Bragg considers potential sale as strategic committee formed

Chaired by independent board member Don Robertson, the committee will now consider all strategic alternatives. This could include the sale of the group or its assets, as well as a merger, financing and further acquisitions, or other strategic alternatives. 

Bragg said there is no timetable to complete the strategic review, nor have any decisions been made. It added that there can be no assurances any transaction will be completed.

The group said it will provide further updates in due course, with its management remaining committed to executing its strategy and business plan in the meantime.

Revenue growth in 2023

The announcement comes alongside Bragg publishing its results for the 12 months to 31 December 2023. Revenue in this period hit €93.5m, some 10.4% ahead of the previous year, with Bragg hailing the impact of new partnerships and market launches.

Bragg struck content deals with several major operators such as Betsson, 888/William Hill and PokerStars. The group also entered new markets through partnerships, including Mexico with Caliente and Italy with Microgame.

Alongside this, Bragg said it continued to grow its presence in existing markets with multiple new titles. The group highlighted the US, UK, Spain and Switzerland as particular areas of growth during 2023.

On this, CEO Matevž Mazij, who joined last August, praised the impact of Bragg’s ongoing strategic efforts. This, he said, focuses on being a content-focused igaming B2B provider and “meticulous” control over expenses.

“By continuously expanding our portfolio of higher-margin proprietary and exclusive third-party games to a wider range of new partners at an accelerated pace, we are well positioned for long-term growth in top-line revenue, gross profit and adjusted EBITDA, along with improved operating margins,” Mazij said.

Netherlands key for Bragg despite new challenges 

Breaking down the annual figures, it is clear that the Netherlands is Bragg’s core market by some distance. Revenue in 2023 amounted to €33.6m, down 8.9% from €36.9m in the previous year.

Bragg said it maintains its “dominant” position in the country with five customers for its player account management (PAM) systems. However, there was some reason for concern, reflected in the revenue decline.

Since July 2023, Bragg says challenges have arisen due to increased competition and new regulations. It also struck a new deal with Entain-owned BetCity in Q4, but this required renegotiating certain terms.

Elsewhere, Bragg said it continues to report growth in the Czech market and is exploring new opportunities for expanding with its PAM platform, content aggregation, player engagement tools and managed services in other international jurisdictions. Czech is reported as part of the Other segment, with revenue here up 27.3% to €8.4m.

Also in Europe, Malta revenue increased 22.6% to €17.9m, while revenue in Croatia was up 43.3% to €4.3m, Belgium 340.6% to €3.7m and Serbia 12.5% to €1.8m. 

What’s happening outside Europe?

On the international stage, Bragg also reported some level of growth. Curaçao is behind the Netherlands as Bragg’s second core market, with revenue rising 11.6% to €19.2m for 2023.

In the US, revenue also increased by 17.5% from €4.0m to €4.7m. Again, Bragg said this was helped by launching with new partners, growing its overall presence in the process. 

“The global distribution of our proprietary and exclusive third-party content is rapidly expanding, particularly among an increasing number of tier-one operators,” Mazij said. “We anticipate a further surge in the global adoption of these games in 2024. 

“Last year, we successfully launched a total of 29 new proprietary online titles worldwide, including 26 proprietary titles newly introduced to the European online casino markets and 15 proprietary titles newly introduced to the North American online casino markets. We expect to maintain or exceed this pace of game releases this year.”

Increased costs lead to $5.0m net loss

However, turning to expenses, spending was higher almost across the board. Cost of revenue was the main outgoing at €43.6m, up 9.8% year-on-year.

Other expenses of note include €50.8m in selling, general and administrative costs, a rise of 8.6%. This resulted in an operating loss of €777,000, which was an improvement on the €828,000 loss in the previous year.

However, interest and other finance charges totalled €2.1m, leaving a pre-tax loss of €2.9m, compared to €1.9m in 2022.

Bragg paid €910,000 in income tax and also noted €1.2m in negative cumulative translation adjustment. As such, net loss for the year reached €5.0m, wider than the previous year’s €1.9m loss, with higher costs offsetting revenue growth.

There was, however, some good news in terms of adjusted EBITDA, with this increasing by 25.6% to €15.2m.

Revenue dips in Q4

Bragg’s full-year results were not helped by a decline in revenue during the final quarter of the year. For Q4, revenue slipped 1.3% to €23.4m.

The group did not disclose full results for the quarter. However, it did reveal an operating loss of €431,000, compared to a €162,000 profit in 2022. Adjusted EBITDA also declined 23.7% to €2.8m.

Bragg did note that revenue and adjusted EBITDA were both higher than in Q3, while its operating loss was lower.

Bragg looking to the future

Looking to 2024, Bragg expects to report growth across revenue and adjusted EBITDA. For revenue, this is set to be between €102.0m and €109.0m, meaning a rise of 9.1% to 16.6%, with the midpoint being 12.8% higher.

In terms of adjusted EBITDA, Bragg said this will likely amount to between €15.2m and €18.5m. This would translate to an increase of up to 21.7%, while the midpoint of the range would suggest a 10.9% increase.

“Our strategic actions have positioned Bragg as an essential content source for leading international igaming operators, strengthening our groundwork for consistent and profitable development,” Mazij said.

“With confidence, we affirm our readiness with the appropriate strategies, financial strength and infrastructure to maintain our business momentum while executing initiatives that foster cash flow growth and generate added value for our shareholders.”