Financial News — Weekly Round-up for July 14, 2017

By Brian Cullingworth, Last updated Jul 14, 2017

Netent Releases Interim Report

Another sound half-year for Swedish online gambling giant

The NetEnt online gambling group has posted an interim report covering performance in the first half of 2017, with CEO and president Per Eriksson highlighting continued solid growth, higher profitability and a strong cash flow.

The most important growth drivers were mobile games, along with the regulated markets in Great Britain and Italy.

“During June, mobile games contributed more than half of our revenues while Britain was our largest geographic market for the quarter,” Eriksson reported. “For the second half of 2017, we see conditions for continued solid growth.”

Second quarter 2017 highlights from the report include:

* Revenues for the second quarter increased by 15.5 percent to SEK 407 (352) million;
* Operating profit amounted to SEK 145 (122) million, an increase of 18.5 percent;
* Operating margin was 35.7 (34.8) percent;
* Profit after tax amounted to SEK 134 (113) million, an increase of 17.9 percent;
* Earnings per share amounted to SEK 0.56 (0.47) before and after dilution;
* 6 new customer agreements were signed and 8 new customers’ casinos were launched.

For the half-year to end June, highlights include:

* Revenues for the first six months increased by 15.4 percent to SEK 805 (697) million;
* Operating profit amounted to SEK 281 (251) million, an increase of 12.2 percent;
* Operating margin was 35.0 (35.9) percent;
* Profit after tax amounted to SEK 258 (235) million, an increase of 9.6 percent;
* Earnings per share amounted to SEK 1.07 (0.98) before and after dilution;
* 21 new customer agreements were signed and 14 new customers’ casinos were launched.

Important events in the second quarter:

* A supplier license was obtained in British Columbia, Canada;
* Games were launched on the regulated market in Serbia;
* Table games were introduced for customers in Spain;
* Cash distribution of SEK 540 million (2.25 kr/share) to shareholders;
* The number of gaming transactions on NetEnt systems was 10.1 billion during the quarter, corresponding to a y-o-y increase of 14.4 percent.

Eriksson said that whilst revenue growth in Sweden has been relatively slow, Great Britain and Italy continue to provide good results and great potential, whilst fast growth is being experienced in regulated markets such as Denmark, Belgium, Spain and New Jersey, and Spain continues to hold promise.

“The future outlook remains bright for the remainder of 2017,” said Eriksson. “We see conditions for continued solid growth supported by new games, increasing market shares in the UK, mobile growth, many new customers to launch and our expansion in North America.

“We continue to hire more employees and develop our platform. We strengthen the organisation to increase our output capacity, enter more regulated markets and integrate a large number of new customers. With this in mind, we foresee an ongoing need to invest during the rest of 2017. We do this to enable continued solid growth with increasing economies of scale for NetEnt going forward.”

Interwetten First Half Results Below Board Expectations

Impacted by extraordinary punter-friendly results

In an industry update, online sportsbetting and casino operator Interwetten Group reviewed first half year 2017 results saying a number of bad margin months negatively impacted a 23 percent increase in turnover which was achieved despite the absence of a major sporting event.

Sports margin for the first six months was down 1.9 percent (-16 percent) and sports revenues declined by 13 percent despite an 11 percent increase in sports betting turnover, the company said, attributing the result to extraordinary punter-friendly results early in the first half.

Total gross gaming revenue grew 3 percent to reach Euro 33.8 million during the period under review.  EBITDA as well as Net-Profit were broadly flat compared to H1/2016 with EBITDA amounting to Euro 6.6 million and Net-Profit to Euro 5.7 million.

Werner Becher, for the Interwetten Board of Directors, commenting on the results, said:

“In recent years, we were spoiled by constant double-digit growth rates. Fortunately, the Interwetten Group is very profitable and we can easily cope with a number of bad margin months.

“On the other hand, I am convinced that not having met our expectations for H1 will give our team an extra kick to push even harder.”

Looking ahead, Interwetten is preparing to enter the the Swedish market supported by the development of two new TV campaigns set for launch in Sweden in September.

Sweden will rank as the company’s sixth core market next to Germany, Austria, Switzerland, Spain and Greece, the company said.

Online Casino Technology Provider Lists On Nasdaq North

Stockholm exchange welcomes latest member

Trading in Aspire Global plc shares on the Nasdaq First North Premier exchange in Stockholm commenced Tuesday, making the online gambling technology B2B provider the 71st company to be admitted to trading on Nasdaq’s Nordic markets in 2017.

Aspire Global was founded in 2005 and is headquartered in Silema, Malta. The company and its owners raised $38.8 million at a company value of $155 million. The main shareholders are Barak Matalon, soccer agent Pini Zahavi and his partner at Charlton Communications sports channel, and Jerusalem Post owner Eli Azur.

Tsachi Maimon, CEO of Aspire Global, said in a company statement:

“We have met a fantastic interest from investors, including some established and renowned firms. I believe the strong demand for subscribing to Aspire Global’s shares confirms a high level of confidence in our strategy, the strength of our unique offering and the great potential of our iGaming platform within the market.”

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