Aspire Global Q4’20: Initial take – Better than Expected
Redeye Research Note 2021/02/18
The quarter was focused on having BtoBet integrated into the Aspire platform and the growth of Pariplay in more markets. PariPlays games launched with Rush Street Interactive in New Jersey. Aspire’s own Pay n Play solution went live with their own brand Griffon Casino and four other operators.
Aspire mentioned that they are ready for the regulation changes in Germany and Netherlands. Further on, Aspire is looking into the Brazilian and American markets as they deem the favorable growth prospects in these markets. With the acquisition of BtoBet and offering SBtechs sportsbooks solution Redeye agrees and sees these markets as natural growth markets for Aspire’s offering spearheaded by the sportsbook’s solutions in these sport enthusiastic markets.
In the fourth quarter, Aspire’s revenue came in on €44.4 m (32.2), resulting in a Y/Y growth of 37.6%, EBITDA increased by 89.9% to €8.3 m (4.4), which gives an EBITDA margin of 19% (14%). EBIT grows to €6.3 m (3.1), an increase of 100.4% Y/Y. EPS came in on €0.07 (-0.26).
Aspire came in higher than all our estimates except EPS, but the difference in absolute amount is somewhat insignificant. The costs in taxes and losses from associated companies came in higher than we expected.
Looking into the segments’ details, we see that the growth is mostly coming from the B2B segment with a growth of 44.5%, reaching €33.1 m (22.9), while the B2C segment increased 28.8% to €14.3 m (11.1). B2B and B2C had an EBITDA margin of 19% and 14%, respectively. Increase four percentage points in B2B and six percentage points in B2C, resulting in an 82.3 % growth in B2B, and in the B2C segment, the growth was 122%. Expectations forward are that B2B will be the main driver for growth in the years ahead.
To summarize, Aspire had a terrific result in the fourth quarter to tie up the full year. When looking ahead, Aspire has a promising opportunity to continue growing and show strong profits forward. Some disappointment is understood from the omission of the market’s expected dividend. Still, as an alternative to raising more money by issuing a bond to replace the old one, it makes sense to withhold from distributing dividends to increase its profitability in the long term.