Aspire image\|thumb\|Aspire image~~]]}}		{{Cover Image\|[[File:IStock-1220881440-scaled.jpg]]}}

	{{~~Cover~~ Image\|[[File:~~IStock-1220881440-scaled~~.jpg]]}}		{{Logo Image\|[[File:Aspire image.jpg\|thumb\|200x200px]]}}

	== Summary<ref name=":0">Source: Edison Investment Research.</ref> ==		== Summary<ref name=":0">Source: Edison Investment Research.</ref> ==

>Mehtabahmed at 20:20, 2 September 2022

2022-09-02T20:20:50Z

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>Mehtabahmed at 20:08, 2 September 2022

2022-09-02T20:08:25Z

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95.149.241.133: Undo revision 53238 by 95.149.241.133 (talk)

2022-08-31T23:31:06Z

Undo revision 53238 by 95.149.241.133 (talk)

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95.149.241.133 at 23:30, 31 August 2022

2022-08-31T23:30:11Z

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	{{Cover Image\|[[File:IStock-1220881440-scaled.jpg]]}}		{{Cover Image\|[[File:IStock-1220881440-scaled.jpg]]}}

	~~{{Logo Image\|[[File:Aspire image.jpg\|alt=Aspire image\|thumb\|Aspire image]]}}~~

	== Summary<ref name=":0">Source: Edison Investment Research.</ref> ==		== Summary<ref name=":0">Source: Edison Investment Research.</ref> ==

Manos at 23:29, 31 August 2022

2022-08-31T23:29:13Z

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	== Summary<ref name=":0">Source: Edison Investment Research.</ref> ==		== Summary<ref name=":0">Source: Edison Investment Research.</ref> ==
	Aspire Global (AG) is an online gaming technology, services and content company that offers its customers, online gaming operators, everything that is required to operate a successful iGaming brand. The global online gaming market is experiencing structural growth and AG’s leading technology and services help customers manage the many operational and regulatory complexities of online gaming, while minimising their investment and mitigating their increasing cost pressures. Its success is apparent in its increasing geographic presence (26 markets) and roster of leading online gaming brands. AG is trading at a significant discount to its larger peers; our DCF-based valuation points to a share price of SEK95.		Aspire Global (AG) is an online gaming technology, services and content company that offers its customers, online gaming operators, everything that is required to operate a successful iGaming brand. The global online gaming market is experiencing structural growth and AG’s leading technology and services help customers manage the many operational and regulatory complexities of online gaming, while minimising their investment and mitigating their increasing cost pressures. Its success is apparent in its increasing geographic presence (26 markets) and roster of leading online gaming brands. AG is trading at a significant discount to its larger peers; our DCF-based valuation points to a share price of SEK95.
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	AG is trading at a significant discount to the majority of its peers. Its EV/EBIT multiple for FY21 of 10.2x is a 63% discount to an adjusted average of peers, and the P/E of 11.3x is a 74% discount to the adjusted average. A DCF-based valuation with a WACC of 9% and terminal growth of 2% suggests a share price of SEK95. As AG’s scale increases, Edison Investment Research would expect the valuation gap to its larger peers to narrow.		AG is trading at a significant discount to the majority of its peers. Its EV/EBIT multiple for FY21 of 10.2x is a 63% discount to an adjusted average of peers, and the P/E of 11.3x is a 74% discount to the adjusted average. A DCF-based valuation with a WACC of 9% and terminal growth of 2% suggests a share price of SEK95. As AG’s scale increases, Edison Investment Research would expect the valuation gap to its larger peers to narrow.

	==Investment summary<ref name=":0" />==		==Investment summary<ref name=":0" />==

103.126.60.198 at 12:37, 15 August 2022

2022-08-15T12:37:59Z

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	[[Category:Thesis]]		[[Category:Thesis]]
	[[Category:Equities]]		[[Category:Equities]]

