Financial Reports and Trading Updates — Weekly Round-up for April 28, 2017

By Brian Cullingworth, Last updated Apr 28, 2017

NYX Gaming Group Full 2016 Metrics Soar

Strong full year results set the stage for an equally impressive new fiscal year

NYX Gaming Group Limited has delivered a stomping full year 2016 fiscal report, for the 12 month period ending December 31, 2016, attributing its robust performance to new customer launches, contribution from its newly acquired OpenBet business, and increased gaming revenues from existing customers.

Key performance indicators include:

–    Revenue of CAD 163.7 million, or growth of 213.0 percent year-over-year;

–    Revenue grew 46.8 percent year-over-year excluding the impact of the OpenBet and Chartwell and Cryptologic acquisitions;

–    Royalty and license revenue of CAD 90.7 million, or growth of 105.4 percent year-over-year;

–    Gross profit of CAD 144.2 million, or 88.1 percent of revenue compared to 85.6 percent of revenue in 2015;

–    Adjusted EBITDA of CAD 42.7 million, an increase of 305.3 percent over the prior year.

“This was a transformational year for NYX. With the integration of OpenBet now substantially complete, we are ideally positioned as a leading provider of sportsbook, gaming technology, and NextGen content to the regulated gaming market,” commented Matt Davey, CEO of NYX Gaming Group.

“Since the beginning of 2017, our new operating model has been delivering an improved cost structure that, combined with our growth strategy, will result in increased operating leverage.”

The future looks bright as NYX’s development pipeline is bursting with commitments from 24 customers that had not yet launched at year end, the company revealed.

As of March 31, 2017, NYX had signed 11 new deals and launched six new clients since close of the its 2016 fiscal period.

Good First Quarter For Philippines Regulator

Pagcor net income up almost 27 percent year-on-year.

Despite the uproar over the past year in the Philippines online gambling sector, national regulator and licensor Philippine Amusement and Gaming Corp. (Pagcor) has managed to produce a Q1-2017 net income statement up 26.9 percent on a year-on-year basis.

Most of that comes from the land casinos operated by the organisation in an unusual both-operator-and-regulator situation which could change, if the Finance Ministry has its way and persuades Pagcor to sell off its land casino assets to raise funds for the national budget.

The organisation reported a 26.9 percent rise in net income during to quarter to P1.3 billion (around US$26.4 million).

Income from gaming totalled P14 billion, an increase of 26.7 percent y-o-y, whilst total expenditure reached P6.4 billion…a year-on-year increase of 36.7 percent.

Pagcor chairwoman Andrea Domingo attributed the group’s general improvement to management changes, more efficient operations and the market itself.

PMU Report Return To Growth In Equestrian Sector

During first quarter 2017

French horserace betting operator, Pari Mutuel Urbain, reported a return to growth in the horserace betting sector during its first quarter 2017.

A trading update revealed the continuation and/or launch of a series of twenty plus business initiatives as PMU’s updated transformation strategy continues to focus on achieving sustainable growth.

First quarter performance indicators for the 12-week period ending March 31, 2017, include:

–    Gross gaming revenue amounted to Euro 626.9 million, a 0.6 percent decline.

–    Overall, equestrian stakes returned to growth, up 0.6 percent to Euro 2.324 billion.

–    Local equestrian stakes declined 1.5 percent to reach Euro 2.021 billion.

–    International horserace betting stakes grew 17.3 percent to reach Euro 302 million.

–    Sportsbetting grew 5.4 percent to reach Euro 78 million.

–    Poker stakes continued to decline to Euro 145 million, down 3.2 percent.

–    Total activity was up 0.5 percent to reach Euro 2.546 billion.

Irish Stock Exchange Admits Paddy Power-Betfair

Merged company approved for trading on the main securities market

The board of the Irish Stock Exchange announced Tuesday that it has approved the admission of Paddy Power Betfair plc on the Official List and trading on the Main Securities Market of the ISE.

Kindred Off To A Good 2017 Start

Online gambling group benefits from a bigger European sports betting and igaming portfolio of brands and assets

The Kindred Group, a Swedish-listed online gambling corporate previously known as Unibet plc, has posted a strong start to 2017 with Q1-2017 results that that have clearly benefitted from a larger portfolio of betting and igaming brands.

The company highlighted:

* New record group revenues of GBP 153 million, a year-on-year rise of 25 percent;

* Mobile accounted for 73 percent of Kindred Group’s Q1 revenue;

* Sports betting stakes up at a record GBP 1.1 billion.

* Active player numbers up at record levels at over 1.2 million;

* Underlying period EBITDA of GBP 30.3 million (Q1-2016: GBP28.5 million);

* Operating profits down at GBP 18.2 million (Q1-2016: GBP 22.5 million) due to M&A costs associated with the GBP 175 million acquisition of online gaming group 32Red plc;

* NPAT down at GBP 16.3 million (Q1-2016: GBP 20 million).

