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1. Company Snapshot

1.a. Company Description

Pollard Banknote Limited, together with its subsidiaries, manufactures and sells a range of gaming products and services for the lottery and charitable gaming industries worldwide.The company operates through two segments, Lotteries and Charitable Gaming, and eGaming Systems.It designs, manufactures, and distributes instant tickets, as well as offers related services.


The company also offers a range of bingo and bingo-related products; manufactures and sells pull-tab tickets, as well as pull-tab ticket vending machines and pull-tab ticket counting machines.In addition, it provides licensed games; and various solutions for licensed games, such as ticket design and manufacturing, prize structure consultation, merchandise selection and fulfillment, publicity and promotional opportunities, and second chance draw management.Further, the company offers lottery ticket dispensers and point-of-sale displays; charitable gaming machines; and lottery management services and information systems, as well as warehouse and distribution services to lotteries.


Additionally, it engages in the interactive digital games and website development; and internet-based gaming businesses.The company was formerly known as 7510101 Canada Limited.Pollard Banknote Limited was founded in 1907 and is headquartered in Winnipeg, Canada.


Pollard Banknote Limited is a subsidiary of Pollard Equities Limited.

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1.b. Last Insights on PBL

Pollard Banknote Limited's recent performance was negatively impacted by its second-quarter 2025 earnings miss, with revenue growing only 3.5% to CA$142.7m. The company's financial results were likely affected by rising costs, although specific details are not provided. Additionally, while insider ownership is significant at 64%, recent buying activity may not be sufficient to offset concerns around the company's earnings. With no mention of new product launches, acquisitions, or legal issues, the focus remains on the company's ability to improve its financial performance.

1.c. Company Highlights

2. Pollard Banknote's Q3 2025 Earnings: A Strong Performance with Noteworthy Contract Wins

Pollard Banknote reported a strong financial performance in Q3 2025, with GAAP sales reaching a new quarterly record of $156.3 million and combined sales, including the proportionate share of NeoPollard joint venture revenue, hitting $187.3 million, also a new record. However, the company's gross profit decreased to $28.1 million, with a gross profit percentage of 18.0%, and adjusted EBITDA decreased slightly to $32.0 million. The earnings per share (EPS) came in at $0.37, below the estimated $0.527.

Publication Date: Nov -29

📋 Highlights
  • Major Contract Wins:: Secured a CAD 289M Belgium 12-year gaming platform contract and a CAD 375M California instant ticket contract.
  • Record Q3 Sales:: Achieved traditional GAAP sales of $156.3M and combined sales (including joint venture) of $187.3M, both new records.
  • Kansas iLottery Success:: Handled a $1B+ Powerball jackpot without issues and initiated initiatives to boost revenue growth and player acquisition.
  • Margin Pressures:: Gross profit dropped to $28.1M (18.0% margin) and adjusted EBITDA fell to $32.0M due to higher admin expenses and Kansas/Minnesota headwinds.

Contract Wins and Business Growth

The company achieved significant contract wins during the quarter, including a 12-year contract valued at approximately CAD 289 million to deliver and operate a next-generation gaming platform for Loterie Nationale, the National Lottery of Belgium, and a 6-year contract, with an option to renew for up to an additional 6 years, valued at CAD 375 million to supply instant ticket products and related services to the California State Lottery. These wins demonstrate Pollard Banknote's commitment to providing innovative omnichannel solutions to the lottery industry. As Douglas Pollard noted, these contracts reflect the value of their long-time existing relationships and their ability to innovate and create new solutions.

Outlook and Margin Expectations

The company expects a continuation of strong volumes and higher average selling prices in 2026, driven by the new California instant ticket contract and the Belgium contract. However, the gross margin experienced a decline in 2025 due to headwinds from Kansas and e-pull tabs in Minnesota. The company expects to see improvement in 2026 as the Kansas iLottery losses decrease and new initiatives are implemented to improve margins. Analysts estimate revenue growth at 8.6% for next year.