			__INDEX__

109.180.50.163 at 22:52, 13 August 2022

2022-08-13T22:52:38Z

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			== Summary<ref name=":0">Source: Edison Investment Research.</ref> ==
	Aspire Global (AG) is an online gaming technology, services and content company that offers its customers, online gaming operators, everything that is required to operate a successful iGaming brand. The global online gaming market is experiencing structural growth and AG’s leading technology and services help customers manage the many operational and regulatory complexities of online gaming, while minimising their investment and mitigating their increasing cost pressures. Its success is apparent in its increasing geographic presence (26 markets) and roster of leading online gaming brands. AG is trading at a significant discount to its larger peers; our DCF-based valuation points to a share price of SEK95.		Aspire Global (AG) is an online gaming technology, services and content company that offers its customers, online gaming operators, everything that is required to operate a successful iGaming brand. The global online gaming market is experiencing structural growth and AG’s leading technology and services help customers manage the many operational and regulatory complexities of online gaming, while minimising their investment and mitigating their increasing cost pressures. Its success is apparent in its increasing geographic presence (26 markets) and roster of leading online gaming brands. AG is trading at a significant discount to its larger peers; our DCF-based valuation points to a share price of SEK95.

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	AG is trading at a significant discount to the majority of its peers. Its EV/EBIT multiple for FY21 of 10.2x is a 63% discount to an adjusted average of peers, and the P/E of 11.3x is a 74% discount to the adjusted average. A DCF-based valuation with a WACC of 9% and terminal growth of 2% suggests a share price of SEK95. As AG’s scale increases, Edison Investment Research would expect the valuation gap to its larger peers to narrow.		AG is trading at a significant discount to the majority of its peers. Its EV/EBIT multiple for FY21 of 10.2x is a 63% discount to an adjusted average of peers, and the P/E of 11.3x is a 74% discount to the adjusted average. A DCF-based valuation with a WACC of 9% and terminal growth of 2% suggests a share price of SEK95. As AG’s scale increases, Edison Investment Research would expect the valuation gap to its larger peers to narrow.

	==Investment summary==		==Investment summary<ref name=":0" />==

	===Company description: iGaming infrastructure and services===		===Company description: iGaming infrastructure and services===
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	AG’s revenue sharing model makes it closely aligned with the fortunes of its operator customers and the geographies in which they operate. The gaming industry is highly competitive, as is the market for AG’s products and services, and regulatory risk is high for operators. To grow geographically and develop its product offer, AG must continue to invest to remain competitive in a rapidly changing industry, through a combination of internal investment and M&A, which have execution and integration risks.		AG’s revenue sharing model makes it closely aligned with the fortunes of its operator customers and the geographies in which they operate. The gaming industry is highly competitive, as is the market for AG’s products and services, and regulatory risk is high for operators. To grow geographically and develop its product offer, AG must continue to invest to remain competitive in a rapidly changing industry, through a combination of internal investment and M&A, which have execution and integration risks.

	==Company description: Online gaming infrastructure==		==Company description: Online gaming infrastructure<ref name=":0" />==

	AG is an online gaming technology, managed services, and content company with two main reportable business segments – B2B and B2C – that target different parts of the iGaming value chain. The names of the segments denote the main customers served and, by definition, the products offered.		AG is an online gaming technology, managed services, and content company with two main reportable business segments – B2B and B2C – that target different parts of the iGaming value chain. The names of the segments denote the main customers served and, by definition, the products offered.
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	In FY20, AG’s source of revenue on a reported basis (not including the full effect of the recent Sports acquisition, which has greater exposure to Africa and Latin America) was: the Nordics €16.4m (10% of total), UK and Ireland €35.1m (22%), rest of Europe €98.2m (61%) and rest of world €12.2m (8%).		In FY20, AG’s source of revenue on a reported basis (not including the full effect of the recent Sports acquisition, which has greater exposure to Africa and Latin America) was: the Nordics €16.4m (10% of total), UK and Ireland €35.1m (22%), rest of Europe €98.2m (61%) and rest of world €12.2m (8%).

	==Business overview==		==Business overview<ref name=":0" />==

	The players are individuals who visit the operator’s site to game.		The players are individuals who visit the operator’s site to game.
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	B2C’s revenue (GGR) has grown in every financial year since FY20 and net revenue, ie after VAT, has grown at a slightly lower CAGR of 12%, which reflects increasing exposure to regulated markets where taxes tend to be higher. In our forecasts Edison Investment Research assumes low single-digit growth for the number of active users and c 5% growth for average revenue per user, producing 7% growth in total. Our forecasts assume a stable EBITDA margin of 12.1%.		B2C’s revenue (GGR) has grown in every financial year since FY20 and net revenue, ie after VAT, has grown at a slightly lower CAGR of 12%, which reflects increasing exposure to regulated markets where taxes tend to be higher. In our forecasts Edison Investment Research assumes low single-digit growth for the number of active users and c 5% growth for average revenue per user, producing 7% growth in total. Our forecasts assume a stable EBITDA margin of 12.1%.

