Per Norman (pictured), the chief executive of MRG, has hailed the impact of a marketing push in the first half of 2018 after the company, which operates the Mr Green brand, revealed bumper revenue growth figures.
In a trading update, MRG said that revenue growth had accelerated in the second quarter to 43.4%, giving the company a 40.8% increase so far this year to SEK793.8m (£68.4m/€76.7m/$89.8m) after impressive organic growth of 31.1% from April to June inclusive.
Profits did take a hit due to marketing expenditure increasing by more than 70% year-on-year in the first half of 2018, with earnings before interest and deductions over the six months falling from SEK52.4m to SEK45.4m.
However, in an earnings call, Norman explained how the marketing expenditure has represented a sound investment.
“Higher marketing spend has affected EBITDA and there has been a strong focus on digital marketing, but we are very happy with the strong growth,” Norman said.
“We increased marketing spend for two reasons and these actions have been successful. The first reason was because of the strong market efficiency we were seeing, and the second was of course due to the [Fifa] World Cup.
“We will focus more on cost control in the second half of the year, with marketing spend decreasing in relation to total revenue.”
On the “market efficiency”, Norman outlined how customer deposits had rocketed by 64.3% in the last quarter through to the end of June and added that he is “very happy with the quality” of the new customers.
“We are measuring it very closely,” he said. “When we measured market efficiency in Q2, it was very high despite the increase in marketing spend, and we have also seen that in the deposit figures.”
The MRG chief executive also said that the first few days in July had considerably surpassed the company’s target of 40% growth in 2018 – but he refused to put a figure on the increase so far this month, adding a note of caution that the closing stages of the World Cup may have added a temporary gloss.
“We have had another strong quarter,” Norman added. “We are confident we are very well prepared to deliver on our financial targets, short and long term.”
In addition to targeting turnover growth of at least 40% this year, MRG is aiming for 25% growth in 2020.
Geographically, MRG has experienced particularly positive organic growth in the Nordics, Norman said. He also said that Italy – where draconian new laws on gambling advertising and promotions were introduced last week – represents a relatively small market for the company.
Mr Green rebranded as MRG in May after completing a deal to acquire Latvian operator 11.lv, securing an entrance into the Baltic market.