Net loss shortens at Bragg after 25% revenue hike in 2021

Total revenue for the 12 months to 31 December 2021 was €58.3m (£49.0m/$64.0m), up from €46.4m in the previous financial year and in line with forecasts published last month.

Reflecting on its performance, Bragg said revenue growth was helped by a number of key events, including its acquisition of Nevada-based B2B gaming content provider Spin Games, which signalled its first foray into the US market and is due to complete in the coming months.

In June Bragg also announced its acquisition of Las Vegas-based content creation studio Wild Streak Gaming, and in August began trading its common shares on the Nasdaq Global Select Market.

Bragg in November also announced details of a strategic review, with former chief executive Richard Carter stepping down and leaving the business. The review included a restructuring of the CEO role, with chairman and former Ontario Lottery and Gaming chief Paul Godfrey becoming its new CEO.

Other highlights included its Oryx Gaming subsidiary securing a new licence to supply its content to operators in Greece, while the brand was also granted approvals in Great Britain and the Netherlands.

Shortly after the year-end, Bragg also picked up new supplier licences in the Bahamas and the Canadian province of Ontario. 

In terms of geographical performance, Malta was Bragg’s core market, with €28.1m of total revenue coming through its licence in the country. Curacao followed with €14.3m, then rest of Europe on €14.2m and rest of world on €1.6m. 

Turning to expenses and cost of revenue amounted to €29.9m, while selling, general and administrative costs were 52.6% higher at €34.8m. 

Higher spending offset revenue growth and led to an operating loss of €6.5m, though this was an improvement on the €11.9m loss posted in 2020. After excluding certain costs, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was 29.8% higher at €7.2m.

Bragg noted €184,000 in finance costs, leaving a pre-tax loss of €6.7m, compared to €13.3m in the previous year.

The business paid €826,000 in income tax, but also noted €2.6m in additional income from cumulative translation adjustment in relation to its continuing operations. As such, net loss for the year hit €4.9m, an improvement on €14.5m in 2020.

Looking at the final quarter of the year and while Bragg did not publish a full breakdown of its result, it did state that revenue for the three months to 31 December was 14.4% higher at €15.8m.

Gross profit was also 33.3% higher at €8.0m, while adjusted EBITDA jumped 22.2% from €1.3m to €1.5m.

“The 2021 fourth quarter concluded an active and productive year for Bragg as continued execution on our key strategic initiatives drove significant operational accomplishments and strong financial results,” Bragg’s chief strategy officer Yaniv Spielberg said. “Our operating momentum has continued in the early months of 2022.

“We also continue to make progress on closing our acquisition of Spin Games as Bragg has completed all of its regulatory requirements. We are now awaiting final review by the sole remaining regulatory body which is expected to be complete in the next few months.”

Looking to 2022, Spielberg said revenue is expected to be between €68m and €72m, the midpoint of which would represent an increase of 20% on 2021, while adjusted EBITDA could range between €9.5m and €10.5m, up 39% based on the midpoint.

“We believe the ongoing execution of our operating priorities favourably positions Bragg to both further accelerate this growth in 2023 and create new near- and long-term shareholder value,” Spielberg said.