	==Online gaming markets==		==Online gaming markets<ref name=":0" />==

	According to H2 Gambling Capital (H2GC), the online gaming regions in which AG currently has a presence, albeit some are in the early stages of development, are expected to grow GGR from c US$37.6bn in FY19 to US$69.1bn by 2025e.		According to H2 Gambling Capital (H2GC), the online gaming regions in which AG currently has a presence, albeit some are in the early stages of development, are expected to grow GGR from c US$37.6bn in FY19 to US$69.1bn by 2025e.
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	As a market becomes regulated, typically the costs of operating in that market increase due to, for example tighter compliance requirements, greater controls on marketing and ensuring responsible gaming to protect the consumer. Use of AG’s platform or services helps customers mitigate these cost pressures. Management aims to have a presence in the majority of regulated markets through a combination of acquisitions and organic product investment.		As a market becomes regulated, typically the costs of operating in that market increase due to, for example tighter compliance requirements, greater controls on marketing and ensuring responsible gaming to protect the consumer. Use of AG’s platform or services helps customers mitigate these cost pressures. Management aims to have a presence in the majority of regulated markets through a combination of acquisitions and organic product investment.

	==Management==		==Management<ref name=":0" />==

	AG’s executive team consists of seven members, including the CEO and CFO. The CEO reports directly to a five-member board. Many of the board are substantial shareholders.		AG’s executive team consists of seven members, including the CEO and CFO. The CEO reports directly to a five-member board. Many of the board are substantial shareholders.

	Tsachi Maimon – CEO: Tsachi Maimon has been the CEO of AG since 2013 and a board member since 2015. He is also a board member of AG’s associate holdings NeoLotto, Minotauro and MarketPlay. Tsachi was previously head of casino at TNT Marketing, and a call centre manager at Cellcom, one of Israel’s largest telecom companies.		'''Tsachi Maimon – CEO:''' Tsachi Maimon has been the CEO of AG since 2013 and a board member since 2015. He is also a board member of AG’s associate holdings NeoLotto, Minotauro and MarketPlay. Tsachi was previously head of casino at TNT Marketing, and a call centre manager at Cellcom, one of Israel’s largest telecom companies.

	Motti Gil – CFO: Motti Gil has been CFO of AG since 2016 and the CO of Responsible Gaming since 2018. Prior to joining AG, Motti held senior roles at technology start-ups and public companies including CFO of GoNet Systems and VP of finance and CFO of IXI Mobile.		'''Motti Gil – CFO:''' Motti Gil has been CFO of AG since 2016 and the CO of Responsible Gaming since 2018. Prior to joining AG, Motti held senior roles at technology start-ups and public companies including CFO of GoNet Systems and VP of finance and CFO of IXI Mobile.

	Carl Klingberg – chairman: Carl Klingberg has been chairman of the board of AG since 2017. He is also chairman of Mackmyra Svensk Whisky, Strömsta Säteri, DHS Venture Partners, Pay & Pray and Rotheca Invest and board member of Scandinavian WeldTech Holding. Carl’s prior roles include CEO of Scandinavia Online, SOL Content, MD of bwin Games, chairman of Heads Svenska and board member of Avanza Fondkomission.		'''Carl Klingberg – chairman:''' Carl Klingberg has been chairman of the board of AG since 2017. He is also chairman of Mackmyra Svensk Whisky, Strömsta Säteri, DHS Venture Partners, Pay & Pray and Rotheca Invest and board member of Scandinavian WeldTech Holding. Carl’s prior roles include CEO of Scandinavia Online, SOL Content, MD of bwin Games, chairman of Heads Svenska and board member of Avanza Fondkomission.

