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Gaming Realms returns to net profit in 2021 as revenue jumps 29%

| By Robert Fletcher
Content developer Gaming Realms was able to return to a net profit during its 2021 financial year after growth within its licensing segment drove revenue up 29.0% year-on-year.
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Revenue for the 12 months to 31 December 2021 amounted to £14.7m (€17.5m/$18.7m), up from £11.4m in the previous financial year.

Revenue from the licensing segment increased 48.0% year-on-year to £11.1m, with content licensing revenue rising 35.8% to £9.1m and brand licensing revenue rocketing 122.2% to £2.0m.

Gaming Realms said growth in the content licensing business remains the key focus of the group, adding that its performance in FY21 reflected the successful implementation of its strategy of growing its games portfolio and increasing the distribution footprint to more operators in Europe and the US.

During 2021, Gaming Realms began operating with partners in five new regulated markets including Italy, Romania, the Netherlands and Michigan and Pennsylvania in the US. Shortly after the year-end, the developer also secured a licence in the Canadian province of Ontario and started trading in April 2022, while it launched in Spain in January 2022.

Outside of going live with partners in these markets, Gaming Realms went live with a further 18 partners in existing markets in Europe and New Jersey during 2021 and added a further 10 to date in 2022 in these jurisdictions.

However, despite growth in the licensing segment, social publishing revenue declined 7.7% to £3.6m for the full year.

This, the developer said, was largely as a result of currency headwinds experienced during 2021, with the majority of the transactions in the segment denominated in US dollars. At constant currency, revenue would have only decreased by 1.0%.

Other points of note from 2021 included Gaming Realms commencing trading its ordinary shares over-the-counter on the OTCQX Best Market in the US. Trading began in April last year after the developer upgraded from the Pink market, with its shares now running under the ticker “PSDMF” on the OTCQX.

Turning to costs and while operating expenses remained level at £2.2m, administrative costs were 6.7% higher at £6.4m and marketing spending also climbed 6.7% to £379,230. Share option and related charges jumped 87.8% to £699,194, though the developer did not note any impairment charges for the year, whereas in 2020 this amounted to £499,422.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was 150.0% higher at £5.0m, though Gaming Realms did not report a number of other costs for the year.

Amortisation of intangible assets amounted to £3.1m, depreciation of property, plant and equipment totalled £216,834, while impairment of goodwill was £73,677. Finance expense of £689,935 was only marginally offset by £26,496 in finance income.

However, despite these costs, Gaming Realms was left with a pre-tax profit of £957,716, compared to a £1.6m loss in 2020. 

The developer received £296,436 in tax credit and after also accounting for £39,153 in exchange gain arising on the translation of foreign operators, this resulted in a net profit of £1.3m, in contrast to a £1.8m net loss in the previous financial year.

“2021 was another exceptional year for the group as we expanded our Slingo portfolio and entered new regulated igaming markets, increasing revenue by 29% and producing a maiden profit for the financial year of £1.3m,” Gaming Realms executive chairman Michael Buckley said. “Our core licensing business continued to go from strength to strength as we secured 35 new licensing and distribution partners throughout the year that supported a 48% growth in the number of unique players enjoying our content globally. 

“The group’s commitment to increasing our global presence during the period has provided us with a strong foundation on which to deliver further growth in 2022 as we remain focused on expanding our foothold in these territories. 

“Momentum has certainly continued into the year so far, having already released four new games and launched in both Spain and Canada. With additional planned launches in new markets and with new partners in the pipeline, we look forward to providing further updates in due course.”

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