Gaming Innovation Group has aligned its declining first quarter revenue to the performance of its B2C division, mainly driven by the regulation in Sweden from January of this year and the termination of a platform customer in 2018.
Seeing total group revenues tumble 13.1 per cent to €32.4m (2018: €37.3m) with EBITDA reaching €4.1m (2018: €4.3m), it is stressed that negative performance was impacted by the Swedish market, however an expectation of stabilisation being reached across the remaining months of the year was expressed.
Robin Reed, GiG CEO, commented: “The company delivered an EBITDA of €4.1m in Q1 and the key highlight was all time high revenues and EBITDA in our media business. It is a performance I am reasonably satisfied with in light of the loss of a major B2B customer which we announced in Q4-18, and the new regulation in Sweden which is impacting both our B2C and B2B revenues.
“We had anticipated this and managed the impact by careful cost control. The business is robust with cash flow from operating activities of €2.6m. This was the first time the company experienced a re-regulation of a major market and the quarter have been full of valuable insights and key learnings. These have in turn been used to evolve our strategy. We believe Sweden will stabilise over the course of the year and are looking forward to compete for market shares.”
A B2B dip to €14.2m (2018: €15.3m) compounded GiG’s B2C declining figure that reached €20.2m (2018: €25.4m), with the standout for the company being its media services division, which brought a 9.7 per cent increase in revenue, soaring to €9m from €8.2m, with EBITDA reaching €5.2m (2018: €4.4m).
Stressing the importance of regulated markets to secure long-term sustainability, Reed detailed the importance of Spanish launch occurring later in the year as a pathway into Latin America, with a further initiative to launch into high potential markets in Asia via Rizk.com.
Reed added: “Q1 was a tough quarter for the industry and for us, but we delivered in a challenging environment. Going into Q2, I believe we have navigated through the storm and are in good shape with plenty of opportunities.
“This has been accomplished through a heavy effort into compliance and a diversified revenue base, enabled by our sharp focus on proprietary products and technology, allowing the business flexibility and the options required to meet such a demanding environment.
“Returning to growth will require some investments into marketing in Q2. However, EBITDA growth should follow these investments within months thereafter.”