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Enlabs posts increased revenue for H1 2019

| By Daniel O'Boyle
Enlabs revenues totalled €18.4m (£17.0m/$20.6m) for the first half of 2019, up 30.5% from €14.1m last year, while adjusted profit for the period increased 51.5%, from €3.1m to €4.7m.

Enlabs revenues totalled €18.4m (£17.0m/$20.6m) for the first half of 2019, up 30.5% from €14.1m last year, while adjusted profit for the period increased 51.5%, from €3.1m to €4.7m.

The improvement was driven by a 39.7% increase in gaming revenue, from €12.7m to €16.9m. Enlabs chief executive and group president Robert Andersson said the launch of new Poker and Live Casino games helped drive this growth.

“Significantly, we delivered the new betting product in Lithuania, Poker from GG Network and Live Casino from Evolution Gaming in Estonia – on top of many minor launches and updates,” Andersson said. “The former were key launches for Enlabs and demonstrate our organizational strength and adaptability to execute business development.”

Media and solutions revenues both declined, by 28.4% to €978,000 and by 14.4% to €567,000 respectively. However, Andersson said the decline in media revenues was not a concern, and in fact the sector is well-positioned for the future.

“Though media revenue decreased year-over-year, the media business area has seen significant changes over the last year,” Andersson said. “The longer-term trend was steeply declining positive cash flow due to limited investment. But with the Q1 changes, we managed to stop the decline and turn operations around to take a very promising position.

“The business area is now showing increases in underlying KPIs again. For example, media had a 268% increase in NDC count, which is a clear indicator that we are on the right track and that our Q1 investment has started to bring results. In line with growth in NDC, media showed 17% quarter-on-quarter revenue growth and a positive EBITDA

“Our solutions vertical performed as expected with stable operations and no material changes from the previous quarter.”

Direct operating costs also increased by 30.2% to €3.2m, while gaming taxes paid rose 45.5% to €1.8m, bringing total direct operating costs to €5m, up from €3.7m last year. Andersson noted that the high gaming tax expense showed that the company was operating in a sustainable way by focusing on regulated markets, with Latvia being the company’s largest market, followed by Estonia.

“It feels reassuring that we have 94% sustainable revenue from regulated markets where gaming tax is a natural part of the business,” Andersson said.

Staff costs remained Enlabs’ largest expense, at €4.4m, up 8% from last year, while marketing costs 53.8% to €2.9m.

For Q2 of 2019, gaming revenue increased by 43.7% year-on-year to €8.6m, while total revenue increased from €7m last year to €9.4m, exceeding the record revenue set last quarter. Adjusted profit for the period increased from €1.5m to €2.4m.

“Again, we can boast having our best quarter yet,” Andersson said. “I am very pleased with our results in Q2 considering the period is historically the weakest of the year. Our Gaming vertical continues to deliver strong results with all KPI’s hitting all-time highs for the period, Media has started to turn around, all while we achieved significant product development milestones.

“To summarise the quarter, we maintained our momentum from Q1 and improved on it. I feel good being able to continue proving to our shareholders they can count on Enlabs for steady profitable growth, with no drama.”

Andersson also said he anticipates a strong Q3 for the company after impressive July figures and high August expectations.

“Considering the absence of major sport events, which often boost activity, July turned out very good for us. From August onward we are entering what we consider the peak season in our business.”

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