Share Code: GRSP – Market Cap: R272m – EV/EBITDA: 4.1x

Business Overview: Good mix of mature & growing operations

• Goldrush Holdings (code: GRSP) is a well-run non-casino gambling operation listed on the JSE with material Bingo, Limited Payout Machine (LPM), Sports Betting (offline and online) operations all at various stages of growth, maturity and profitability.

• More recently, Goldrush holds a significant stake in the operator (from 1 June 2026) of the South African National Lottery for the next eight years (Sizekhaya) – we see particular value in this investment and, indeed, the market appears to have not priced this into Goldrush’s share price.

South African Gambling Sector: Changes, uncertainty, unknowns…

• Consumer trends in the gambling market have steadily shifted GGR towards more convenient gambling products; initially moving share from land-based casinos towards distributed LPMs and, more recently, shifting towards online gambling products.
• Lagging these consumer trends, the gambling sector regulation and tax regimes are likely to change in South Africa, with a range of possible outcomes that introduce both risk (and some opportunity) into the sector’s prospects.
• Irrespective of these changes, there is a steady deterioration in the economics of high fixed-cost casinos. Following consumer trends shifting share to more convenient gambling products, the market values groups with larger exposures in LPMs, bingo and online gambling higher than the operators of traditional casinos.

Forecast, Valuation and Implied Return: Sizekhaya not priced in

• Having built a segmental-level driven DCF that we have then consolidated upwards (taking minorities & net debt out along the way), we arrive at a fair value of c.1074cps for Goldrush’s preference shares (after taking out a 20% discount for their lack of voting rights). Rolling this forward, we arrive at a 12m TP of 1260cps implying a c.110% return from these levels.

• If we assume Sizekhaya is worth zero, our fair value drops to c.586cps or almost in line with the share price, implying that the market has not yet priced in Sizekhaya. In other words, you can pay fair value for Goldrush’s operations and are (nearly) guaranteed to win the lottery!