Poker
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may as well make it easy if they want to tug it.
heard on the radio this morn (approx numbers cos I am getting senile) that profits were down to £17M from £65M in prev year and this was explained
BUT the informed chappy said £8M of that £65M was from "managing" clients (users?) funds. I assumed was mostly interest on all the account balances.
last year that figure dropped to £2.7M of the £17M
heard on the radio this morn (approx numbers cos I am getting senile) that profits were down to £17M from £65M in prev year and this was explained
BUT the informed chappy said £8M of that £65M was from "managing" clients (users?) funds. I assumed was mostly interest on all the account balances.
last year that figure dropped to £2.7M of the £17M
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Blimey
I haven't done any research in to this so don't know the facts, but if the figures above are true a £1.5 Billion valuation is pie in the sky. |
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extract from racing post
Betfair, which is estimated by some to be worth £1.5bn and employs more than 2,000 people, also announced their results for the financial year ending April 30, 2010, with group revenue increasing 13 per cent to £340.9 million. However, pre-tax profit fell 63 per cent from £47.5m in 2009 to £17.8m, which the company put down to increased marketing ahead of the World Cup and the start of a £25m technology investment programme maybe they will send for Bruce |
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just for absolute clarity
I added the bit about them sending for Bruce - that was not in the Racing Post  [:x][:x][:x][:x] |
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Ok let's do some sums
Proposed Market Cap £1.5 Billion Pre Tax profit £17.8m P/E (Price to Earnings ratio) 84.3 Hmmmmm, for an ex growth company seems a little rich for me. In the Dot Com Bubble probably but in today's market. No hope. Increased marketing for the World Cup dropped £30 Million from the bottom line  What the fook were they doing that I missed In fact if they are a growth company (Like they want us to believe) you could argue they dropped more than £30 Million.Technology Investment Programme? Is this changing the Sports Page and fooking up the forum? If it is I could have done it cheaper, much cheaper. When was the Premium Charge bought in? Last year wasn't it? Sounds like they would have struggled without it. Employ more than 2000 people? Surely not. If they do any chance they could divert some of them to Poker Customer Service They have first mover advantage (i.e the other Exchanges are dire and have no hope of catching up) but over the last few years they have taken their eye off the ball big time. Poker could have been a huge growth area for them, but nobody could be bothered and now it's on it's knees. Again  I hope Bert hasn't blown all his money on his Horses, because if Betfair float for more than £750 Million I'll eat my hat. (Even then this is generous in the extreme). It won't be in the near future either. Bruce? I'd be sending for Jesus Fantastic Company, £1.5 Billion? No chance. |
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should add the proviso I still havent checked any of the figures quoted.
If my ban is only a month I will do though If they do float I would suggest (while eating my hat) they would be the best Short on the market. |
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Had a look at the accounts because I was interested to see if they gave the p/l for the poker side of the business. I expected to see that show a loss. However, it's not broken down by sector.
I would be tempted to buy some shares if I can get a yield of 5% odd. The good thing about bf is that even if the economy goes completely belly up then people will still keep betting. Frankly though I am amazed that nobody has copied their business model and allowed equivalent back/lay vs other punters. Seems to me the guys that set up the original company like the idea of making a huge pile of cash for themselves, and maybe feel they can get out at the top of the market. I won't be taking up the IPO but will have a look at them after the flotation and think about picking up some shares then. |
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Lot of expert research ITT.
Ignore the fact they are cash rich, have no debt, have increasing revenues and are improving infrastructure ahead of expanding into new markets and trust your valuation of £750m. Put your money where your mouth is and if you're right, you'll be retiring soon. |
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Interestimg to see that 'brick and mortar' bookies submitted their suggestions this week to the HBLBs consultation on betting exchanges. Wonder if that will impact on their value.
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Interesting thoughts Bluf. As I said yesterday I hadn't had a chance to look at the figures for myself but I have now. These figures are now 6 months out of date mind you, as they are taken from the 30th April results.
