TIDMGMR
RNS Number : 6847I
Gaming Realms PLC
23 March 2018
23 March 2018
Gaming Realms plc
("Gaming Realms" or the "Company")
Sale of Affiliate Business and Trading Update
EBITDA positive for 2017
Gaming Realms plc (GMR.L), the developer, publisher and licensor
of mobile real money and social games, today announces that it has
sold its affiliate portals, bingoport and freebingohunter, for a
total consideration of GBP2.4 million to 1ST Leads Ltd ("1ST
Leads").
The sale of the affiliate portals is consistent with the
Company's strategy to focus its resources on its real money gaming
and content development businesses. The Company has also seen the
affiliate segment become more competitive, with revenue from the
affiliate business declining by 25% in 2017. The affiliate business
delivered GBP900,000 of net contribution (before central costs) in
2017 (2016: GBP1.14m).
1ST Leads has paid GBP2 million on closing, and a maximum of
GBP400,000 will be payable on 31 December 2018, subject to the
achievement of performance targets.
The Company intends to use the sale proceeds for the ongoing
marketing of its real money gaming brands and further development
of new gaming content.
Trading Update
Gaming Realms is also pleased to announce a trading update for
the twelve months to 31 December 2017, during which it generated
adjusted EBITDA of GBP0.7 million.
Financial Highlights (unaudited): 2017 2016
GBP'm GBP'm
Revenue excluding disposals 31.6 32.0
Adjusted EBITDA(1) (excluding
disposals) 0.7 (1.7)
(1) Before share based payments and restructure costs and
excludes unrealised foreign exchange losses
2017 Highlights:
Operating B2C gaming sites in the current UK market has become
more difficult over the last two years as a result of increased
point of consumption tax and additional legislation concerning
responsible gambling, which has further increased pressures on
margins. In spite of these headwinds, during 2017 the Company:
-- Delivered a maiden full year EBITDA of GBP0.7 million.
-- Grew real money gaming revenue by 5.5%, whilst reducing
marketing spend by 17% and having an increased operational focus on
responsible gambling.
-- Readdressed its social gaming business with the launch of
Slingo Arcade, a new app based on the Slingo Originals content.
This helped to partially offset a 13% overall decline in social
revenue. Social marketing spend was also reduced by 45%.
-- Developed a Remote Gaming Server ("RGS") platform and 11 new
games, enabling the Company to build the foundation of a successful
B2B licensing division. This has facilitated the licensing of
enhanced Slingo Originals content to operators in New Jersey and
Europe as well as Slingo Arcade as described above.
-- Secured a 10-year services agreement and GBP3.5 million
convertible loan with Jackpotjoy Group.
-- Completed the $4.5 million payment of final tranche relating to the Blastworks acquisition.
Current Trading and Outlook
The Company has had a strong start to 2018, with licensing
agreements signed with 888 Holdings and Golden Nugget Casino and
Slingo launching on Ladbrokes Coral's gaming sites. The Company is
also pleased to announce two further licensing deals with Gaming
Innovation Group and Leander Games, both of which will broaden the
distribution of Slingo content and make it available to their
respective operators.
The operational focus on real money gaming has seen player value
increase 24% during the first two months of 2018. In January 2018,
the Company announced that it had signed a partnership agreement
with the Health Lottery, which commenced in March and is already
showing promising early results.
Following the restructuring of the social gaming business in
2017, the Company is pleased to report that this business is now
EBITDA positive.
In addition to the above, management is examining other ways to
maximize value from the assets within the business to enhance
shareholder value.
The Company still expects overall EBITDA growth in 2018 but
acknowledges that the sale of Bingoport will reduce EBITDA in the
short term. However, it does expect to see the benefits of the
recently signed licensing agreements and real money gaming
partnerships come through later in the year, contributing to longer
term growth and looks forward to updating the market in due
course.
Patrick Southon, CEO, commented: "2017 was a year of significant
developments, with the Company delivering maiden positive EBITDA
and successfully focusing resources towards real money gaming and
licensing our Slingo Originals content to improve margins. The
disposal of the affiliate portals marks the completion of this
transition, and with further licensing opportunities to follow, we
believe that the Company is in line for improved bottom line growth
in 2018."
The Company will announce its preliminary results for the period
in early May 2018.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Enquiries:
Gaming Realms plc
Patrick Southon, CEO
Mark Segal, FD 0845 123 3773
Peel Hunt LLP, Nomad and
Broker
Dan Webster
George Sellar 020 7418 8900
Yellow Jersey
Charles Goodwin
Georgia Colkin
Abena Affum 07747 788 221
Notes to Editors
Gaming Realms creates and publishes innovative real money and
social games for mobile, with operations in the UK, U.S. and
Canada. Through its market leading mobile platform and unique IP
and brands, Gaming Realms is bringing together media, entertainment
and gaming assets in new game formats. The Gaming Realms management
team includes accomplished entrepreneurs and experienced executives
from a wide range of leading gaming and media companies.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCFKBDNDBKBONB
(END) Dow Jones Newswires
March 23, 2018 03:00 ET (07:00 GMT)
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