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Intertain has elevated their full-year guidance 2015 to reveal “solid and consistent growth” throughout their business assets, a strange move considering the damning analyst report that wiped 20% of their share price.The trading update released yesterday stated that Intertain’s revenue guidance had grown from CAD$355m (£173m) to $375m (£182m).Last year, Intertain also acquired Gamesys’ Jackpotjoy, Botemania and Starspins brands for £425m, raising their total adjusted net income from $106m (£52m) to $109m (£53m).“These changes to our 2015 guidance reflect the solid and consistent growth across our combined businesses,” John Kennedy FitzGerald, Intertain CEO, said.“The company continues to generate strong cash flow from operations and we are excited about the future. I want to thank our dedicated team who have helped us to surpass our guidance this year,” he added.
Criticised
This update was revealed shortly after New York hedge fun Spruce Point Capital published an uncomplimentary 120-page report criticising Intertain’s strategic ability and financial management. Numerous questions were raised in the report, including some over Intertain’s acquisition of Mandalay Media, Vera&John and Jackpotjoy brands.
Defended The Attack
Spruce Point has stated that Intertain’s £425m Gamesys deal has “more holes than Swiss cheese’, particularly regarding liscensing and earn-out agreements. They also allege that Intertain has not set aside funds to cover earn-outs from their acquisition of Mandalay Media and Vera&John.In response, Intertain has called the report “misleading and self-serving”, adding that it “stands behind the integrity” of public disclosures.Intertain’s share price fell by 2.4% to $8.99 when markets closed on Tuesday.