Acquisitions drive revenue up at Raketech in 2020

Revenue for the 12 months through to 31 December 2020 amounted to €29.4m (£25.6m/$35.5m), up from €23.9m in the previous year.

Casino accounted for 85.1% of all revenue, compared to 68.4% in 2019, but sport’s share was down from 27.0% to 11.5%, with this area most impacted by the novel coronavirus (Covid-19) pandemic. Other activities accounted for the remaining 3.4% of revenue.

In terms of geographical performance, the share of total revenue generated in the Nordics was 80.4%, but this was down from 93.1% in 2019, whereas rest-of-world revenue share increased from 6.9% to 19.6%.

Raketech said the acquisitions it made in 2020 were a major factor in revenue growth, with all purchased assets delivering in terms of growth and anticipated industrial benefits.

These acquisitions included igaming affiliate network Lead Republik, which it purchased for an initial €1.4m in March, as well as US-facing affiliate website American Gambler in November.

“I am pleased to see that the acquisitions we made during 2020 are delivering over expectations in terms of growth and that the anticipated industrial benefits such as knowledge transfer, best practice, overhead costs reduction, central controlling, resource pools, platforms, BI systems and more, so far are being realised to a large degree,” Raketech chief executive Oskar Mühlbach said.

Looking at spending for the year, operating expenses increased 28.1% year-on-year to €22.8m, partly due to higher depreciation, amortisation and impairment costs of €5.4m related to the acquisitions.

Direct expenses also climbed to €7.9m due to increased efforts within paid media, primarily through Lead Republik and the Rapidi white label casino.

Earnings before interest, tax, deprecation and amortisation (EBITDA) reached €12.0m, up 13.6% from €12.0m, while, operating profit also edged up 8.2% to €6.6m.

When accounting for €360,000 in non-operating income and €930,000 worth of financial costs, profit before tax was €6.1m, down 17.6% year-on-year, though the 2019 figure was helped by higher non-operating income, related to party liability waived in Q1 of 2019,

Raketech paid €459,000 in tax, leaving it with a net profit of €5.6m, down 22.2% from the previous year.

“All in all, we can look back at a year in Raketech’s history where we despite Covid-19 successfully executed several operational initiatives of strategic importance,” Mühlbach said.

In terms of the fourth quarter, revenue in the final three months of the year was up 44.7% to €8.5m, primarily due to the impact of the Lead Republik purchase.

Opertaing costs were 3.3% higher at €6.2m in Q4, while was 125.0% higher at €3.6m and operating profit reached €2.3m, compared to a €100,000 loss in the same period in 2019.

Profit before tax stood at €2.3m, compared to a loss of €360,000 in the previous year, while profit after tax was €2.1m, a significant improvement on its €342,000 in 2019.

“Confident by the strong Q4 results and our general achievements during 2020, we will continue our relentless efforts to widen our geographical footprint, our product offering and our asset portfolio.

“Raketech’s sound financial situation furthermore allows us to complement our organic growth strategy with continuous and potentially accelerated efforts within the area of M&A during 2021.”