GiG Q1 revenues drop 13% amid Swedish regulatory woes
Operator reports Q1 2019 decreases in all key verticals
Gaming Innovation Group (GiG) reported a 13% year-on-year drop in its Q1 2019 revenues, which fell to €32.4m (£27.7m), citing the impact of Swedish regulation on its revenues.
Company EBITDA also fell by 4.6% y-o-y, decreasing to €4.1m in Q1 2019, with GiG operating with an increased EBITDA margin of 12.7% during the quarter.
Decreases were reported in GiG’s B2B and B2C businesses, with B2B Q1 2019 revenues falling by 7% to €14.2m and B2C revenues dropping by 20.4% to €20.2m in the same period.
Speaking about the decrease in company revenues, GiG CEO Robin Reed said that GiG had anticipated this and had “managed the impact by careful cost control”. Reed asserted GiG’s robustness, highlighting the company’s €2.6m in cash flow from operating activities.
However, revenues from the company’s media services business increased by 10% during Q1, increasing to €9m. In addition, quarter-on-quarter operating expenses decreased by 4% during Q1, due to what GiG cited as “increased efficiencies and cost-savings across the organisation”.
GiG shares were listed on Nasdaq Stockholm for the first time on 26 March, as part of a dual-listing with Oslo Børs. Its US sportsbook agreement with Hard Rock International, first agreed in October, also went live during the quarter.
Addressing the company’s issues resulting from Swedish regulation, Reed said the company had gleaned “valuable insights and key learnings” which it has used to evolve its strategy.
“We believe Sweden will stabilise over the course of the year and are looking forward to competing for market share,” Reed added.
Highlighting the importance of regulated markets in securing long-term sustainability for the business, Reed confirmed that GiG will launch operations in Spain during the third quarter of 2019, commencing a marketing push during Q4 2019.