View from the City: Q3 trading updates flood in as "wooden spoon" is handed to William Hill

The end of October brought to a close most of the Q3 trading updates – with the notable exceptions of Flutter Entertainment and Kindred Group – and highlighted the diverse fortunes of the European-listed companies. 888 Holdings was the standout performer reporting 56% YoY growth with GVC Holdings, Gamesys Group and Betsson reporting around 30% YoY growth. The wooden spoon was handed to William Hill which reported just a 4% increase in Online revenue during the period. Attention now turns to the respective shareholder votes for the Caesars acquisition of William Hill. William Hill shareholders should be more than grateful for the 272p a share bid given for the underperforming non-US assets and the over 30% share price decline of US-gaming sector bellwether DraftKings since the Caesars bid was announced. We wonder how confident Caesars investors will be in the company raising around 5x debt/EBITDA against the William Hill Retail and Online business given the current trading performance and volatile financial markets. There is likely to be no shortage of potential acquirers for the Online part of the business with 888 already throwing its hat in the ring, under-bidder Apollo likely to remain interested and CEO Ulrik Bengtsson likely to be supported by private equity to lead a management buyout. Market activity continues apace in the US with Genius Sports the latest company to venture down the SPAC route of listing on the stock market while NeoGames (part owned by Hills) also filed its intention to list on Nasdaq. The US continues to dominate investor attention, but regulatory progress remains relatively pedestrian and competition continues to increase, magnified by capital raises among the major players to boost marketing spend. Quite where this spending spree all ends is already the subject of much debate but one thing is clear, not every company is going to be a winner.