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thanks 

Try to keep it original

l2wmh.JPG

there were some large trades announced at close. too.

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11% gain today which was triggered around 3pm (when the US market opened)

The intraday price actually went a lot higher than the 11% close, as shown in the chart below, the price touched £3.25 but closed at £3.13

wmh3.JPG

If we look back to our original investment case we had two main triggers for a re-rating in the price, and the third rationale was potential M&A activity. Concerning the two price triggers these were regarded as:

  • UK government review of spend limits to betting terminals
  • US decision on gambling laws

Today the second of those decisions came in. The US Superme Court has decided to overturn the ban on US sports betting – announced today, and this was positive to WMH who has a large sports betting book in Nevada presently, but the price has responded to reflect the opportunity this brings for increased US activity. This is particularly helpful to WMH as it has an established presence in prime locations and now we await the company to guide the market on this new chapter in the coming months.

Equally I understand we will, later this week, likelty get the other decision we are awaiting – the UK position on retail terminals. Recall that the price dropped quite significantly a week or so ago, which I documented above. And this seemingly priced in the ‘almost certain’ limit on these machines to the lowest value under consideration of £2 Therefore we have today a) reversed that decline in the price from the prior week but importantly, I would argue, we are now pricing in the worst case scenario for the UK market. EG any value above the £2 that is announced is going to result in upside, in my opinion.

So let’s see what happens. My posiiton is back to about 28% gain, which is a healthy gain to date. I have not sold. I think the UK decision could come in at a rate higher than £2 as the press reports are a bit spurious, and based on “an insider tells us” type story.

I also think the opportunity in the US, where WMH is an established and well regarded operator, far outweights the negatives attributable to the UK issue. The worst case will see WMH (and others) close off loss making shops, reduce their estates, offer more incentives for online gaming, and run a more ofused retail network than at present. I also think the probability of a takeover is more likely now the US has repealed its gambling decision.

So, in a word:

Downside= probably negligible or nil in short term,

Upside= surprise (eg not worst-case) decisino from UK, US expansion and more likely US takeover.

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Phenomenal insight as always. Will give a bigger reply tomorrow. Wanna get involved more in this convo.

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Hi  do feel free. I am happy for anyone to post contributory information. This can be anything you feel comfortable with both positive and negative information is welcomed to balance the investment case. Pick an area of focus (gaming market consolidation in USA for example..? I know nothing about it) do some digging and see what you can come up with. For example I just found this:

 

"Roger Devlin, chairman of William Hill, has warned that slashing maximum bets on fixed odds betting terminals will leave the company at risk of a takeover from overseas rivals."

 

We are already assuming we are to expect this to be slashed to a minimum (£2) so takeover looks to be the best of a worst-case scenario, which I find absurdly funny, given the previous T/O was around the £4 mark IIRC. 

.. bring on a takeover :)

 

 

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Just seen a ‘breaking news’ article on Sky Business saying that FOBT will be limited to £2 for a Max bet in the uk. More to follow but assume we’ll see some movement on the open.

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yes, initially price was pulled 8% down i think. But buys outweigh sells. see the areas i highlighted red (these obvs changing a lot since img taken) we did say the worst case looked baked-in.

wmh4.JPG

From -8% open to flat (11am) my account has seen a lot of change this morning.

We did say the worst case looked priced-in, so an easy 8% could have been made on that initial open. I didn't change my position.

 

If someone wants to go through the RNS and pull out pertinent points then feel free. I am struggling to find the time. But I am not sure if there is guidance when these changes are to be enforced (anyone?) and then working out the imapct to bottom line. However the price movement today tells me the market is not overly concerned (as I am not, either)

 

I think it is good that the industry is guided to behaving in a responsible manner, as there is a moral stance to all this, people should not be allowed to gamble to the point where their jobs, homes and security is at risk. Moderation is the key to the future here, so I welcome these changes.

 

It would be easy to sell now for 28% gain (I believe the share is also trading ex div) so there is income to be received too in the meantime. And I do think the patient here will be rewarded with a payout in the form of the very least bid rumors and more likely an agreed deal before the year is over. As to me, I will likely wait it out unless an opportunity arises forcing me to free up cash. But I am in no hurry to sell. Today's RNS reinforced the dividend would continue to reflect a payout of half profits, and that should provide reliable income should the markets lurch down.

 

I doubt I'll comment much more here in the short term, unless I get time to go through the RNS (I am hoping someone else will do that.. , maybe..)

