OPAP - Well capitalised to weather COVID-19

FY19 results were in line demonstrating a strong underlying business, but these have been overshadowed by the impact of COVID-19 on FY20. Management estimates that the disruption (shop closures) will have an impact on monthly gross gaming revenues (GGR) of €130–140m and EBITDA of €50–53m. Our new forecasts assume a €400m revenue loss equivalent to three months of full disruption during FY20 and we also have reduced FY21 GGR forecasts by 9% to reflect the potential impact on consumer confidence. Nonetheless, the balance sheet remains robust and we forecast a final dividend for FY20 (payable in FY21). The shares trade at 6.8x EV/EBITDA and 12.7x P/E for FY21 with an 11.8% yield.