Gaming Realms Notes Significant Income Growth In H1 Due to Increase of Licensing Revenue

Gaming Realms announced an 18% year-on-year rise in revenue, primarily down to growth within its licensing division. In this period, the developer was also able to cut its losses.

From the beginning of the year to June 30, 2019…

… total continuing revenue amounted to £3.2m (€3.6m/$4.0m). It is up from £2.7m in the corresponding period last year.

Licensing overtook social activities and become the main source of income for the developer in the first half. However, the licensing revenue rocketing 167% year-on-year from £600,000 to £1.6m.

Revenue Boost Thanks to the Partners

A huge increase in licensing revenue was boosted by 13 partners going live throughout 2018 and the first half. The developer also added a number of games to its content portfolio, and signed a distribution agreement with Scientific Games, which was also beneficial to the company.

Chief executive, Patrick Southon, confirmed that licensing was the most responsible for the revenue growth.

“Our strategy to leverage our market leading ‘Slingo Originals’ games library into the UK and international gaming markets continue to gain momentum.

Licensing our content to leading brands and gaming operators is delivering high margin revenues and the disposal of the RMG assets has given us greater resources to invest in content creation,” he said.

Some of the Company Sections Not Doing So Well

In contrast, social revenue of the brand fell 29% – from £2.1m to £1.5m. Other revenue amounted to £100,000, and Gaming Realms noted that it is in the latter stages of rationalizing the social division.

On the other hand, the company managed to decrease its costs in the same period. Overall marketing costs were lowered from £194,862 to £113,220.

Still, the operating expenses were up slightly from £658,615 to £717,162, but the supplier also saw istrative expenses climb from £2.2m to £2.8m.

Earnings before interest, tax, depreciation, and amortization (EBITDA) fell from £195,462 to a loss of £946,052, mostly due from discontinued operations as the developer explained.

Adjusted EBITDA for continuing operations stood at a loss of £6,280. Compared to negative £441,133 last year, it is a quite improvement.

Total continuing EBITDA amounted to a loss of £427,178, a significant improvement compared to the negative £494,331 noted last year.

The Company is Satisfied with the H1 Results

Confirmation of the first half of the results comes after the sale finalization of the company’s Bear Group B2C subsidiary to River iGaming in July. This deal was worth a total consideration of £11.5m.

Just a month before this sale, Gaming Realms singed a gaming agreement with Relax Gaming.

Higher revenue, beneficial partnerships and lower spending also allowed the brand to cut its loss before tax. It was down from £3.1m in the first half of 2018 to £2.5m in the same period this year.

“We are currently performing in line with management’s forecasts and with new commercial developments in the pipeline we are confident in meeting our full-year objectives,” added Southon.

Source:

“Licensing revenue drives growth at Gaming Realms in H1”, igamingbusiness.com, September 26, 2019.