Valuation and Metrics

With a P/E Ratio of 14.78, P/B Ratio of 1.5, and EV/EBITDA of 6.37, the market seems to have a reasonable expectation of the company's future performance. The ROE of 10.61% and ROIC of 8.23% indicate a decent return on equity and invested capital. However, the Free Cash Flow Yield of -3.25% raises some concerns about the company's ability to generate cash.

3. NewsRoom

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Pollard Banknote Limited Just Missed EPS By 30%: Here's What Analysts Think Will Happen Next

Nov -15

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Pollard Banknote Ltd (PBKOF) Q3 2025 Earnings Call Highlights: Record Sales and Strategic Wins ...

Nov -13

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With 64% ownership, insiders at Pollard Banknote Limited (TSE:PBL) are pretty optimistic and have been buying recently

Nov -03

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Is Now The Time To Look At Buying Pollard Banknote Limited (TSE:PBL)?

Sep -11

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Pollard Banknote Second Quarter 2025 Earnings: Misses Expectations

Aug -15

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Pollard Banknote (TSE:PBL) shareholders have earned a 4.6% CAGR over the last five years

Aug -09

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Pollard Digital Games Studio Collaborates With Virginia Lottery to Launch eInstant Games

Jul -23

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Are Strong Financial Prospects The Force That Is Driving The Momentum In Pollard Banknote Limited's TSE:PBL) Stock?

Jul -21

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.08%)

6. Segments

Lottery

Expected Growth: 4%

The 4% growth of Pollard Banknote Limited's lottery segment is driven by increasing demand for digital lottery products, strategic partnerships, and geographic expansion into new markets. Additionally, the company's focus on innovation, such as the introduction of new games and platforms, has contributed to its growth.

Charitable

Expected Growth: 3%

Pollard Banknote Limited's charitable segment growth is driven by increasing demand for digital charitable gaming solutions, strategic partnerships with non-profit organizations, and expansion into new markets. Additionally, the company's focus on social responsibility and community engagement contributes to its growth.

eGaming Systems

Expected Growth: 6%

The 6% growth of eGaming Systems from Pollard Banknote Limited is driven by increasing demand for online gaming, rising adoption of digital lottery solutions, and growing popularity of instant games. Additionally, strategic partnerships, geographic expansion, and continuous innovation in game development and technology also contribute to the segment's growth.

7. Detailed Products

Instant Tickets

Pre-printed tickets with hidden prizes or messages, used for lotteries and charitable fundraising events.

Breakopen Tickets

Tickets with a hidden message or prize, used for fundraising events and charitable causes.

Pull-Tabs

Tickets with a hidden prize or message, used for fundraising events and charitable causes.

Bingo and Raffle Tickets

Customizable tickets for bingo and raffle games, used for fundraising events and charitable causes.

Digital Games

Interactive digital games for lotteries and charitable fundraising events.

Print Services

Secure printing services for lottery tickets, ballots, and other secure documents.

Gaming Systems

Comprehensive gaming systems for lotteries and charitable fundraising events.

iLottery Solutions

Online lottery solutions for lotteries and charitable fundraising events.

8. Pollard Banknote Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

Pollard Banknote Limited has a moderate threat of substitutes due to the presence of digital alternatives, but the company's focus on innovative products and services helps to mitigate this threat.

Bargaining Power Of Customers

Pollard Banknote Limited has a low bargaining power of customers due to its strong relationships with clients and its ability to provide customized solutions.

Bargaining Power Of Suppliers

Pollard Banknote Limited has a moderate bargaining power of suppliers due to its dependence on a few key suppliers, but the company's long-term contracts and strategic partnerships help to mitigate this risk.

Threat Of New Entrants

Pollard Banknote Limited has a high threat of new entrants due to the relatively low barriers to entry in the industry, but the company's strong brand recognition and established customer base help to mitigate this threat.

Intensity Of Rivalry

Pollard Banknote Limited operates in a highly competitive industry, with several established players, which leads to a high intensity of rivalry among competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 31.16%
Debt Cost 3.95%
Equity Weight 68.84%
Equity Cost 7.05%
WACC 6.08%
Leverage 45.25%

11. Quality Control: Pollard Banknote Limited passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.39$

Current Price

19.39$

Potential

-0.00%

Expected Cash-Flows