Updates
Cherry Interim Report January–June 2018
16-Aug-2018: Continued expansion and innovative investments
SECOND QUARTER
• Group revenue increased by 41 percent to MSEK 753 (536), with organic revenue growth amounting to 39 percent (37).
• Profitability improved, and EBITDA increased by 78 percent to MSEK 165 (93) and the EBITDA margin was 22 percent (17).
• Profit for the period amounted to MSEK 91 (15).
• Earnings per share before and after dilution amounted to SEK 0.77 (0.03) and SEK 0.76 (0.03) respectively.
• The Board of Directors appointed Gunnar Lind as Acting CEO.
• Cherry has completed the acquisition of 44 percent of the shares in the affiliate company, Game Lounge, with Cherry now holding 95 percent of shares outstanding. The purchase consideration amounted to MEUR 9.8 and 1,554,017 newly issued shares in Cherry AB.
• A further 7.5 percent of the shares in the online gaming company Almor Holding were acquired, with Cherry now holding 90 percent of the shares outstanding. The purchase consideration amounted to MEUR 2.2 and 299,504 newly issued shares in Cherry AB.
SIX MONTHS
• Group revenue increased by 33 percent to MSEK 1,434 (1,077), with organic revenue growth amounting to 32 percent (40).
• Profitability improved, and EBITDA increased by 103 percent to MSEK 357 (176) and the EBITDA margin was 25 percent (16).
• Profit for the period amounted to MSEK 180 (51).
• Following new share issues, the number of shares has increased to 4,988,000 Class A shares and 100,680,026 Class B shares, as of 30 June 2018, totalling 105,668,026 shares.
• Earnings per share before and after dilution amounted to SEK 1.56 (0.27) and SEK 1.55 (0.26) respectively.
EVENTS AFTER THE END OF THE PERIOD
• On 3 July, Cherry was granted a sports betting license in Poland.
• On 7 August Cherry exercised its option to acquire an additional 7.8 percent of the shares in the gaming specialist Highlight Games. Cherry also acquired shares corresponding to 15.1 percent in the company and now holds of 60.4 percent of the shares outstanding in Highlight Games.
• On 9 August Game Lounge acquired two premium domains in North America, BetNJ.com for sports betting and casino in New Jersey, and the Mexican domain OnlineCasino.mx.
Comments by the CEO
“Strong and broad operations”
With a revenue increase of 41 percent, of which organic growth amounted to 39 percent, the quarter was characterized by expansion and investment. Investments during the quarter were made primarily in the marketing of existing and new brands, and of games developed in-house by Yggdrasil and Highlight Games. Cherry has strong and broad operations meeting the market’s demand for quality in everything we deliver, and it is gratifying to note that July demonstrated that our investments have generated returns in line with our expectations.
The second quarter of 2018 was characterized by a focus on growth, in the short term as well as long term. Investments in marketing were significant and effective. Online Gaming is expanding and strengthening its position in key markets, while the business area’s new brands are also rapidly building awareness and establishing a good customer base. Game Development and Online Marketing have also acted proactively through increased investment in game development, acquisitions and a clearer presence in Sweden. To me, as acting CEO, this is a secure situation providing opportunities to continue strengthening Cherry in its core markets and, in parallel, to assess complementary growth alternatives.
Over the quarter, the Group’s revenues increased from MSEK 536 to MSEK 753 and EBITDA increased by 78 percent, from MSEK 93 to MSEK 165. The foremost individual explanation for this trend is continued favourable development within the Online Gaming business area. The gaming operator holds a strong market position and has launched new brands meeting the market’s wishes. Beyond this, company management, now with permanent CEO Lahcene Merzoug at the helm, is continuing to optimize the cost base. Cherry’s subsidiary Almor, including the German brands Sunmaker and Sunnyplayer Casino, experienced one of its strongest quarters, thereby strengthening Cherry’s market position in the regulated Schleswig-Holstein market (Germany).
Game developer Yggdrasil had an active quarter that included the launch of five new games, including “Sonya Blackjack”, the first game in the new “Table Games” product vertical. During the quarter, Yggdrasil signed distribution agreements with 13 operators. The number of employees (FTE) of Yggdrasil at the end of the period was 243 (134). Following the end of the period, a global distribution agreement was reached with 888 Holdings, one of the world’s most popular gaming operators. An agreement was also reached with Intralot, which has a strong position in Italy, complementing Yggdrasil’s existing collaboration with Lottomatica. In April, Northern Lights became the first independent game studio to use Yggdrasil’s partner program, YGS Masters, and we make the assessment that this will be an excellent way to collaborate with companies in early phases of development. Following the end of the quarter, Yggdrasil was also certified for the fast-growing Spanish market – an important milestone in Yggdrasil’s strategy to grow in regulated markets.
