Author Topic: INLOT.AT - Intralot  (Read 121071 times)

Packer16

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Re: INLOT.AT - Intralot
« Reply #10 on: December 27, 2013, 04:06:59 AM »
In comparison to GTech I think the capabilities are comparable at least from Intralot's corporate presentation on their website.  They appear to do system implementation and support, have gaming modules and develop interactive gaming.   They also operate lotteries.  There EBITDA margins (adjusted for net vs. gross payout - see presentation) are comparable to GTech's.  In terms of revenue concentration, Intralot has only 5% in Greece and GTech has 20% in Italy.  Intralot also has high recurring revenue with 80% renewals rates and going forward has contracted revenue to 2018 at 90% of the 2012 levels.  I think many of the favorable characteristics the GTech has are available to other market participants who have similar customers (Intralot and SGMS).  Intralot does partner with other firms but this appears to be an industry practice.  Intralot has 14 state lotteries at this point so there appears to be demand for there approach to providing there services.  Am I missing something?  GTech is reasonably priced but not as cheap as Intralot.  I also own some OPAP.

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« Last Edit: December 27, 2013, 05:17:04 AM by Packer16 »


yadayada

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Re: INLOT.AT - Intralot
« Reply #11 on: December 27, 2013, 06:46:45 AM »
ok so greek stocks dont show up on google ? I thought they were all delisted or something because of the crisis haha. Im so dumb sometimes.

BG2008

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Re: INLOT.AT - Intralot
« Reply #12 on: December 27, 2013, 12:41:28 PM »
Packer,

I was at an invest in Greece conference about a week ago.  Intralot presented there and basically said that they were forced to issue debt at 9.75% rate because the debt market wouldn't touch anything associated with Greece.  At first I was really excited, but I can't get comfortable with their EBITDA figures.  It seems like they are constantly investing in Cap Ex and their cashflow available for debt service covers the interest by only 2x.  Cash does not accrue on the balance sheet and the cap ex has not resulted in revenue growth.  What am I missing?


Packer16

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Re: INLOT.AT - Intralot
« Reply #13 on: December 27, 2013, 12:52:11 PM »
As to debt, the debt is trading a premium to par yielding closer to 7.5% so in the aftermarket it appears the sentiment has changed at least for Greece.  Their cap-ex is required for new contracts so as they add new contracts they incur cap-ex.  From what I have seen maintenance levels are closer to Euro25 million.  Given the about Euro200 m EBITDA gives a nice FCF.  The revenue has grown at 15% per year over the past 3 years (2009 to 2012) thus the higher cap-ex.  If they decided to stop growing the FCF would be very high given the locked-in revenue over the next few years. 

Where there any good questions asked at the conference? 

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« Last Edit: December 27, 2013, 01:09:55 PM by Packer16 »

phil_Buffett

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Re: INLOT.AT - Intralot
« Reply #14 on: December 27, 2013, 01:20:28 PM »
As to debt, the debt is trading a premium to par yielding closer to 7.5% so in the aftermarket it appears the sentiment has changed at least for Greece.  Their cap-ex is required for new contracts so as they add new contracts they incur cap-ex.  From what I have seen maintenance levels are closer to Euro25 million.  Given the about Euro200 m EBITDA gives a nice FCF.  The revenue has grown at 15% per year over the past 3 years (2009 to 2012) thus the higher cap-ex.  If they decided to stop growing the FCF would be very high given the locked-in revenue over the next few years. 

Where there any good questions asked at the conference? 

Packer

and at their Investor presentation they stated that they will reduce capex, because they have make good Progress in buildung a Fundament for the future. so the fcf will be nice over time  :)

BG2008

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Re: INLOT.AT - Intralot
« Reply #15 on: December 28, 2013, 07:40:15 AM »
As to debt, the debt is trading a premium to par yielding closer to 7.5% so in the aftermarket it appears the sentiment has changed at least for Greece.  Their cap-ex is required for new contracts so as they add new contracts they incur cap-ex.  From what I have seen maintenance levels are closer to Euro25 million.  Given the about Euro200 m EBITDA gives a nice FCF.  The revenue has grown at 15% per year over the past 3 years (2009 to 2012) thus the higher cap-ex.  If they decided to stop growing the FCF would be very high given the locked-in revenue over the next few years. 

Where there any good questions asked at the conference? 

Packer

Don't recall any really good questions asked at the conference.  Half of the conference consist of Greek officials trying, I mean begging, the NYC finance community to invest in Greece.  When Intralot talked about their debt deal experience and that half of their revenue is outside of Europe and growing, I knew I had to dig in deeper.  There was a panel of distressed investors as well.  It's a bit comical to see the Greek officials pleading and the distressed guys are kind of just like "well, we don't need a 5-10 horizon, we're here for the restructuring and we'll be gone in 2-3 years."   

Packer16

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Re: INLOT.AT - Intralot
« Reply #16 on: December 28, 2013, 08:12:32 AM »
Where there any other interesting Greek names that you found interesting?  TIA

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BG2008

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Re: INLOT.AT - Intralot
« Reply #17 on: December 28, 2013, 08:19:47 AM »
Nothing that stood out like Intralot (I like it mostly for the revenue mix outside of Greece).  Did talk to a guy who mentioned that buying real estate in Crete is likely a good idea.  The northern Europeans love to summer on the Island of Crete and you can generally trust the people that you're doing business with.  He couldn't give me a cap rate or revenue multiple, but he said it was compelling and getting muddle all together with the Greek crisis. 

Maybe a vacation home for you Packer?

Packer16

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Re: INLOT.AT - Intralot
« Reply #18 on: December 28, 2013, 01:02:22 PM »
Maybe I will look into that.  There is a way to invest in resort Greek property via firm called Dolphin Capital Investors in the UK.  It is run a former GS real estate guy.  It sells at an about 50% discount from NAV.  I can't invest due to a conflict but I thought I would let others know about it.  There are also about a half a dozen of other publicly traded Greek RE companies like - Eurobank Holdings (FFH has a stake), Trastor REIC (Chou has a stake), MIG Real Estate, Lamda Development and REDS.

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SwedishValue

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Re: INLOT.AT - Intralot
« Reply #19 on: December 28, 2013, 05:19:51 PM »
Thanks for the idea Packer! Have been looking through a couple of your ideas recently and I wish I was as smart as you.

I might be mistaken, but isn't it that they use full consolidation for quite a few of their not fully owned businesses? In that case, shouldn't we adjust the EBITDA numbers down?

Not trying to sound harsch/rude, I'm not a native English speaker.