CEO Henrik Tjärnström reported to shareholders:

“In line with the fundamentals of our growth strategy, we have continued to invest heavily in marketing for both new customer acquisition and reactivation of existing customers. While this may reduce profits in the short term, we are confident that, as we have previously proven, this will drive sustained growth in gross winnings revenue and profits. For the quarter, marketing was 29 percent of gross winnings revenue; however, for the full year we still expect it to average a few percentage points below 30 percent.

“Our cash offer for the UK operator 32Red will, from the second quarter of 2017, instantaneously increase both revenue and profit from the very significant UK market. This acquisition will supplement our current strong organic growth and will significantly increase the Group’s overall growth in the future, especially during the first twelve months. The acquisition will also bring new expertise into the Group and offer both immediate and future opportunities for both revenue and cost synergies.”

Kambi First Quarter Proves Challenging

Punter-friendly results impact average trading margin

Player-friendly results put a dent in an otherwise pleasing first quarter performance for Kambi Group.

Key performance highlights for the 12-week period ending 31 March 2017 include:

–    Revenue of Euro 14.2 million (Q1/2016: Euro 13.3 million), up 7 percent.

–    Operating profit (EBIT) was Euro 1.4 million (Q1/2016: 2.0 million), with a margin of 10 Percent (Q1/2016: 15 Percent)

–    Profit after tax was Euro 1.1 million (Q1/2016: Euro 1.8 million).

–    Earnings per share were Euro 0.036 (Q1/2016: Euro 0.059)

–    Cash flow from operating and investing activities (excluding working capital) amounted to Euro 0.8 million (Q1/2016: 1.4 million).

–    Operator turnover growth of 27 Percent.

“I’m very pleased to see continued success from our operators, as demonstrated by their ongoing rapid growth trend,” Kristian Nylén, CEO of Kambi, said.

“The latter part of the quarter resulted in an unusually high number of player-friendly outcomes in the major football leagues, which impacted the trading margin. It is in the nature of the business for the trading margin to fluctuate between quarters depending on the result of sporting events.

“The underlying strong performance and momentum within the company is unaffected by these events. This makes me confident in our strategy and business model which creates value for our operators.”

Betsson Reports Continued Growth In Q1-2017

Nordic and Western European regions both yielded increases in revenue.

Online gambling group Betsson AB has posted generally positive Q1-2017 figures, highlighting the following:

* Casino revenue up year-on-year by 23 percent at SEK 822.9 million;

* Sports betting revenue down 15 percent at 250.3 million on flat margins;

*Active players up 13 percent at 607,000;

* Overall revenue up 10.2 percent to SEK 1,102 million;

* EBIT of SEK 241 million, down 4 percent reflecting a negative impact by currency moves of SEK 19.1 million;

* EBIT margin down 3 percent at 22 percent;

* Net income down 8 percent at SEK 214.4 million;

* Gross profit up 8 percent at SEK 806.3 million;

* Nordic revenues grew by 13.5 percent y-o-y;

* Western Europe revenues grew 15.6 percent y-o-y;

* Total deposits SEK 3,789.2 million;

• Acquisitions of NetPlay TV in the UK and Premier Casino in Spain were completed during the quarter.

Betsson CEO and president Ulrik Bengtsson reported:

“The combined effect of currency fluctuations had a negative impact on operating income of SEK 19.1 million. In addition, a high proportion of “player-friendly” results in the big football leagues resulted in a lower sportsbook margin than the eight quarter rolling average and thereby lower revenue. The operating income was SEK 240.9 million, corresponding to an operating margin of 21.9 percent.

“Some of our fastest growing markets are locally regulated, and local betting duties were SEK 14.5 million more this quarter than for the same period previous year. The share of locally taxed revenues continues to increase and amounted to 20.3 percent, compared to 13.3 percent in the first quarter 2016. Meanwhile, less revenue from countries with higher margin had a negative impact on earnings during the quarter. We expect that margins will go down slightly as our revenue base transforms, but Betsson has well-balanced operations, and can absorb both temporary declines in revenue and increased costs over time.

“The region Central and Eastern Europe and Central Asia (CEECA) is still challenging with strong negative currency impacts on both gross revenue in the Sportsbook and on license revenues related to the associate Realm. The planned migration of Europe-Bet to Techsson was completed in March and the operator now has by far the region’s best mobile casino offer.

“The acquisitions of NetPlay TV in the UK and a locally licensed operator in Spain were closed March. The latter will be operated under the brand StarCasino going forward.

“The second quarter is normally seasonally weak. The quarter has started with higher revenues than the daily average for the second quarter last year, but lower than the daily average revenue for the first quarter 2017. The underlying activity remains strong.”

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