Stocks Tracker: Q4 sends quivers across markets and regulation rears its head in dry January
EGR analyses the share price movements of major industry players in January, including Kindred Group, 888 and Catena Media
888
3 January closing: 88.05p
31 January closing: 71.95p
Peak January closing: 103.20p
As far as months go, it couldn’t have gone much worse for 888 in January. The stunning share price slump at the end of the month ushered in by the shock departure of CEO Itai Pazner and the disclosure of compliance issues among its VIP customers in the Middle East wiped tens of millions of pounds off of the operator’s market cap.
Following Pazner’s departure on Monday 30 January, 888’s stock plummeted 26% in early trading before closing the day out at 74.85p from a previous close of 103.20p on Friday 27 January. The exit of the 22-year company veteran sent shockwaves across the market, with investors dumping stock amid a lack of confidence in the firm.
Pazner’s departure, coupled with the compliance issues flagged in the Middle East, did not make pretty reading for the operator’s top brass, with its share price falling even further to close out the month at 71.95p, representing an 18.3% monthly decline.
888 had been hit with a series of senior departures prior to Pazner, including chief transformation officer Naama Kushnir departing after 15 years and CFO Yariv Dafna set to leave in March. Dafna has since agreed to remain in the role until the end of 2023 in an aim to steady the ship.
It was also confirmed the FTSE 250 firm has begun to make a series of redundancies across its Israeli office as part of a series of cost-saving measures following the £1.95bn acquisition of William Hill International.
The need for redundancies has arisen due to duplicate roles as a result of the merger, and with 888 saddled with £1.8bn in debt from the acquisition, the scythe was duly swung.
The start of the month was relatively inconspicuous for the firm, with Friday 13 January seeing 888 reveal a 3% year-on-year (YoY) downturn in revenue for Q4 2022 to £458m.
The operator said the expected bounce-back benefits from the World Cup and retail failed to materialise, with the market less than enthused with the results.
888 closed out the day at 89.25p on the day of its results release, falling from a previous close of 93.50p.
Kindred Group
3 January closing: SEK111.25
31 January closing: SEK105.10
Peak January closing: SEK118.80
January marked a difficult start for Kindred Group after a tough 2022 as despite a positive 24% uptick in expected Q4 revenue, missed financial targets for full-year 2022 saw its share price suffer.
A solid start in the opening weeks of the year was quickly brought to a halt on ‘unlucky-for-some’ Friday 13 January as the group’s stock fell 16% by the close of play to SEK97.80. The somewhat unexpected downturn came as the Stockholm-listed firm recorded a 24% YoY rise in revenue to £305m. However, the group could only record a 2% rise in revenue for the quarter when excluding the Netherlands, with access only gained in July after a nine-month absence.
At the time, Kindred pointed to regulatory headwinds across Europe and the lack of cut-through in the US, which has also seen it pull out of Iowa and only focus on states with both legalised sports betting and igaming.
Additionally, sports betting margin after free bets amounted to 8.9%, below Kindred’s long-term average.
Kindred said: “Management does not believe that the fourth quarter 2022 results are indicative of the true earnings power of the business and Kindred has therefore decided to communicate a non-recurring indicative guidance for the fiscal year 2023.”
However, Kindred’s share price has shown signs of improvement since the release of its preliminary results, closing out the month at SEK105.10. A monthly downturn of 5.5% could have been a lot worse for the operator as it looks to return to its former strength.
Catena Media
3 January closing: SEK19.82
31 January closing: SEK27.60
Peak January closing: SEK28.90
Catena Media kicked off 2023 in a positive manner on the stock market as it saw its shares rise by almost 40% in January. After a somewhat sticky 2022, including cutting its European operations and headcount, the sale of the AskGamblers brand to Gaming Innovation Group in December looks to have opened up new avenues for the affiliate.
On Tuesday 10 January, Catena notified the markets it had appointed Carnegie Investment Bank as financial adviser to support the group during discussions over the sale of assets and/or a public tender offer for the entire company.
The news sent Catena’s share price soaring 22% in early trading before closing out at SEK22.94, compared to the previous close of SEK19.50.
At the time, Catena noted the sale of AskGamblers, and its related assets, would allow it to have a “clear focus” on its operations in North America.
On Thursday 19 January, Catena Media revealed its anticipated Q4 2022 results, with North American revenue expected to jump by 31%.
The Stockholm-listed firm said North America is expected to account for 78% of total group revenue after returning €21.5m, up from €16.4m in Q4 2021.
Catena’s shares jumped again on this news, closing out at SEK28.90 from a previous close of SEK26.96.