 

Off topic:

We still have TWTR going on here, as well as NXR and WGB. I am doing well on HUR (having been buying from 11p) and SPD seems to be creeping up day by day. Has anyone else noticed that.


ITV and BOO are also going well and I want to look at SDRY at some point. So much to do. 

 

 

 

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by time I posted we are now 2.8% up on yesterday. Funny times. Will be interesting to see how US market reacts.

 

All the best, everyone.

rimmy2000

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Has anyone watched tonights world cup on ITV? obviously sports betting is a big part of the peripheral world cup activity. I have seen ads by WMH, as well as others. This has potential to add a windfall to the next trading figures perhaps. (just thinking out loud here)

 

 

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I also think that given it’s been so sunny in Europe these last few weeks (and likely to continue) that people are more likely to bet. 

My reasoning

  • more people down the pub
  • more social atmosphere
  • drink more ... maybe? (worth looking at some brewery’s too as a trade idea in my opinion, and retail)
  • more likely to bet. I know I’ve placed a bet on the back of friend chat and the buzz down the local.

*NB: this doesn't constitute confirmation or an opinion on the trade idea itself, or an opinion on stock direction or a buy/sell signal. 

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16 minutes ago, JamesIG said:

I also think that given it’s been so sunny in Europe these last few weeks (and likely to continue) that people are more likely to bet. 

My reasoning

  • more people down the pub
  • more social atmosphere
  • drink more ... maybe? (worth looking at some brewery’s too as a trade idea in my opinion, and retail)
  • more likely to bet. I know I’ve placed a bet on the back of friend chat and the buzz down the local.

I agree @JamesIG, there are good opportunities here for traders to get ahead of the curve. We have had exceptional weather, so looking into bars and casual eating destinations may prove to be wise. Bars showing the games also. Now veering off topic but I was looking at RBG yesterday and there were only a handful of trades but the price was being pulled up. A very thin market, but a potential example of a company that may come away with improved performance over this period.

I know that FUL have an update in a week or so, I think this could also surprise to the upside as they are cashing in on the games and weather by offering 4x pizza for £20 deal.

I hold shares in FUL, WMH, and RBG.

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Again just reading about the England knock out saving bookies a heap of cash... upwards of £100m because they’re not going to have to pay out on the big bets for England to bring it home. William Hill up a percent and a half and PP up a chunk too. 

Great results IMO. Article in city am about pubs doing well as well.

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Yes, I agree with that @PandaFace, there is a good chance the World Cup will bring a windfall, and possibly Wimbledon (with Federer and Serena getting knocked out perhaps?)

The big news here is how things start to unravel in the USA I think, as this and likely consolidation will generate the big moves, but I agree with your sentiments this will likely be positive for the next trading update - through loss avoidance!

:)

 

 

 

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thought I would update here. Price has been quite volatile lately. We have Q2 results a week on Friday. This will include World Cup and Wimbledon of course.

Up 2% today.

wmh.thumb.JPG.d5c868795f67a1d83cbbea07819ff5d2.JPG

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Looking forward to this. Don’t wanna get aheadbut think we could be seeing some good trades coming right...

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Posted (edited)

Still blows my mind that people put £100 into those machines for a single bet... it’s pure gambling for the sake of gambling in its simplist form. Not like balckjack or whatever which at least has asocial interactiom aspect 

Edited by PandaFace

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Thanks for the posts guys. Yes, half year results out today >> https://www.investegate.co.uk/william-hill-plc--wmh-/rns/half-year-results/201808030700027073W/

Price is down about 7% as I speak, so not well digested by the market. For me this is simply a case of loking at the original rationale, to see what has changed. My reasons to buy were

a) reliable and steady dividend. this is still being paid : no inc or dec. but 4.26p for the HY.

b) likelihood of consolidation. I think this remains in tact, and even more so with the US opening up gambling laws.

So on the face of it, it can be seen a s a failure but I believe the two rationale will continue. Dividends will persist and we will eventually see a takeover.

£882m was written off as impairment against the Triennial review and impact on retail betting outlets, debt is low and the statements always focus on this, so the business is in reasonable shape. - this is the bit which the FT have jumped on as per @Caseynotes post above.

We expected a good result from the world cup and this is confirmed in the narrative:

"Group net revenue in H1 2018 was up 3% to £802.6m, including US expansion net revenue of £0.6m. Gross win from the World Cup was £11.0m in H1 and £32.8m for the tournament as a whole"

 

Obviously a more positive result would have been preferable but this is not a disaster, e continue to hold.

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