	Barak Matalon – founder of the company and board member: Barak Matalon has been a board member since 2005 and his other current roles include board member of NeoGames and AG’s associate, NeoLotto. His previous roles include VP of sales and marketing at NCP, the Israeli broadcasting channel and sales director at Internet Gold. Barak is AG’s largest shareholder.		'''Barak Matalon – founder of the company and board member:''' Barak Matalon has been a board member since 2005 and his other current roles include board member of NeoGames and AG’s associate, NeoLotto. His previous roles include VP of sales and marketing at NCP, the Israeli broadcasting channel and sales director at Internet Gold. Barak is AG’s largest shareholder.

	Fredrik Burvall – board member: Fredrik Burvall has been on the board since 2017. Other current roles include chairman of Speqta and M.O.B.A Network, board member of Gambling.com Group and Enteractive and CEO and board member of The Networked Nation. Fredrik’s prior roles include CEO of Cherry and deputy board member of Bell Maritime Gaming.		'''Fredrik Burvall – board member:''' Fredrik Burvall has been on the board since 2017. Other current roles include chairman of Speqta and M.O.B.A Network, board member of Gambling.com Group and Enteractive and CEO and board member of The Networked Nation. Fredrik’s prior roles include CEO of Cherry and deputy board member of Bell Maritime Gaming.

	Aharon Aran – board member: Aharon Aran has been a board member since 2018 and is currently CEO of the Israeli Audience Research Board, and a board member of NeoGames. Prior roles include CEO of TMF Media Group, Omnicom Media Group (Israel office), Schoken Group, Hadashot, VP of marketing of Elite Confectionery Group and EVP of Yedioth Ahronoth Media Group, Reshet TV- Ch.22 and TV Channel 10.		'''Aharon Aran – board member:''' Aharon Aran has been a board member since 2018 and is currently CEO of the Israeli Audience Research Board, and a board member of NeoGames. Prior roles include CEO of TMF Media Group, Omnicom Media Group (Israel office), Schoken Group, Hadashot, VP of marketing of Elite Confectionery Group and EVP of Yedioth Ahronoth Media Group, Reshet TV- Ch.22 and TV Channel 10.

	==Sensitivities==		==Sensitivities<ref name=":0" />==

	Edison Investment Research highlights below what it feels are the key sensitivities for AG’s businesses.		Edison Investment Research highlights below what it feels are the key sensitivities for AG’s businesses.
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	* Forex: most of AG’s operating costs are in euros but as it seeks to grow more globally, there may be an increasing currency mismatch between revenues and costs.		* Forex: most of AG’s operating costs are in euros but as it seeks to grow more globally, there may be an increasing currency mismatch between revenues and costs.

	==Valuation==		==Valuation<ref name=":0" />==

	===Peer comparison===		===Peer comparison===
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	Edison Investment Research has also performed a DCF analysis with 5% annual revenue growth for three years beyond our explicit forecast period, followed by 2% annual growth thereafter. Edison Investment Research assumes a stable EBITDA margin beyond our forecast period of 18.8%. Using a WACC of 9.0% and terminal growth of 2% produces a value per share of SEK95. For FY21, our core DCF valuation of SEK95 would equate to an EV/EBIT multiple of 16.0x, P/E of 17.7x, and dividend yield of 2.0%, still comparing favourably with the above peers.		Edison Investment Research has also performed a DCF analysis with 5% annual revenue growth for three years beyond our explicit forecast period, followed by 2% annual growth thereafter. Edison Investment Research assumes a stable EBITDA margin beyond our forecast period of 18.8%. Using a WACC of 9.0% and terminal growth of 2% produces a value per share of SEK95. For FY21, our core DCF valuation of SEK95 would equate to an EV/EBIT multiple of 16.0x, P/E of 17.7x, and dividend yield of 2.0%, still comparing favourably with the above peers.

	==Financials==		==Financials<ref name=":0" />==

	===Income statement: Improving profitability===		===Income statement: Improving profitability===
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	At the end of FY20, the most significant near-term liability was the April 21 bond maturity and accrued interest of €27.9m, which is being funded as highlighted above. In addition, there was total deferred and contingent consideration for recent acquisitions with repayment dues of €4.8m in FY21 and €17.7m in FY23, shown in the cash flow above.		At the end of FY20, the most significant near-term liability was the April 21 bond maturity and accrued interest of €27.9m, which is being funded as highlighted above. In addition, there was total deferred and contingent consideration for recent acquisitions with repayment dues of €4.8m in FY21 and €17.7m in FY23, shown in the cash flow above.

