Stride looks to future after 2018 loss narrows

Stride looks to future after 2018 loss narrows

Wednesday, November 21, 2018 Posted by News Team
Finance
Operator says early trading in new financial year is in-line with expectations

Stride Gaming has reported an 8.7% increase in net gaming revenue for the year ended August 31st, with growth from the operator’s proprietary platform helping to reduce losses for the period. 

Total revenue grew to £89.0m, with the operator saying that this was largely driven by a 23.8% increase in revenue from brands hosted on its in-house platform to £60.5m. Player deposits also grew, rising 6.8% year-on-year to £157m.

However the operator said that its adjusted EBITDA was hit by higher costs related to the implementation of a point of consumption tax on free bets in the UK. This led to a 18.2% decline in full-year EBITDA to £16.1m.

As a result of the new point of consumption tax, cost of sales rose 37.9%, with distribution costs including game royalties and marketing expenses up 41.9% at £35.8m. Administrative expenses also rose 11% to £18.0m. 

The company also saw profit negatively affected by a £7.1m fine from the UK Gambling Commission for social responsibility and anti-money laundering failings of its Daub Alderney subsidiary. This was partially offset by a £10.4m profit from the disposal of its stake in Spanish gaming operator QSB Gaming, though made a £4.4m loss from the discontinuation of its social gaming arm InfiniApps. 

The company ultimately posted a loss of £5.0m for the year, though it noted that this was down significantly from losses of £25.6m in FY 2016.

Finance expenses for the period amounted to £0.6m, with an additional £0.5m paid in tax, which ultimately saw the company report a post-tax loss of £5.0m, down significantly from losses of £25.6m in the prior year.

"We have started the new financial year in a strong cash position with net cash of £26.6 million.  We recently concluded lengthy discussions with the UKGC, not least so we can singularly concentrate on optimising the undoubted opportunities for us in the UK market, a market which, while challenging, remains the largest single regulated gaming market in the world,” chief executive Eitan Boyd said. 

He revealed that trading since the start of Stride’s current financial year had been satisfactory and in-line with expectations. 

"Looking further ahead, the board is confident in the quality, flexibility, efficiency and robustness of the group's operating model and ability to continue to grow in both relative and absolute terms despite the trading environment,” Boyd added.

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