CryptoLogic Expected Take Off
Last week The Guardian said that it expects CryptoLogic's (CRYP.L) stock to get a boost in the next few weeks following meetings between its Canadian management and U.K. institutions and analysts. The gaming software company, which earns the majority of its revenue through recurring royalties, is profitable, pays dividends and has US$58 million (£35 million) in the bank. Since its emergence on the London stock exchange last month, Cryptologic's shares have seen little trading, but its stock price rose 50p on Oct. 8 to close at 625p, where it has lingered ever since.
Stanley Leisure and William Hill Rumors
London Telegraph on Wednesday reported rumors of a merger between Stanley Leisure (SLY.L) and William Hill (WHM), both of which experienced a rise in share price that day, with Stanley Leisure increasing 3.5p to finish at 352.5p and William Hill increasing 4.5p to finish at 335p. Since then, Stanley Leisure has risen 5p. and Willam Hill has fallen 5p.
GTECH Announces Cash Dividend and Senior Note Offering
GTECH Holdings Corporation's (GTK) board of directors announced Oct. 8 that a quarterly cash dividend of $0.17 per share would be paid on Oct. 31, 2003 to all of its shareholders on record as of Oct. 15, 2003.
The company also announced that it would offer $200 million in an aggregate principal amount of seven-year senior notes in an unregistered offering to qualified institutional buyers. GTECH plans to use the net proceeds for general corporate purposes, which will likely include future acquisitions. Due in October 2010, the senior notes will be unsecured and are guaranteed by GTECH and some of its subsidiaries. The notes offered are not registered under the Securities Act of 1933 or any state securities laws and therefore may not be offered or sold in the United States.
Fitch Ratings assigned the senior notes offering a BBB+ rating and affirmed the same BBB+ ratings for GTECH's $300 million senior unsecured bank facility due in 2006, which was undrawn as of Aug. 23, 2003, its $90 million 7.87 percent senior unsecured private placement notes due in 2007 and its $175 million 1.75 percent convertible bonds due in 2021. According to Fitch's press release, "GTECH's ratings reflect its leading global market position within the lottery industry, which provides generally predictable earnings and cash flow as well as diversification. The rating also encompasses a strong technology base and a history of high contract renewal rates. While domestic growth has slowed, opportunities for growth in international markets remains strong reflecting GTECH's solid operating performance and conservative financial policies."
MacAndrews & Forbes Acquires Part of Scientific Games
MacAndrews & Forbes will acquire the entire interest in Scientific Games (SGMS) held by Cirmatica Gaming, S.A., a subsidiary of Italy-based Lottomatica S.p.A. For approximately $194 million, MacAndres & Forbes will be acquiring a sum of Series A and Series B convertible preferred stock that is about 24 percent of the equity and voting power of Scientific Games. The closing will occur no later than Dec. 5, 2003.
Zacks.com, a property of Zacks Investment Research, Inc. that compiles, analyzes and distributes investment research to both institutional and individual investors, has given Scientific Games a #2 buy ranking. Zacks says the ranking comes because of the group's acquisition of IGT OnLine Entertainment Systems, Inc, because it is a leading supplier to lotteries and pari-mutuel operators and because it is a licensed pari-mutuel gaming operator in Connecticut and the Netherlands. Zacks also cites the company's recent financial success, noting that, "Second quarter 2003 revenues increased 13 percent to $128.8 million from the $114.3 million reported in the second quarter of 2002. Pre-tax income also increased a whopping 111 percent to $19.6 million in the second quarter of 2003 from $9.3 million in the second quarter of 2002. Net income before the non-cash preferred stock dividend was $12.6 million or 14 cents per diluted share in the second quarter of 2003 compared to restated net income of $8.1 million or 11 cents per diluted share in the second quarter of 2002." Only 15 percent of all stocks that Zacks surveys receive a buy ranking.
Scientific Games Corporation will release its third-quarter 2003 financial report on Oct. 29, 2003 at 4:00 p.m. (U.S. Eastern) and will hold its conference call the next day at 8:30 a.m. The call can be accessed via telephone or webcast at http://www.scientificgames.com.