ALL +12.3%: 1H results today for the gaming business were stronger than expected with shares surging on the back of the beat coupled with a risk on session from the broader market. Revenue was slightly ahead of consensus, however, earnings (EBITDA) of $1.2b was ~10% ahead of the market driven by lower corporate costs. The underlying business segments broadly performed as expected but from a geographic standpoint, US was softer, offset by strength from the Rest of the World.
The strong result also paved the way for an additional $350m towards a share buyback alongside a 36cps interim dividend. The company has also announced a strategic review of their digital assets excluding Social Casino. The assets under review have seen growth stagnate over the last few years and have little synergy benefits for the rest of the business so it makes sense to unlock some value there, but as always it will come down to price. Guidance was maintained for profit (NPATA) growth, though the company reduced spending guidance for the digital business.
MM is now cautiously bullish ALL after a strong result
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