Bragg Gaming Group has stated that its Special Committee has concluded its strategic alternatives process, with its board declining several proposals.
In its financial results for the third quarter of 2024, the company remarked that its board “unanimously determined that none of the proposals received reflect the company’s intrinsic value or current and projected financial performance, and therefore elected to conclude its review and disband the Special Committee”.
The igaming technology provider also reported a record Q3 revenue in its latest financial results, with revenue growing by over 15% compared to the same quarter the previous year.
In addition, gross profit increased by more than 15% year-over-year as well, adjusted EBITDA rose by over 5% and operating income improved, but remained at a loss.
Reflecting on the quarter and beyond, CEO Matevž Mazij stated that Bragg is “fully focused on commercialisation and unlocking profitable growth, without the need for significant new investment in product development” and that the company is “poised for an exciting, high-growth, and profitable future”.
Strategic alternatives process concluded
As previously mentioned, the Special Committee has concluded its strategic alternatives process and on its recommendation, Bragg’s board has unanimously determined to not accept any of the proposals it received during the review process.
In March earlier this year, chaired by independent board member Don Robertson, the company formed a Special Committee and began reviewing its strategic alternatives, which included selling the company or its assets, merging, financing, further acquisitions or other strategic alternatives.
In total, Bragg stated that it held discussions with more than 70 potential counterparties, executed non-disclosure agreements and shared confidential information with over 25 of them, receiving multiple non-binding proposals.
However, the company said that after careful consideration, the Special Committee and the board came to a unanimous decision and decided that “none of the proposals received reflect the Company’s intrinsic value or current and projected financial performance”.
As a result, Bragg has concluded its review and has disbanded the Special Committee.
The company added that while the process has come to an end, the board will “continue to be open and consider all opportunities for enhancing shareholder value” and that it remains “extremely confident about the Company’s business plan, operating strategy and financial prospects”.
“After a comprehensive and exhaustive process, the Committee recommended, and the Board unanimously agreed, that continuing to execute Bragg’s strategic plan as an independent public company is the best approach for maximising shareholder value,” said Robertson.
“Although the process has now concluded, Bragg’s Board will continue to be open to and consider all opportunities for enhancing shareholder value.”
Mazij added: “Over the past year, our financial performance, cashflow generation and revenue outlook have significantly improved. We remain extremely confident about our business plan, operating strategy, and financial prospects.”
Q3 revenue record
Bragg noted that its revenue in Q3 has increased by 15.9% YoY to a record €26.2m for the period (Q3 2023: €22.6m).
Gross profit during the quarter grew by 18.1% YoY to €14m (2023: €11.9m) with a margin of 53.5% (2023: 52.5%). EBITDA increased to €3.9m (2023: €1.2m).
Adjusted EBITDA rose by 7.1% YoY to €4.1m (2023: €3.8m) with a margin of 15.6% (2023: 16.9%). While operating income improved in Q3 in comparison to a €2.1m loss during the same period the previous year, it remained at a loss of €406,000.
Mazij described Q3 for Bragg as “another period of strong growth and record results”, adding that in the US, “strong third quarter revenue gains from content distribution helped drive a 40% global increase in proprietary online content revenue year-over-year”.
As of 30 September 2024, cash flow generated from operations was €8.4m (2023: €6.2m), while cash and cash equivalents were €11.6m and net working capital – excluding deferred consideration, loans payable and convertible debt – was €11.3m.
Outlook
The company also reiterated its 2024 full-year revenue guidance range of €102m to €109m and its adjusted EBITDA range of €15.2m to €18.5m, once again stating that it is “currently tracking to the lower end of guidance”.
Mazij concluded: “Since stepping in as Chairman 16 months ago and then as CEO 14 months ago, we’ve transformed our executive team, restructured commercial operations, and sharpened our sales strategy with a targeted, jurisdictional approach.
“These decisive actions position us to drive growth and capture market opportunities with greater precision and impact. Under new leadership, we’ve built a strong pipeline of tier one opportunities across key markets and key products, positioning Bragg for accelerated top and bottom-line growth.
“With the strategic review process now complete, Bragg is now fully focused on commercialisation and unlocking profitable growth, without the need for significant new investment in product development.
“Our decade-long investments in technology and talent, combined with a robust leadership team, have built a scalable platform that uniquely positions us for aggressive growth in 2025 and beyond. With significant operating leverage now within reach, we’re poised for an exciting, high-growth, and profitable future.”
