GVC Plc Q3 Update - Good for EML, page-11

Took a position yesterday after researching the business for a while. Key attractions for me included the capital light nature of the model, operating leverage which can boost margins further, strong balance sheet with cash which gives management the options to re-invest or return to shareholders.

All the vertices have so much potential and given management execution in the past, the growth runway is quite significant. If they are able to achieve this, the business will most likely hit double digit growth rates for the next 5 years and the market will continue to re-rate the stock as earnings increase.

You have mentioned EBITDA growth of 30% which is excellent, but still think this maybe a little conservative given growth drivers and would not be surprised at all if this were to be more in the vicinity of 40% at least for FY20. Which could very well be replicated in FY21.

I think its fair to say that the expectation is that management will most likely upgrade guidance during the AGM in a couple of weeks time with a case building for a future dividend.

With all that in mind, I feel comfortable with the investment.

In the very short term, there usually is a run up to most catalyst events and would not be surprised if this managed to reach around $5 prior to the AGM - not in anyway trying to pump this because I now own, simply thinking out loud here given that the market is clearly long this (both sell side and buy side). With a market cap of just over a $1 billion and considering the market opportunity, would not be surprised again if there is a re-rate in SP post AGM if in fact the above come to pass.

Either way, I'm a long term investor and feel excited by this business and its future.