Cherry Group Posts Interim Q3 Results

By Casinomeister, Last updated Nov 11, 2016

Revenues and profits rise at Swedish gambling group

The mainly online Swedish gambling group Cherry AB posted its Q3-2016 interim results Wednesday, reporting revenues, EBITDA and after-tax profit all up among the following highlights:
* Revenues up 39 percent year-on-year at SEK 214 million (154.1);
* EBITDA increased 78 percent to SEK 30.9 million despite acquisition costs for ComeOn and a Nasdaq listing;
* Profit after tax of SEK 31.1 million (12.1), equivalent to SEK 1.33 (0.65) per share after dilution and minority interests;
* In July, Cherry acquired 49 percent of shares in ComeOn Malta Ltd. ComeOn's revenue amounted to SEK 263 million (up 36 percent y-o-y) and adjusted EBITDA of SEK 78 million (+115 percent). Cherry's share of ComeOn's earnings after acquisition depreciations amounted to SEK 21.9 million;
* Online gaming revenue grew organically by 39 percent and EBITDA reached SEK 18.1 million (11.5). These figures do not include ComeOn and Game Lounge. Game Lounge is now reported as a separate business area;
* Game Lounge's revenue grew by 167 percent and EBITDA increased 104 percent to SEK 6 million (2.9);
* Games developer Yggdrasil Gaming's revenue grew by 299 percent and EBITDA increased 385 percent to SEK 9.2 million (1.9);
* Restaurant Casino's revenue amounted to SEK 39.5 million (42.5) and EBITDA amounted to SEK 4.2 million (5.3).
The company also reported on its performance over the nine months to end September 2016:
* Revenues up 64 percent to SEK 583 million (356.2) and 49 percent of ComeOn was acquired;
* EBITDA increased by 472 percent year-on-year to SEK 71.4 million (12.5);
* After tax profit was SEK 57 million (-6.4) equivalent to SEK 2.41 (-0.72) per share after dilution & minority interest;
* Online Gaming revenue grew by 78 percent y-o-y and EBITDA amounted to SEK 35.5 million (-0.6);
* Online gambling active customers increased by as much as 47 percent y-o-y while deposited amounts were up by 38 percent;
* Game Lounge's revenue grew by 173 percent and EBITDA came in at SEK 13.6 million (7.0);
* Yggdrasil Gaming's revenue grew by 465 percent and EBITDA amounted to SEK 26.9 million (0.3);
* Restaurant Casino's revenue amounted to SEK 114.1 million (117.2) and EBITDA was SEK 11.8 million (14.5).
Management advised that the Come On acquisition is enjoying rapid organic growth and good profitability, and has updated its forecast for the full year 2016 and expects sales of approximately SEK 1,000 million with an operating profit of SEK 260 million.
The company is mulling a further bond issue under its existing bond in order to partially finance the acquisition of the remaining shares in ComeOn, provided the Board decides to exercise the option to acquire the remaining 51 percent of the shares.
A Nasdaq listing for Cherry in the first half of 2017 is being planned.
Cherry CEO Fredrik Burvall said that the company continues to grow substantially faster than the market.
"Our business areas provide Cherry with diversified and profitable revenues from four separate and strong business areas, with the potential for strong onwards development. To clearly illustrate our business, beginning from the third quarter of this year, the Board has decided to separately report Game Lounge, which is active in performance-based marketing. Cherry's online activities continue to grow substantially faster than the market and now accounts for 82 percent (72) of Group sales." he said.
Burvall noted that the i-gaming assets of Cherry were exhibiting strong organic growth as activity on the websites substantially grew, along with active players. During the quarter, gross gaming surplus from mobile devices increased by 116 percent and investment in upgrade the gaming sites with the latest technology and new product verticals continued.
Subsidiary Yggdrasil Gaming was singled out by Burvall for a special mention, applauding its outstanding performance as revenues grew by 299 percent with an EBITDA margin of 44 percent.
"The bet amount (bet turnover) increased by 445 percent. Mobile gaming accounted for 54 percent (35) of the total Gross Win Game," Burvall revealed, adding:
"Yggdrasil has, during the quarter, received two additional licences for the re-regulated market of Romania, creating opportunities for new contracts. Also during the quarter, three new and innovative quality games were delivered, which were well received by both customers and operators. The world's largest gaming operator, bet365, went live in August and a contract was signed with the operator Casumo. Yggdrasil continues to launch additional, innovative, and industry-first promotional tools… taking gamification to a new level."
"Our ambition is to continue to grow faster than the market, and we are well prepared to do this, both through organic growth and via acquisitions," Burvall concluded.

Online Casino News Courtesy of Infopowa

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