Davy Research

Gaming

Australian tax increases; reducing William Hill and Ladbrokes Coral 2019 earnings forecasts for POC
Gaming
Paddy Power Betfair | GAN | William Hill plc | Ladbrokes Coral Group plc

DAVY VIEW

In line with our recent move to apply a federal 15% point of consumption (POC) tax to our Paddy Power Betfair (PPB) Australian forecasts, we now do the same for William Hill (WMH) and Ladbrokes Coral (LCL). We assume that the new charge comes into effect on January 1st 2019. While there is no certainty that the federal government will make this change, we believe individual states will likely go ahead and introduce a similar tax anyway, as evidenced by Western Australia’s decision last week to introduce a 15% charge from 2019. As a result, we believe that the Australian divisions of both LCL and WMH will have to materially cut costs to avoid loss making outcomes in Australia.

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  • RATINGS AND PRICE CORRECT AT TIME OF ISSUE


  • GAN

    Closing Price: 2375p

  • RATING 05/11/14

  • PREVIOUS RATING 12/02/14

    Under Review

  • Ladbrokes Coral Group plc

    Closing Price: 11810p

  • RATING 18/04/17

  • PREVIOUS RATING 28/07/15

    Neutral

  • William Hill plc

    Closing Price: 24400p

  • RATING 13/02/14

  • PREVIOUS RATING 16/02/11

    Outperform

  • Paddy Power Betfair

    Closing Price: 723000p

  • RATING 29/08/17

  • PREVIOUS RATING 18/09/15

    Outperform

Analyst(S)

Gaming

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