Regulatory headwinds knock Stride Gaming as it confirms takeover talks
Online gambling operator Stride Gaming reported a 13% decrease in real money net gaming revenue in its interim results on Friday, to £39.03m, due to what it described as “regulatory headwinds” across the UK online gaming market.
The AIM-traded firm also reported a 23.0% decrease in adjusted EBITDA for the six months ended 28 February, to £6.16m, and a 29.3% fall in adjusted net earnings to £5.23m.
It said its proprietary platform revenue decreased by 9% to £27m, and its non-proprietary platform revenue fell 24% to £11.5m, which the board said reflected its strategy to shift players onto the higher margin, in-house platform.
The group said it had retained a “solid” balance sheet, with net cash of £21.9m, down from £28.7m at the start of the period.
Post-period end, the company received contingent consideration of £5.67m following the disposal of the available-for-sale investment in QSB Gaming.
On the operational front, the board said its “proactive” strategy to shift towards “casual games" players resulted in an 8% decrease in deposits to £73m, but a 4% improvement in yield per player to £147.
Funded players were down 23% to 118,000, and group gross gaming revenue through mobile and touch devices increased by 6%, and now represents 72% of the company’s total real money gaming gross gaming revenue.
Stride Together, the firm’s business-to-business offering, had seen “significant” traction during the year, and reportedly performed ahead of management's initial expectations.
It added that its ‘Rummy Passion’ business continued to perform in line with the board's expectations, with further investment in the team, marketing and technology.
In February, the board of Stride had announced that it was embarking on a strategic review of the business to “thoroughly explore” all options available to it in order to maximise value for shareholders.
In light of those advanced discussions, the directors said they had resolved that no interim dividend for the six month period would be declared and paid until those talks were resolved.
“The group has delivered a resilient performance in the first half of the year despite challenging trading conditions, reflecting the strength of our proprietary technology, as well as the skill and commitment of our team,” said Stride Gaming chief executive officer Eitan Boyd.