Gaming Realms results boosted by US and Italian growth

| By Richard Mulligan
Gaming Realms is targeting entry into new European and US markets in the second half of 2021 after seeing a 50% rise in revenue and triple-digit earnings growth during the first six months.

In its interim results for the six months to the end of June, the developer and licensor of mobile-focused gaming content saw total revenue of £7.7m ($10.6m/€9.0m), of which £5.8m came from licensing, which was up 73% year-on-year.

This included content licensing revenue growing 39% to £4.1m due to an increase in distribution from an expanded games portfolio. An enhanced brand licensing portfolio led to a 298% increase within that segment to £1.7m.

The overall £2.4m increase in licensing revenues compared to the prior period was achieved through a mixture of a £0.5m organic increase in content licence revenues from existing partners, a £600,000 increase in content licence revenues from partners that went live after June 30, 2020, and a £1.3m increase in brand licence revenue compared to the previous period.

Social revenue increased 7.0% to £1.9m from an increase in new Slingo content, as well as what it described as improved player management tools and new player engagement features.

Some £3.1m of total revenue came from its US operations, with £2.5m registered in the Isle of Man, £1.7m from its international business and £382,000 from the UK.

During a busy period for the business, Gaming Realms was granted provisional igaming supplier licence in Michigan and went live with BetMGM through a direct integration agreement. It was also granted an interactive gaming manufacture licence in Pennsylvania.

In the period it also launched Slingo content in the Italian regulated market with Goldbet and Sisal, signed several distribution deals including with GAN, and signed a content licensing agreement with IGT.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was £2.7m, which was up 116% compared to the same period in 2020. It posted a profit of £800,000, compared to a loss of £700,000 during H1 last year.

Total business expenses excluding share option and related charges increased 19%. Marketing expenses more than doubled to £207,428 as it pursued social growth in the US, with operating and administrative expenses up slightly to £1.19m and £3.26m respectively.

Commenting on the first half performance, Michael Buckley, executive chairman, said: “The group has delivered an excellent first half both in terms of significant earnings growth and new licensing and distribution agreements.

“Having recently launched in Michigan and Pennsylvania, the group is now working to capitalise on the significant opportunities in these markets. We are also looking to strengthen our position in Europe through launches in other regulated markets following the encouraging response we have seen from players in Italy for our Slingo content.

“Looking further ahead, we are about to start the process for obtaining a licence in Ontario, Canada.  Ontario has announced its intention to regulate iGaming and has the potential to be a bigger market for Gaming Realms than any one of the US states that have regulated so far. In addition, we will also pursue further licensing opportunities within the US as new states announce their intention to regulate igaming.

“This is an exciting time for the company and we intend to continue to deliver further value by scaling our platform and bringing innovative content to new audiences worldwide. With more material impact expected from Michigan and Pennsylvania in the second half of this year, the board is confident in the future performance of the business.”

Gaming Realms started trading its ordinary shares over-the-counter on the OTCQX Best Market in the US in April 2021. Gaming Realms’ ordinary shares continue to trade on the London Stock Exchange’s AIM market.

Gaming Realms reported a 65.2% year-on-year increase in revenue for its 2020 financial year, while it was also able to significantly reduce its overall loss. Total revenue from continuing operations in the 12 months to 31 December amounted to £11.4m (€13.1m/$15.8m), up from £6.9m in the previous year.

Despite higher costs, adjusted EBITDA in 2020 was up from a loss of £355,116 in 2019 to a positive of £2.9m.

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