Steady growth
H1 2023 consolidated results
12 September 2023
- The company announced a GSM on 18.09.2023 where a decision for share buyback will be proposed under the following terms: price range BGN 14- 17, deadline – 31.12.2024, maximum amounts – 3% of the issued shares p.a.
- Telematic Interactive Bulgaria AD reported 22.6% revenue growth for H1 YoY reaching BGN 56.9mln. Casino revenues take the lion’s share of BGN 50.1mln or 88.0% of the total after an impressive 22.6% YoY growth. Sports-betting reached BGN 4.2mln, which marked a slight decrease, but that was due to the migration to a new sports-betting platform in Q2. The new platform has better functionalities and is expected to have a positive role in growing this business in the future. Still, this line accounts for 7.4% of the total revenues.
- The remaining 4.6% is revenues from providing gaming content to B2B customers, which grew at 28.3%. The significant jump of this business line is explained by its comparatively small size, but the company has strong expectations for its potential. This account also makes the major difference between the individual and consolidated revenues.
- The main reason behind the increasing revenues is the increased monthly average active clients. The new CRM system, as well as staff training towards a more individually targeted approach, has lead to a 32% increase in this metric, to reach a total of 94,495 active clients per month. The conversion rate has stayed at the previously reported levels of 36% and the churn rate still stays at impressive for the industry levels of 4%.
- OPEX increased proportionately a notch more than sales – by 22.7% to BGN 43.2mln. Of that, the biggest contributors are the employee cost, which increased 48.8% to reach BGN 4.4mln. External services increased 19.9% and in it the biggest sub accounts were for payment services, which made a massive jump of 31.7% to BGN 8.8mln and software services going up 71.6% to BGN 1.5mln. Marketing expenses stayed fairly constant going up slightly to BGN 8.9mln from BGN 8.4mln.
- Other expenses, which is mostly the tax levied on gambling profits, increased 19% to BGN 25.6mln. The account is expected to increase with increased revenues.
- The operations in Peru commenced in May with the website being fully functional and providing full access to the local clients. The company plans to let it operate without significant promotion in order to evaluate local clients mentality better and be more efficient with the marketing costs. Then, around the end of Q3, beginning of Q4, active marketing is expected to be deployed.
Ivaylo Valchev
Equity Analyst
Tel.: +359 2 937 9862
e-mail: valchev@sis.bg
Svetozar Abrashev
Senior Managing Partner
Tel.: +359 2 937 9869
e-mail: abrashev@sis.bg
Sofia International Securities
Sofia 1000,
140 G. S. Rakovski Str.
Tel.: + 359 2 937 98 65
e-mail: info@sis.bg
Disclaimers and Required Disclosures
Sofia International Securities AD is a member of Bulgarian Stock Exchange (BSE) and the Central Depository of Bulgaria. The company provides brokerage, investment banking, equity research, portfolio management and other services. Sofia International Securities AD is regulated by the Financial Supervision Commission of Bulgaria.
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The individuals responsible for the preparation of this report certify that: (1) all of the views and opinions expressed in this report are their own and reflect their personal views about the issuer(s) and the securities subject of this report, and (2) no part of any analyst’s compensation was, is, or will be directly or indirectly related to the specific views or recommendations expressed by them in this report.
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Financial Interest
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Equity Valuation and Risks
The value estimate(s) stated in this report is (are) valid only in light of the valuation methods used to derive this estimation. The use of other or more comprehensive approaches could result in other estimates of value that could diverge substantially from the results presented herein. With regard to the above, when making our conclusions about the intrinsic value of the Company’s share capital, we have not considered or evaluated any possible tax, legal or other effects that might arise from engaging in transaction(s) with the shares of the company. The document should not be regarded by recipients as a substitute for the exercise of their own independent judgment and they should seek and obtain independent investment advice is necessary. Any facts and/or information stated in this document are subject to change without notice and Sofia International Securities is not under any obligation to update or keep current the information contained herein. Any opinions expressed herein are only correct as of the stated date. Past performance is not indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security.
General
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