PBH -18.28%: a very tough day for the wagering and online gaming business following their first quarter update. While growth remains firm with active customers in both Australia and the US up 10% in the quarter translating into more than double the turnover in the quarter just gone vs the first quarter of FY21, the issue remains how much it is costing them to achieve that growth. Marketing and staff costs jumped significantly through the period contributing to cash burn of $38m in 3 months. While they’ve got over $620m in cash & equivalents and no debt, it is a big number to be spending to acquire customers. Shares have now fallen through the price of the recent capital raise which no doubt drove some of the selling today. The blue sky is great if they execute but a lot of cash will be spent along the way – I get the distinct feeling these guys will not die wondering!
MM remains a holder of PBH in the Emerging Companies Portfolio
Add To Hit List
