Warning! Cherry revises revenue target after ComeOn purchase

Warning! Cherry revises revenue target after ComeOn purchase

Monday, November 6, 2017 Posted by Luke Massey
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The Stockholm listed group confirmed the ComeOn purchase in H1 2017

A tougher than expected integration of acquired ComeOn online gambling assets has seen Stockholm-listed Cherry AB issue an end-of-year profit warning.

Issuing a market update ahead of this Wednesday’s Q3 trading statement, Cherry revised its full-year revenues to MSEK 2,200 (£196 million) from MSEK 2,500 (£224 million).

Further readjustments see the European online gambling group lower its full-year 2017 corporate EBITDA to MSEK 400 (£35.7m) from its previous target of MSEK 480 (£43 million).

Updating investors, Cherry leadership detailed that it had encountered difficulties in completing its group integration of ComeOn gaming assets, a company it had acquired in H1 2017 for a total valuation of €280 million, its biggest acquisition to date.

Anders Holmgren, CEO of Cherry AB, commented on the corporate update: “Naturally, I am disappointed that ComeOn! has not developed as well as we previously assessed.

“In the online gaming business area, the integration process has not been implemented efficiently because of the previous management’s poor focus on business. Thus, a new management team was appointed, consisting of people with the experience, market insight and control required.”

Totally Gaming says: Undertaking a strategic review of ComeOn assets, Holmgren has moved to install a new management team focusing on optimising ComeOn’s earning potential. This leadership restructure has seen the departure of Jonas Wåhlander, MD of ComeOn Malta, while the company has announced that it will now integrate all B2C assets under the ComeOn business division.

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