A fresh start

Jackpotjoy plc (JPJ) has market-leading brands in female-oriented gaming. Our forecast 2017/18 EBITDA growth is 6% pa, underlying cash flows are strong and leverage should reduce rapidly after a major earn-out is paid this June. The rating is very low given its regulated bias (78%) with a 2017e P/E of only 6.6x. With a new, highly experienced UK management team and debt finance now in place, we expect a re-rating towards the sector 2017e P/E average of 12.1x, which would imply a valuation of c 900p per share.