Q3 FinancialsReviewing this for potential long investment (I cannot short stocks <$3).
Q3 Financials were filed Friday. Here is summary of financials thus far. BetVictor-powered, white-labeled sportsbook McBookie, a Scottish online sportsbook that has been around since 2009, is essentially all the revenues as Askott is pre-revenue really at this stage. Stock has done well since Nov. 5 announcement of strong gross win in October, though this was perhaps buoyed by unusually high sportsbook gross win % of 18%. Note that gross win, despite headline in the press release, may not be reported revenues exactly. Actual revenues would be lower due to freebets, etc. I estimate revenues in October of $482,000 or $316,000 on normalized basis (assuming 9% gross win % in sports and 20% differential between gross win and actual IFRS revenues).
Strong excitement has been supported by paid media (with some receiving payment in shares in lieu of cash) including it appears Proactive, Wall Street Reporter/Octagon Media, Financial Buzz, Market One, equity.guru, Agoracom, FN Media/Joint Salty Holdings (i.e. financial morning post).
| Notes | McBookie acquired March 26, 2020 | Full Q of McBookie but only a few weeks of football fixtures due to COVID | Full Q of McBookie and 1/2 a Q of Askott, acquired Aug. 11, 2020 (about 1.5 months of football fixtures) | | Full month of football fixtures |
| C$ | Q1 | Q2 | Q3 | 9 mos | October |
| Betting volume (turnover) | N/A | N/A | N/A | N/A | 2,200,000 |
| Betting Gross Win | N/A | N/A | N/A | N/A | 405,000 |
| Gross Win % | | | | | 18.4% |
| | | | | | |
| Casino Turnover | N/A | N/A | N/A | N/A | 5,100,000 |
| Casino Gross Win | N/A | N/A | N/A | N/A | 197,000 |
| Gross Win % | | | | | 3.9% |
| | | | | | |
| Combined Gross Win | N/A | N/A | N/A | N/A | 602,000 |
| Normalized Gross Win (With Sports at 9% gross win) | | | | | 395,000 |
| Freebets, VAT, loyalty program rewards, etc. | N/A | N/A | N/A | N/A | N/A |
| | | | | | |
| Net IFRS Revenues | 4,918 | 323,966 | 473,562 | 802,446 | |
| COGS | 246 | 235,805 | 303,882 | 539,933 | |
| Gross Profit | 4,672 | 88,161 | 169,680 | 262,513 | |
| Gross Profit Margin % | 95% | 27% | 36% | 33% | |
| | | | | | |
| G&A | 61,497 | 128,160 | 159,729 | 349,386 | |
| FX | - 2,636 | 16,674 | - 17,282 | - 3,244 | |
| Professional Fees | 77,312 | 241,001 | 430,596 | 748,909 | |
| Salaries & Wages | 89,068 | 280,782 | 428,386 | 798,236 | |
| Sales & Marketing | 57,221 | 299,624 | 711,419 | 1,068,264 | |
| Share-based payments (incl. in lieu of direct cash for investor newsletters/marketing) | 6,990,595 | 182,913 | 536,840 | 7,710,348 | |
| EBITDA | - 7,268,385 | - 1,060,993 | - 2,080,008 | - 10,409,386 | |
| | will be less than this as 10% of EBITDA from McBookie (i.e. before corp. costs) goes to former directors for first three years |
| | | | | | |
| Amortization | 85,378 | 220,962 | 386,660 | 693,000 | |
| EBIT/Operating income(loss) | - 7,353,763 | - 1,281,955 | - 2,466,668 | - 11,102,386 | |
| | | | | | |
| Interest expense (income) | - | - 40,666 | - 37,800 | - 78,466 | |
| Other | - 16,886 | 168,559 | 16,713 | 168,386 | |
| Net loss | - 7,336,877 | - 1,409,848 | - 2,445,581 | - 11,192,306 | |
| | | | | | |
| Cash flow used in operations | - 533,339 | - 2,055,767 | - 1,617,665 | - 4,206,771 | |
| CapEx | 0 | 0 | - 1,927 | - 1,927 | |
| Free Cash Flow | - 533,339 | - 2,055,767 | - 1,619,592 | - 4,208,698 | |
| | | | | | |
| EV Calculation | | | | | |
| Basic Shares Outstanding | | | | 154,944,962 | |
| Options | | | | 9,194,833 | |
| Warrants | | | | 7,481,011 | |
| Fully Diluted Shares Outstanding | | | | 171,620,806 | |
| Share Price (Nov. 30, 2020) | | | | $ 0.82 | |
| Equity value (Fully Diluted * Share Price) | | | | 140,729,061 | |
| Cash from options if exercised | | | | 3,310,140 | |
| Cash from warrants if exercised | | | | 3,590,885 | |
| Net Cash | | | | 3,377,843 | |
| Enterprise Value | | | | 130,450,193 | |
| | | | | | |
| EV to Sales (Q3 annualized) | | | | 41 | |
| EV to Gross Profit (Q3 annualized) | | | | 124 | |
| EV to EBITDA | | | | NMF | |