Allwyn Continues Evaluation for Secondary Stock Exchange Listing

Allwyn is actively assessing its options for a secondary market listing, with Group CFO Kenneth Morton indicating that both London and New York are strong contenders. Morton highlighted the company's substantial business presence across Europe, particularly the UK, and in the United States, as a key factor in this decision.

Morton clarified the company's intent to pursue this listing to "secure the biggest possible benefits for our shareholders." He detailed these advantages as improved liquidity, attracting a broader investor base, and increasing analyst coverage. The decision-making process is focused on maximizing these benefits, acknowledging a comfortable position with several viable choices.

Merger Context and Existing Listing

The pursuit of a secondary listing was initially revealed in October as part of Allwyn's €16 billion merger with Greek lottery firm OPAP. That transaction concluded earlier this year, following a shareholder vote in February where "strong" support was reported. Morton explained that the recent completion of the "pretty complicated transaction" with OPAP has kept the company busy, with the listing now being the next priority.

As a result of the merger, Allwyn now manages OPAP’s listing on the Athens Stock Exchange, where its shares are currently priced at €13.86. During the deal's announcement, Allwyn CEO Robert Chvátal assured investors that the Athens listing would not involve issuing new equity and that the public free float would remain largely consistent.

Market Trends and LSE Challenges

Recent developments in the iGaming industry's public markets could influence Allwyn's choice. For instance, Flutter Entertainment decided in June to cease its secondary listing on the London Stock Exchange (LSE). This move, announced on June 12 after a review highlighted in Flutter's May 7 Q1 results, was attributed to low trading volumes on the LSE and the rising costs and administrative complexity of maintaining a dual listing.

The LSE has experienced a decline, with as many as 88 companies either delisting or moving their primary listing away from it in 2024. Data from Bloomberg indicated London fell to 20th in global IPO rankings for 2024, recording only 18 new listings. Companies frequently cite the appeal of deeper capital pools and enhanced liquidity available on US exchanges as reasons for such shifts.

Financial Performance and Sector Stability

Financially, Allwyn reported robust Q1 total revenue of €2.39 billion, an 8% increase. Net revenue also climbed significantly by 21% year-on-year to €1.2 billion. Morton highlighted the inherent stability of the lottery sector, noting that unlike iGaming and sports betting operators that frequently face tax adjustments across Europe, the lottery vertical is largely shielded from such hikes.

Referencing a €14 million impact from Austrian tax increases in Q1, Morton clarified that these were broad-based changes affecting multiple sectors, not just gambling. He noted that modifying tax rates for lotteries is generally more challenging for governments, often requiring contract alterations rather than simple statutory amendments. Morton also observed a "clear trend" in some of Allwyn's markets towards stricter enforcement against illegal gambling, which he confirmed "is definitely to our benefit" as an established operator.