Newgioco Group primed for ‘explosive opportunity’ in Italy

Newgioco Group primed for ‘explosive opportunity’ in Italy

Tuesday, November 29, 2016 Posted by Andy McCarron
Michele Ciavarella to 'drastically improve profits in 2017'

Michele Ciavarella, chairman and CEO of Italian gambling operator Newgioco Group, has claimed his company is primed for the ‘explosive opportunity’ in the betting market.

Newgioco is coming out of a ‘two-year development phase’ after a series of acquisitions and now intends to really push for profits in order to reward its shareholders. Ciavarella also believes he has the team to take the company onwards.

He commented: “We don’t want to overlook our highly motivated and committed staff, management and directors for accomplishing such a superb commercial task on nothing less than a thin budget, limited internal resources and powerful headwinds from a sceptical and challenging financial market. Our highly-dedicated team is intensely focused on seizing on the explosive opportunity in the Italian leisure betting space to scale-up from a strong foundation and look to drastically improve profits in 2017.”

Q3 results saw the company report income before tax of $267,125 and after tax income of $36,115 with non-GAAP gaming turnover reaching $24.93 million for the three months ended 30 September 2016, an increase of 42.58% compared to the same period in 2015

Ciavarella added that the company’s addition of 110 land-based locations during the third quarter of 2016 validated its business theory by resulting in scaled up profits compared to similar betting metrics in its online vertical.

There are still challenges to overcome though as the firm’s market capitalisation suffered due to lack of liquidity in the company’s common stock, despite significant improvement in almost all business metrics.

Ciavarella commented: “Along with many firsts for our company, the third quarter of 2016 marked the completion of the first stage of our operations milestones that included the integration of the proprietary betting platform and large build-out of our land-based footprint. Earnings reported during this period indicate a key inflection point by reaching after tax profit for the very first time

“Compared to previous quarters, our stabilising enterprise-wide economics combined with levelling off corporate expenses demonstrates that our business strategy was effective and is consistent with our growth model. Aggregate pre-tax earnings from gaming operations exceeded $1 million for the first time in our history and the integrated betting platform now allows us to compete for a significant amount of market share by capitalising on the Italian licence auction and expansion into any regulated global gaming market.”

Totally Gaming says: Newgioco Group is unusual for an Italian operator in that it is listed in New York, although IGT’s recent merger with GTECH (and its Lottomatica business) means that US investors have a bit more awareness of the Italian gaming market than previously. Now is the time for Newgioco to perform though, and its governance seem more than aware that the clock is ticking.

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