My Q2 AnalysisI went back in and listened to the TSG Q1 earnings calls and slides.
My thoughts:
-Q1 profits were low mainly due to the Sky margin decreasing because of operator unfriendly results. Instead of a 9% margin, they were at 5%. April and May already started showing an improvement, where the net win margin for those two months was over 9%. This should give Q2 a boost. Same for Beteasy.
-Casino results were down yoy because of (a) some big jackpots that were paid out and (b) some countries where they ceased activities (Switzerland for example). Jackpots should even out on Q2 and new games that came out should provide a bit of a boost.
-Poker results were hurt because of the ongoing Russia issue, as well as withdrawls from markets like Switzerland and the Netherlands. This will not improve in Q2.
-EUR vs USD. Currency headwinds will still persists in Q2.
-Biggest one: Guidance. They said that FY19 guidance will be in the lower end of the range given. This was the worst news. Will this change? I don't know.
Keys for the Q2 earnings call and release:
-Update on Foxbet. They said they would talk about their Foxbet strategy in the Q2 call on August. The market wants to see growth right away. This will be key. Nobody wants to see huge up front expenses with promises of profits many years away.
-Deleveraging: how much more debt was paid off in the quarter?
-Guidance: will it still be at the low end of the forecast or will it move up a bit?