UK investors embrace Jackpotjoy on first day of trading
Shares in relocated bingo-focused company up 7% after first day on the London Stock Exchange
Jackpotjoy (JPJ) enjoyed a successful first day on the London Stock Exchange (LSE) on Wednesday, with the firm’s share price rising 7% to 616p.
And the bingo-led operator, formerly Intertain, continued to rise in early trading on Thursday, with shares increasing to 619p at the time of writing, suggesting a valuation of around £460m.
Macquarie Research was among the bulls, issuing an “outperform” rating on the relocated company and setting a target price of 1,200p.
“We like the stock given the structural migration towards online gaming, JPJ’s leading market share in the global iBingo market (27% vs. 2nd player at ~15%), strong FCF profile and prospect of deleveraging,” Macquarie said in an analyst note.
“We see near-term re-rating potential as a new operationally focused management team further improves the governance structure and communicates the strategy with emphasis on lowering debt leverage and eventually introduction of a dividend.”
Macquarie also pointed out that Jackpotjoy was trading at around 6.1x 2017 EV compared to 11 or 12x on average for other UK-listed gaming companies.
“With the shares trading at a 40-50% discount to UK peers, we think the valuation gap will narrow over the next year,” Macquarie added.
The market reaction on the first day was in line with what the operator had previously outlined as its rationale for moving the business to London from the Toronto Stock Exchange.
JPJ chief executive Andrew McIver said on Wednesday: “The London listing will provide us with access to a large, liquid and international market that is home to a number of our global gaming industry peers and a majority of our online gaming peers.
“This exposure to a broader market with extensive sector knowledge and familiarity is expected to contribute over time to a fuller and more appropriate valuation of our business.”
Last week EGR Intel revealed the firm was planning to ramp up its operations in Denmark after receiving full licenses for its Vera&John and Intercasino brands.