Gaming Realms suffers after switch in focus

first_imgAddThis Sharing ButtonsShare to LinkedInLinkedInShare to FacebookFacebookShare to TwitterTwitter Finance Gaming Realms suffers after switch in focus Games developer optimistic about licensing strategy after series of deals Email Address Subscribe to the iGaming newslettercenter_img 27th September 2018 | By contenteditor Tags: Mobile Gaming Realms saw its share price slump by more than 10% today after it announced a double-digit drop in revenue.The mobile games developer brought in £6.8m (€7.6m/$8.9m) in like-for-like ongoing business in the six months to June 30, which is down 11% year-on-year, according to a trading update issued today. Overall group revenue fell 27% to £11m, while pretax loss narrowed to £2.9m from £4.6m.Revenue dropped after the firm shifted towards a licensing model, with real-money and licensing revenue from its ongoing business rising 28% in the period. In the weeks since the period end, licensing revenue has increased 88% year-on-year, with the company buoyed by recent high-profile agreements to provide its Slingo Originals content to Golden Nugget casino in New Jersey as well as GVC and 888.The company said its improved earnings performance was primarily due to cost synergy execution and focused marketing strategy in the period. Marketing spend was 28% of revenue in the first half of 2017, but was slashed by £3.6m to £2.8m in this period.“Our strategy moving forward is to leverage our real-money gaming platform and our market leading Slingo Originals games library into the UK and international gaming markets,” said Gaming Realms CEO Patrick Southon (pictured) in a statement.“We believe that licensing our platform and content to leading brands and gaming operators will deliver high-margin revenues, and we have been very pleased with the results of our efforts over the first half of 2018.“We look forward to delivering news about more developments on our strategy during the second half of the year.”The company’s balance sheet was boosted by the sale of its affiliate marketing business to First Leads and a majority stake in its B2C brands to River UK Casino.That decision was welcomed by analysts, although investors abandoned the firm in their droves during the course of the day as its share price fell by almost 13%.Regulus Partners analysts said: “Gaming Realms’ (up to) £23m disposal of 70% its B2C brands gives it a second chance at an evolving business strategy, especially since the drip feed of £4.2m sale tranches over the next 12 months (one already received, one due post June 2019 audit) ameliorates more pressing working capital concerns.” Topics: Financelast_img read more