In-play betting has proved to be a growth market for the big bookies and this expansion has in turn heralded the rise of a parallel industry that allows thousands of sports games to be streamed live to a global audience. In the midst of this sits
Moreover, business has been brisk since Perform listed last April at 260p – strip out £9.8m of one-off costs and cash profit increased 79 per cent in 2011 to £18.5m. That growth was fuelled by content distribution as companies lined up to stream live football, tennis and basketball games onto their websites. In fact, Perform broadcast more than 11,000 games last year, although that increased the cost of sales by 66 per cent to £53.1m as Perform acquired new content for broadcast. According to joint-chief executive Oliver Slipper, Perform's business model is based on buying the rights for three to five years, depending on the sport, and then bundling the content together for the bookmakers in different markets. "The model means we get a lot of recurring revenue and about two-thirds of sales for this year are already confirmed," he explained.
Peel Hunt forecasts adjusted pre-tax profit of £26m for 2012, giving EPS of 8.6p (6.3p in 2011).
|ORD PRICE:||277p||MARKET VALUE:||£624m|
|TOUCH:||277-280p||12-MONTH HIGH:||286p||LOW: 144p|
|DIVIDEND YIELD:||nil||PE RATIO:||198|
|NET ASSET VALUE:||59p*||NET DEBT:||
|Year to 31 Dec||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
*Includes intangible assets of £74.5m, or 33p a share
Admittedly, a forward PE ratio of 32 isn't cheap. But growth is good and Perform generates a decent return on its employed capital – leaving it looking like an interesting speculative play within a market that it dominates. Buy.
visible-status-Standard story-url-Perform prelims 28 Feb 2012.xml