Gambling Industry Acquisitions and Financial News — Weekly Round-up for April 21, 2018

By Brian Cullingworth, Last updated Apr 21, 2018

Cherry Preliminary Results Set To Outstrip Forecasts

Online Gaming division outperforms expectations

Cherry AB has revealed better than expected growth in revenues and EBITDA ahead of the release of its first quarter 2018 report.

The company said revenues are now expected to reach SEK 675 million (Q1/2017: SEK 541 million) and EBITDA SEK 188 million (Q1/2017: SEK 83 million) with EBITDA margins at 28 percent (Q1/2017: 15 percent).

The performance is largely attributed to Cherry’s Online Gaming division which enjoyed ‘favourable market growth’ as well as its Online Marketing and Game Development businesses.

LeoVegas Adds New Acquisition Rocket X To Bede Platform

IPS assets remain on Bede platform

Following the acquisition of Intellectual and Property Software (IPS) Ltd in January 2018, LeoVegas Mobile Gaming Group chose to keep its sites, including top brands, Slotboss, Bet UK and UK Casino on the Bede Platform.

The multi-year agreement between the Bede platform specialists and the Swedish gametech company sees the operator join the likes of The Rank Group and Sun International on Bede’s award gaming platform.

Now Leo Vegas’ most recent acquisition, Rocket X has also been added to the platform and will be able to leverage the advantages of marketing tools and premium content from first class gaming suppliers, such as Yggdrasil, NetEnt, Evolution and IGT.

Ross Haselhurst, commercial director of Bede Gaming, said: “LeoVegas is an innovative, mobile-focused operator at the cutting edge of the online sector.

They now have the market’s most effective customer acquisition models through Rocket X and a culture that aligns well with Bede..

“The growth on our platform has been phenomenal, and we are confident that, under the LeoVegas umbrella, Rocket X will build on this success in the UK and beyond as they continue to enhance their outstanding online casino offering.” Mark Good, CEO of Rocket X, said: “We are committed to building the industry’s most intuitive and comprehensive online gaming experience, and have started 2018 strongly with a series of important agreements.

“The flexibility and solidity of Bede’s platform is an important factor for our growth.”

Ambitious Plans Laid Out By Mobile Gambling Group

LeoVegas directors raise financial targets for 2020

Against the background of strong organic growth and several acquisitions contributing to LeoVegas‘ expansion, the Board of Directors has adopted new financial targets for the Group, according to a company statement released Thursday.

LeoVegas is targeting at least Euro 600 million year in revenue by 2020 and at least Euro 100 million in EBITDA in the same timeframe.

Chief executive Gustaf Hagman said:

“Following our acquisitions we have now drawn up new financial targets. In 2015 we set the target to achieve Euro 300 million in revenue by 2018. The new revenue target entails a doubling to at least Euro 600 million by 2020 and does not include potential major acquisitions.

“At the same time, we are aiming for EBITDA of at least Euro 100 million, which implies adjusted earnings per share of at least SEK 8 by 2020. The new targets confirm our continued focus on strong growth combined with a sound view of profitability.

“The targets create transparency regarding where we are headed, both internally and externally,” he concluded, listing the long term objectives of the group: * Long-term organic growth that outperforms the online gaming market; * Long-term EBITDA margin of no less than 15 percent assuming that 100 percent of revenue will be generated in regulated markets subject to gambling tax; * To pay a dividend of at least 50 percent of profit after tax.

LeoVegas’ financial report for the first quarter of 2018 will be published on 2 May.

Another Sound Quarter For Live Dealer Technology And Games Provider

Metrics on the upward trend for Evolution Gaming in Q1-2018

Live dealer technology and games provider Evolution Gaming has continued to keep its investors happy with another set of quarterly results, reporting that in the three months ended March 31 it achieved the following highlights: * Operating revenue up 30 percent at Euro 51.6 million (Q11-2017: Euro 39.7 million);

* Profit rose from Euro 12.7 million to Euro 16.5 million; * EBITDA up 29 percent from Euro 17 million to Euro 22 million on a margin of 42.6 pertcent;

* Quarterly EPS at Euro 0.46, up from Euro 0.35 in the same period last year.

Chief executive Martin Carlesund reported:

“Overall, the first quarter of 2018 has been characterised by growth and profitability in line with our expectations, considering the ongoing investments in both new studios and games.

“We noted a clearly stronger performance at the end of the period, with good growth and earnings, compared with the beginning of the period.

“We have a very intensive period ahead of us with many tables to be delivered and go live. With extended studio capacity and new and upcoming game launches, we are increasing our lead over our competitors.”

Budget Boost For Swedish Gambling Regulator

Lotteriinspektionen gets an additional SEK 19 million (Euro 1.8 million) to help handle the soon-to-be-liberalised market

Sweden’s national gambling regulator Lotteriinspektionen has received a SEK 19 million (Euro 1.8 million) operational budgetary boost by the government to help it expand resources to manage the forthcoming liberalisation of the market early next year (see previous InfoPowa reports).

The additional funds increase the regulator’s total annual budget to SEK 70 million (Euro 6.7 million) – a 37 percent increase.

Earlier this year the director general of Lotteriinspektionen, Camilla Rosenberg, warned that the regulator would need additional IT resources and a larger headcount to properly manage the additional workload imposed by the changes.

Good Growth In Danish Online Gambling Market

Overall revenues up 3.48 percent y-o-y at DKK 9,220 million ($1.53 billion)

Danish gamblers wagered more on betting and casino games than the European average last year, driving overall revenues up 3.48 percent year-on-year to reach DKK 9,220 million.

And online activity contributed 51.5 percent of overall GGR, with mobile channels delivering 54.5 percent of online revenue. This includes GGR from online casinos, online betting, and online sales of lottery products.

Danes spend an average of 38.50 DKK on gambling products per week. If a Dane gambles online, there is a nearly fifty-fifty chance that they are male and under 35.

According to the Danish regulator Spillemyndigheden, total GGR for the Danish gambling market was DKK 9.2 billion in 2017, made up as follows:

  • GGR for gaming machines: DKK 1.5 billion;
  • Land-based casinos: DKK 0.4 billion;
  • Lotteries: DKK 3.1 billion;
  • Betting on horse racing: DKK 0.1 billion;
  • Betting: DKK 2.3 billion – 7.4 percent up (by DKK161 million) on the preceding year;
  • Online casinos: DKK 1.8 billion. Revenues were DKK 234.5 million (15.6 percent) up on the same period in 2016;
  • By contrast, land casino revenues dropped 1.3 percent;
  • Online casino and betting combined delivered 51.5 percent of all GGR; The national registry of self-excluded players grew 46 percent, increasing the total to date to 12,877;

Current legislative moves designed to liberalise online bingo and betting on horse racing, dog racing, and pigeon racing came into effect on the 1 January 2018 and when fully implemented are likely to boost the overall market higher.

Brian Cullingworth

Infopowa news was a staple of Casinomeister’s news from 2000 until 2019. Brian Cullingworth was the main writer, contributor, and was one of the most knowledgeable persons I have ever known involved in the online casino industry.

We first met in January 2001 at the ICE in London where I observed him going booth to booth interviewing online casino, software, and licensing jurisdiction representatives. Brian was also heavily involved with our forum as “Jetset“, he was involved as an informal consultant to eCOGRA, the OPA, and was a player advocate who assisted countless aggrieved players with his connections to industry folks. He also published “Casino Cautions” via Infopowa news for quite a number of years. These can be found in our news archives.

His passing in February 2019 was a dark day for us. He will be forever missed.

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