			== References and notes ==
	[[Category:Thesis]]		[[Category:Thesis]]
	[[Category:Equities]]		[[Category:Equities]]

109.180.50.163: Undo revision 21622 by 109.180.50.163 (talk)

2022-08-13T22:50:33Z

Undo revision 21622 by 109.180.50.163 (talk)

← Older revision		Revision as of 23:50, 13 August 2022
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	~~== Summary ==~~		Aspire Global (AG) is an online gaming technology, services and content company that offers its customers, online gaming operators, everything that is required to operate a successful iGaming brand. The global online gaming market is experiencing structural growth and AG’s leading technology and services help customers manage the many operational and regulatory complexities of online gaming, while minimising their investment and mitigating their increasing cost pressures. Its success is apparent in its increasing geographic presence (26 markets) and roster of leading online gaming brands. AG is trading at a significant discount to its larger peers; our DCF-based valuation points to a share price of SEK95.

	~~Aspire~~		'''Well positioned for greater geographic scale'''

			Following recent acquisitions giving AG a presence across most parts of the iGaming value chain, management’s current strategy has four key pillars: a stronger product offer, organic growth, M&A, and geographic expansion. The aim is to expand its scalable platforms into more markets and increase the number of customers per market, organically and via the acquisition of complementary companies to enhance the offer. AG looks well placed to benefit from the structural growth drivers, and regulatory and operational issues facing its customers. The United States is a particular area of focus.

			'''FY21: Improving profitability and cash flow'''

			Edison Investment Research forecasts EBITDA growth of 15% (pro forma) in FY21, and 17% in FY22. Our forecast for EBITDA of €32.8m (using AG’s definition) in FY21 is greater than management’s longstanding (December 2018) guidance of €32.0m due to recent higher-margin acquisitions. Edison Investment Research expects improving free cash flow due to higher profitability while investment levels relative to revenue are maintained. The company has a robust balance sheet with limited net debt (€5.2m) excluding minimal IFRS 16 leases. Its improving financial position could enable the restoration of the dividend in FY21, following a period of M&A.

			'''Valuation: Well below peers'''

			AG is trading at a significant discount to the majority of its peers

109.180.50.163 at 20:12, 11 August 2022

2022-08-11T20:12:29Z

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	Aspire Global (AG) is an online gaming technology, services and content company that offers its customers, online gaming operators, everything that is required to operate a successful iGaming brand. The global online gaming market is experiencing structural growth and AG’s leading technology and services help customers manage the many operational and regulatory complexities of online gaming, while minimising their investment and mitigating their increasing cost pressures. Its success is apparent in its increasing geographic presence (26 markets) and roster of leading online gaming brands. AG is trading at a significant discount to its larger peers; our DCF-based valuation points to a share price of SEK95.		== Summary ==

	~~'''Well positioned for greater geographic scale'''~~		Aspire

	Following recent acquisitions giving AG a presence across most parts of the iGaming value chain, management’s current strategy has four key pillars: a stronger product offer, organic growth, M&A, and geographic expansion. The aim is to expand its scalable platforms into more markets and increase the number of customers per market, organically and via the acquisition of complementary companies to enhance the offer. AG looks well placed to benefit from the structural growth drivers, and regulatory and operational issues facing its customers. The United States is a particular area of focus.

	~~'''FY21: Improving profitability and cash flow'''~~

	Edison Investment Research forecasts EBITDA growth of 15% (pro forma) in FY21, and 17% in FY22. Our forecast for EBITDA of €32.8m (using AG’s definition) in FY21 is greater than management’s longstanding (December 2018) guidance of €32.0m due to recent higher-margin acquisitions. Edison Investment Research expects improving free cash flow due to higher profitability while investment levels relative to revenue are maintained. The company has a robust balance sheet with limited net debt (€5.2m) excluding minimal IFRS 16 leases. Its improving financial position could enable the restoration of the dividend in FY21, following a period of M&A.

	~~'''Valuation: Well below peers'''~~

	~~AG is trading at a significant discount to the majority of its peers~~