Mixed results in Gaming Realms H1-2018 report

News on 27 Sep 2018

Mobile real money and social games developer and publisher Gaming Realms has posted a mixed set of H1-2018 results, highlighting:

* Real money revenue up by 18 percent to GBP 4.1 million;

* Licensing revenue up by 175 percent at GBP 600,000;

* Revenue from social publishing declined by 48 percent to GBP 2.1 million following a reduction in marketing spend of 88 percent to GBP 200,000;

* Positive Adjusted EBITDA at GBP 400,000, an improvement from the GBP 1.1 million loss incurred in H1-2017;

* Cash at bank at end  June was GBP 400,000 prior to the receipt of a GBP 4.2 million cash payment from River UK Casino for the sale of the Gaming Realms UK B2C brands;

* Capitalised development costs were GBP 1.5 million, mostly investment in content and platform development;

Operational highlights included:

* Six new contracts were signed to license the company’s Slingo Originals portfolio of games in New Jersey, US, and Europe while new white label real money gambling sites for the Health Lottery were launched;

* The sale of the company’s affiliate business also raised GBP 2.4 million;

Post-period trading events included:

* Disposal of 70 percent of UK B2C brands to River UK Casino for up to GBP 23.1 million, with GBP 4.2 million received in August 2018. Of the remaining GBP 18.9 million, GBP 4.2 million will be received upon the completion of the June 2019 audit and up to GBP14.7 million will be subject to the earn out for the same period;

* Licensing revenue increased 88 percent in the 9 weeks post period end;

* Real Money Gaming revenue, excluding UK B2C brands sold, increased 10 percent in the 9 weeks post period end;

* Successful launch, on time and on budget, of a new faster mobile optimised gambling platform;

* Launch of ‘Slingo Originals’ games on GVC and Rank, also on time and budget, which have both been well received.

Patrick Southon, chief executive, said:

“Our strategy moving forward is to leverage our real money gaming platform and our market leading ‘Slingo Originals’ games library into the UK and international gaming markets. We believe that licensing our platform and content to leading brands and gaming operators will deliver high margin revenues and we have been very pleased with the results of our efforts over the first half of 2018. We look forward to delivering news about more developments on our strategy during the second half of the year.”

The Board expects the company to continue to incur capital expenditure on game and platform development, of approximately GBP 2.5 million per annum. However, given the sale of the assets to River UK Casino, the Board believes that the Group will have sufficient cash resources to cover these costs until such time as the Group is cash generative after all capitalised costs.

Alongside building on this strategy, Gaming Realms will continue to evaluate strategic opportunities for  non-core activities such as the social publishing business

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