Home > Finance > Full year results > Oryx earn-out payments lead to wider losses at Bragg in 2020

Oryx earn-out payments lead to wider losses at Bragg in 2020

| By Robert Fletcher
iGaming software provider Bragg Gaming Group said despite a 74.4% increase in revenue during its 2020 financial year, earn-outs related to its 2018 acquisition of Oryx Gaming led to an increased net comprehensive loss.

Total revenue for the 12 months through to 31 December amounted to €46.4m (£40.0m/$54.8m), up from €26.6m in the previous year.

Bragg put this down to organic within its existing customer base, as well as the onboarding of new strategic customers in jurisdictions around the world. Some 89% of revenue was derived from games and content services.

The provider also noted the impact of new investment, which resulted in the full launch of the Oryx Hub, a new data analytics platform and customer engagement platform.

Players wagered a total of €11.8bn in 2020, up 73.5% during the previous year, while the number of unique users playing Bragg’s games and content rocketed by 113.6% to 5.9 million.

Bragg’s Malta operations accounted for €31.4m of all revenue, more than double the €14.8m generated in 2019. Revenue from its Curacao operations amounted to €8.8m, while Croatia revenue reached €1.6m. All remaining revenue was split between Germany, Romania, Serbia and other markets.

“We’re particularly pleased with the overall performance of Bragg during 2020 and believe we have built strong foundations to support future market share gains and new market entry,” said Bragg chairman Richard Carter, who was yesterday (24 March) confirmed as the provider’s new chief executive.

Carter will replace founder Adam Arviv, who had been serving as interim CEO since September last year.

“Adam and I have taken active leadership roles within Bragg to ensure the future success of the company,” Carter, “We’re aligned in our strategy to grow the group’s underling operating profit margin and to expand rapidly into new markets, particularly the burgeoning US market.”

Cost of revenue for the year amounted to €26.2m, up 79.5% year-on-year, which left a gross profit of €20.2m, an increase of 68.3% from €12.0m in 2019.

Adjusted earnings before interest, tax, deprecation and amortisation (EBITDA) was also up 450.0% year to €5.5m, with Bragg noting improved profitability across its business.

However, selling, general and administrative expenses were also up by 54.6% to €22.8m, while Bragg also accounted for €9.3m related to pay-out settlements for its acquisition of Oryx Gaming. Details of the final €22.0m all-share payment were published in November.

As a result, operating loss for the year widened from €8.1m to €11.9m, and after also including €1.4m in interest and other financial charges, loss before tax was €13.3m, compared to €9.8m in 2019.

Bragg paid €1.2m in tax, leaving a net loss from continuing operators of €14.5m. When also including a €90,000 loss from discontinued operations, as well as translation adjustment, net comprehensive loss for the full year was €14.5m, compared to €12.1m in the previous 12 months.

The provider also published certain results for its fourth quarter, during which it experienced a record performance, with revenue climbing by 75.7% to €13.8m. Players spent a total of €3.2bn on Bragg games and content, up 50.1% year-on-year.

Adjusted EBITDA was up 70.8% to €1.3m, while net loss for the period remained level at €5.3m.

“Our extensive experience and wide-ranging industry networks within this constantly expanding market will add significant value for Bragg shareholders,” Carter said. “We are now extremely well-positioned to capitalise on the strong growth in the online gaming sector globally.”

Interim CEO Arviv added: “We’ve made extraordinary progress in 2020 and are very pleased with the substantial revenue and EBITDA growth that we’ve delivered.

“We continue to expand globally, enhancing our content portfolio and technology offering, and securing new customers across key geographies.”

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