20/04/2007
February’s recommendation of Gaming VC, the internet gambling business focused on German-speaking Europe, is paying dividends – literally. Not only have the shares gone up from 93p to a current 142.5p (after touching 155p) but the company has proposed a 13p final dividend. Together with the interim payment of the same amount, that puts the shares on a yield of 18%.
Now, clearly, that yield reeks of danger. Gaming VC has just reported a thumping loss, but it actually made a profit of €4.5 million if a goodwill impairment charge of €33 million is ignored. The reason for that charge is the continuing battle between the German federal states and the EU Commission. The former want to retain a monopoly on gambling. The latter (supported by the EU legal authorities) says that is untenable and any business licensed in another EU state has the right to operate in a second.
Gaming VC remains optimistic about retaining its German business and wants to expand into Italy and elsewhere. The trouble is, its last attempt to diversify with a Spanish gambling operation was less than successful. For now, continue to hold – and look forward to spending that dividend.
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| AIM | £36.58m |
117.50p
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0.00p
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| Other company articles: |
| 11/07/2008 |
| 28/04/2008 |
| 28/09/2007 |
| 20/04/2007 |
| 09/03/2007 |
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