Reportedly, the government is considering applying a 10% consumption tax on KINO targeting >E200m in proceeds: the tax would raise cost per column by E0.05 yielding E225m on 4.5bn columns played in 2014; numbers do not add up (E2.01bn sales in 2014 imply 4.02bn columns played and not all sales are generated in Greece) but…
In this RG F4T we focus on OPAP: despite having one of the most interesting/promising investments cases in our Greek Universe it has underperformed the market on a 3M and 6M basis (by 0% and 7%). Shares trade 12x EPS 2015E and 9x EPS 2016E vs. RGUniverse (x-banks, OPAP) 16x EPS in both 2015E and 2016E….
Stihima and Kino came in line; strong Joker (jack pots) and one-offs (impairment reversal, deferred tax) explain 11% beat on EPS; VLT guidance was revised downwards to 2.5k own machines in late Q2; sovereign risk weighs on the stock in the form of a) more on-line betting licenses tendered potentially breaching OPAP’s Stihima exclusivity (online)…
We think it will be difficult to hit the Q4 2014 launch target; VLTs are a massive-scale project and we find the odds are greater that the company will face execution delays and hardball negotiations from agents that will opt to stay out of this venture. We see VLTs contributing E48m of EBITDA in 2015E…
Investors will have to wait for VLTs to judge a re-rating. Management reiterated Q4 2014 as the launch date. Hellenic Lotteries made a good start with Q2 forcing us to double our sales estimate for 2014 alone; our 2015+ numbers were already rich enough. Stihima/KINO unexciting => +6.6% in our EBITDA and +2.5% in our…