JUE 28 DE MARZO DE 2024 - 10:00hs.
Digital plan 2020-2021

To increase its sales, Codere would bet on new markets such as Brazil

The current management team of Codere is working on a three-year plan aimed at digitization and growth in Mexico and Spain, which would also contemplate the entry into Brazil after the regulation of its new sports betting market, and study the possibility of proposing to the board of directors, once implemented the growth programs, a public offer of sale (IPO) of shares in the market.

This possibility, only tentative by now and with a horizon for 2020 or 2021, would make it possible to boost the shareholding structure of the largest gambling group listed in Spain, whose movements are limited by the parasocial pact of 2016, signed by the previous managers -the Martinez Sampedro family- and the funds that participated in the debt restructuring.

The sale of shares in the company is possible, but any shareholder who acquires titles of the signatories of the pact must subscribe to its content. This is the case of the Prudential insurer, which has recently increased its stake to 21%.

The current free float is barely equivalent to 2% and the lack of liquidity means that the stock suffers an enormous volatility that does not reflect the real value of the company, to the extent that the purchases already made between shareholders have been made at prices above of quotation.

An IPO would help to correct this aspect and to give an exit to the funds that give for completed their journey, as well as to allow the entry of new investors. Silver Point Capital is now the main shareholder, with 23%, ahead of Prudential and Martínez Sampedro, with 16%, according to the CNMV. The two funds, with the vocation of stable shareholders, would also possibly support a capital increase aimed at raising Codere's free float to levels of 30% or 35%.

Mexico, Spain and Brazil

After a difficult 2018 marked by the change in management and the problems associated with the devaluation of the peso in Argentina, Codere wants to focus now on the challenge of digitization and growth in key markets. At the beginning of 2018, it reduced its forecast of gross operating profit (EBITDA) adjusted for exchange rate fluctuations, but has not separated from this path since. It expects to close the annual results account with the announced 280 million-285 million.

The digital plan takes as reference what Codere calls the "clientecentrism", in which the relationship with the consumer is enhanced thanks to new technologies, both in the in-game gaming rooms and in the online channel.

The group has just renewed most of its gambling licenses in Mexico, which has already become its main market, providing 35% of the ebitda, compared to about 31% in Argentina and 9% in Spain in the third quarter of 2018. In the national market, the investments of the last three years exceed 50 million euros and will now begin to bear fruit in businesses such as sports betting, which raise their revenues at rates of between 15% and 20%.

While studying the situation of the sector in Italy, very hit by regulation - all operators are evaluating exit or consolidation formulas -, Codere looks closely at the opportunities in Argentina, where the online activity has just been regulated, and in Brazil, that is preparing to legalize it after several decades of prohibition of private bets.

Source: GMB / Expansión