Swedish struggles prompt Global Gaming to cancel dividend
Nasdaq Stockholm-listed Ninja Casino operator Global Gaming has scrapped plans to issue a dividend to shareholders as a result of difficult operating conditions in the newly regulated Swedish market.
The dividend of SEK3 (£0.25/€0.29/$0.32) per share had been proposed in Global Gaming’s year-end report for 2018, in which the company revealed it had missed internal revenue and earnings targets for the final quarter of the year.
This, the operator said, was largely down to operating conditions in Sweden, with revenue impacted by strengthened consumer protection regulations, deposit limits and high levels of competition.
“The market has developed in a way and at a speed that may have been difficult to predict, and it affects all operators in the Swedish market,” the operator explained. “For Global Gaming with a majority of its revenues from Sweden, the effect becomes extra clear.”
The funds will instead be carried forward, with the Global Gaming board confident that strong liquidity will aid future growth in Sweden and other markets, allowing it to react and adapt to new operating conditions.
The Q4 slow-down has already seen Global Gaming implement a new strategy to balance revenue and costs, which is to see cost-savings identified, areas of the business streamlined, and the operator’s marketing strategy reviewed.
This, it said, was necessary to reflect the reduced contribution from the Swedish market, with efforts to be stepped up in the second quarter of the year.
Global Gaming said some improvements would be seen in the first quarter of 2019, for which it expects to post revenue of around SEK163m, and an operating loss of SEK45m.
Revenue for the quarter is down 18% year-on-year, and 31% quarter-on-quarter. The quarterly loss is blamed on increased taxation and high marketing expenses, though these are down from Q4 2018.
Despite having to put in place such measures, Global Gaming’s board of directors remains confident of the business’ long-term success in the regulated Swedish market.
Shares in Global Gaming hit a new low of SEK8.35 per share in today’s trading, and are currently trading down 2.07% at SEK8.50 per share, having fallen 73.44% in value over the past year.