Online Segment Revenue Contribution: 32% of the group's revenues, setting a new record.

Release Date: March 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Greek Organisation of Football Prognostics SA (GOFPY) recorded exceptional performance in Q4 2024, driven by the Giga Jackpot in Joker and strong sports betting results. The online segment contributed a robust 32% of the group's revenues, setting a new record and highlighting the company's digital strategy focus. Sports betting performance was notably boosted by the EURO '24 tournament and favorable payout results. The company attracted a significant number of new players to both online and retail sports betting, contributing to overall success. GOFPY completed a medium-sized buyback program of EUR150 million, complementing its commitment to paying maximum possible dividends.

Negative Points

The company anticipates low single-digit growth for 2025 due to tough comparisons from exceptional 2024 performance. There is uncertainty about the sustainability of sports betting growth and margins, with potential saturation in customer engagement. Cost pressures are present due to salary adjustments needed to retain and attract talent in a competitive market, particularly in technology and digital marketing. Marketing and sponsorship costs are increasing significantly due to high demand and competition in the market. The company faces challenges in renewing and securing licenses, with ongoing discussions influenced by recent government reshuffling.

Q & A Highlights

Warning! GuruFocus has detected 5 Warning Signs with KNOP.

Q: What factors contributed to the 2024 top-line performance exceeding guidance by nearly EUR100 million, and how does this affect the 2025 outlook? A: Jan Karas, CEO, explained that the exceptional performance was driven by strong sports betting, particularly due to the EURO '24 tournament, high Joker performance with significant jackpot rollovers, and robust online casino growth. These factors contributed to surpassing the 2024 guidance. For 2025, the company anticipates low single-digit growth due to the high comparison base set by these exceptional events.

Q: Can you elaborate on the 2025 outlook for online and retail channels, and how this impacts margins? A: Jan Karas noted that while online performance was strong in 2024, the company remains cautious about sustainability in sports betting margins. Online is expected to continue growing, potentially at low double-digit rates, but retail may face challenges due to the high base set by 2024 events. This channel mix could lead to lower margins year-on-year.

Story Continues

Q: What is the company's approach to shareholder remuneration, including dividends and buybacks? A: An unidentified company representative stated that the company is committed to distributing dividends exceeding net profits, with a minimum of EUR1 per share. They completed a EUR150 million buyback program, which complements the dividend policy. For 2025, dividends are expected to be similar to 2024 levels, with buybacks considered based on cash flow and capital requirements.

Q: How does the recent strategic move by the parent company, acquiring a stake in an online competitor, affect OPAP? A: Jan Karas clarified that this is a strategic decision by the parent company, and OPAP remains in a competitive environment with no changes planned in their setup. The competitor operates under its own license, and OPAP continues to focus on its strategic goals.

Q: Are there any updates on the company's licenses, including the Euro Jackpot and Cyprus licenses? A: Jan Karas mentioned ongoing discussions with state representatives regarding the Hellenic lottery license, influenced by recent government changes. The company is confident in securing future licenses, including the Euro Jackpot and Cyprus licenses, based on past successes.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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