You are of course right they have a cash (or cash equivalent) balance of £150 Million. The also have an AR balance of £22 Million. But when you look a bit deeper they have an AP balance outstanding of £89 Million along with a current tax liability of £26 Million. So although Cash is always healthy on the Balance Sheet I agree, the net position only appears to be Positive to the tune of £57 Million They do have no debt. Increasing Revenues? I am not so sure. They don't break these figures down for idiots like me obviously but Revenue from Core Betfair operation was: 2010 £306 Million 2009 £291 Million 2008 £240 Million Having checked the Premium Charge came in late 2008 (Had to check because being a mug punter I've never paid it ) and looking through the figures I can now see why. I think they realised organic growth was slowing and needed an additional income stream to keep them on the right track for the IPO. I have no idea how much the PC contributed to the figures above however. If this IPO doesn't happen soon be prepared from more commssion changes imo.Ignoring PC altogether revenues appear to have grown by only 5% between 2009 and 2010. Does that growth justify a PE rating of 80 odd in today's market. Not for me. Even if we are kind and say the Profit figure would have been almost doubled without the Infrastructure Investment and World Cup marketing, a P/E of 40ish for a Gambling Company who look to me to going ex growth Ladbrokes trade on a P/E of 14 (I know the business models are different but there is no direct comparison)Am I the only one who is shocked to hear they emply in excess of 2000 people The only justification I can see for a Market Cap of £1.5 Billion is if the US (Or possibly Indian?) Market opens up to them. In keeping with the theme, a massive gamble. At the end of the day I am no Accountant just interested in the discussion so am prepared to be shot down in flames. This is obviously not the forum for this either so apologies. Being a gambler though I'll have a friendly £50 with you that after 30 days of trading they are closer to £750 Million than £1.5 Billion. I reckon SoftBank have done their dough. |
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I'm not qualified to give an accurate valuation of the company but I'm confident that since they will enter the FTSE 250 straight away that the IPO will meet with enough scrutiny that the vaulation will be in the right ballpark.
Incidentally, the latest value being touted is £1.2Bn but once it's final and public I'll have a wager with you if you're sticking to your guns on it being massively overvalued:) |
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I am saying they are worth closer to £750 Million than £1.5 Billion. If you are hearing £1.2 Billion already, I'd say we are getting there even after a day. You are right though the valuation will be accurate as Institutions will not invest without the facts, which unfortunately I don't have.
There is obviously a caveat in this that they are only releasing 10% of the equity, so there may be a Premium initially. Although I bet if the valuation is £1 Billion+ all of a sudden there will be some more equity available to cover over subscription Forget the bet it was tongue in cheek anyway. Unless of course you want to accept it now? Neither of us are qualified to value them, so let's do a Betfair and cut out the middle man? I'll have £750 Million, you can have £1.5 Billion whoever is closest after 30 days of trading gets the £50? You will understand I can't wait until it is public as you would have too much of an advantage. If they float at £750 Million you are hardly likely to take the bet are you? Sounds like you may be backing down already to be honest  |
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I'm hardly gonna back down on a £50 bet but I'm also hardly gonna take the over on £1.125Bn on a valuation of £1.25Bn when you were prepared to make the same bet on a valuation of £1.5Bn!!!
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'Being a gambler though I'll have a friendly £50 with you that after 30 days of trading they are closer to £750 Million than £1.5 Billion.'
Not sure how I have changed the terms but there you go. Let's just leave it as an Interest bet and forget the money. Probably why I have never paid the Premium Charge I'd bet on two flies on the wall if Betfair had a market on it.In fact thinking about it I wonder if Betfair would put up a market on this  Good Luck Bluf and let's see what happens. |
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Interesting piece for anyone interested. Think it may be a bit too negative but I guess we'll find out soon.
... http://www.moneyweek.com/investment-advice/betfair-ipo-share-tips-ladbrokes-03901.aspx |
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Good start for them. Looks like I was wrong.
You saved me £50 Bluf, thanks for that. Still think they are over valued but what do I know  |
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Some figures I saw did seperate the poker division and it had slumped from about 29,000,000 in 2009 to 25,000,000 in 2010 - although no dates were given for the year end.
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Be warned private investors often lose out with IPOs
http://www.moneyweek.com/investment-advice/betfair-ipo-share-tips-ladbrokes-03901.aspx |
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looks like the market valued them at around 1.5 Billion.
I am trying to find out the likely yield if I buy shares now. Would not find buying a few shares maybe. |