Acquisitions Pay Off For Stride Gaming

Business News

Stride Gaming PLC expects results for the year just ended to be at the upper end of market expectations.

The online bingo sites operator said the strong performance of the first half of the year to the end of August had continued into the second half.

2017 has been a successful year for Stride Gaming. With exceptional underlying organic growth across our Real Money Gaming vertical, together with an excellent trading performance from 8ball and Tarco acquired in August of last year, and the launch of our new B2B vertical Stride Together, I am delighted with the current shape and future prospects of the business,” said Eitan Boyd, chief executive of Stride Gaming.

On the subject of 8ball, the company said its financial performance had been in line with expectations, achieving unaudited adjusted underlying earnings (EBITDA) of £4.18mln, as a result of which the final earn-out consideration relating to its acquisition of the company has been confirmed at £13.1mln. As previo;usly agreed, £9.06mln of this consideration will be satisfied through the issue of shares – 4.12mln in total.

In addition, the company said the final earn-out consideration payable in respect of its acquisition of the social gaming operation, InfiApps Limited, in August 2015, has been agreed at US$1,200,000, to be satisfied in cash.

We are delighted with the performance of 8ball over the period. Its integration into the wider group has begun successfully and we are already seeing synergies materialise,” Boyd said.

8ball’s performance since acquisition has clearly demonstrated our capability to acquire and integrate quality businesses, in line with the Group’s growth strategy,” he added.

One of the great strengths of Stride is our robust proprietary platform which provides great flexibility, speed to market and in-depth analysis to provide a better user experience and more profitable delivery of service. As we grow in size we are seeing the benefits of this being increasingly realised and we look forward to the future with confidence,” Boyd declared.

From August onwards, a new tax regime was imposed on all UK online bingo operators. We believe that Stride is strongly positioned to withstand these new costs given its scale and profitability (c.10% market share and 22% last reported EBITDA margin). The same cannot be said for sub-scale operators, meaning POCT2 may enable further market share growth,” finnCap said.

The broker likes the cross selling opportunities as Stride continues on its buy & build strategy.

In the first half of the financial year just ended EBITDA per player was 85% higher on Stride’s proprietary brands compared to the acquired Tarco/8Ball brands.

“As such, we see an opportunity to grow profit by introducing proprietary brands to Tarco/8Ball players,” the broker said.