At the beginning of the year, Highlight Games launched its virtual soccer game, SOCCERBET, in selected African markets, while the company also prepared for its introduction in Italy. During the third quarter, Highlight Games, alongside Eurobet and other leading Italian operators, will launch the game in Italy, where the virtual gaming market is expected to generate sales of some EUR 2 billion in 2018, as assessed by the independent data specialist H2 Gambling Capital. Highlight Games has favourable prospects of capturing significant market share, thus Cherry has acquired additional shares in the company and Cherry’s holdings in August totalled 60.4 percent and, accordingly, consolidated as a subsidiary effective from August 2018.
The Group’s affiliate company, Game Lounge, is developing according to plan. The company has established a new office in Stockholm and has a total of 60 employees. During the quarter, Game Lounge acquired assets, including some 1,500 websites, various search engine optimization (SEO) tools and services, and a team of ten employees with unique SEO expertise to aid the expansion of the company into new verticals. In August, Game Lounge acquired two premium domains in North America, which will be important bridgeheads in New Jersey and Mexico.
In June, we were able to complete the acquisitions of additional shares in subsidiaries Game Lounge and Almor Holding. The payment for the additional 44 percent and 7.5 percent respectively consisted in part of new shares in Cherry AB, now bringing the total number of shares in the company to 105,668,026. Both companies are experiencing a positive development trend, and with Cherry’s support, we perceive good opportunities for them to develop at a higher pace and with a broader offering.
During the quarter, the Board took the decision to terminate Anders Holmgren’s employment as the President and CEO of Cherry. At the same time, the Board resolved to appoint the undersigned as CEO until a permanent CEO has been appointed. With my previous experience as CEO of Cherry and as a Board member in the company, I was able to get started relatively quickly.
The recruitment of a permanent President and CEO has been initiated and includes both internal and external candidates. I am sure the Board of Directors is doing a thorough job and, as its work progresses, I am focusing on developing the Group in accordance with the established strategy, supported well by all employees.
Gunnar Lind
Acting President and CEO
MARKET OUTLOOK
The gaming market is currently growing strongly and Cherry estimates that demand in the Group’s largest geographic markets will continue to develop favourably. The Group continuously studies conditions for new business within the related business areas and geographic markets in and outside Europe.
The Group’s focus is on generating shareholder value by being an active participant in the development of new and existing companies in the gaming, media and entertainment sector. The objective is for the companies to become market leaders in their respective areas by building their core values of entrepreneurship, responsibility and commitment. These are important prerequisites for the Group to be able to achieve its financial targets and to continue its successful profitable growth, through both organic growth and acquisitions, in existing and new verticals and geographic markets.
PRESENTATION OF THE INTERIM REPORT
The company’s Executive Chairman, Morten Klein, Acting President and CEO, Gunnar Lind, and CFO Christine Rankin, will present and comment on the report at a telephone conference at 10:00 a.m. CET on 16 August 2018. The presentation materials will be available approximately one hour earlier at www.cherry.se. The presentation can be followed via www.cherry.se and/or www.financialhearings.com. To participate by phone, call +46 8-566 426 97 (SE) or +44 203 008 9807 (UK).
For further information, please contact:
Christine Rankin, CFO, Telephone: +46 76 539 94 92, [email protected]
Anders Antonsson, IR & Communications, Telephone: +46 709 994 970, [email protected]
CHERRY IN BRIEF:
Cherry is an innovative and fast-growing gaming company with operations in gaming, entertainment and media. The company was founded in 1963 and today, Cherry operates through five diversified business areas: Online Gaming, Game Development, Online Marketing, Gaming Technology and Restaurant Casino. The objective is to grow organically in combination with strategic acquisitions of fast-growing companies. Cherry employs some 1,400 people and has about 9,250 shareholders. The company’s class B-share has been listed on the Nasdaq Stockholm exchange, Mid Cap segment since 18 October 2017.
Source: Gambling Industry Press Releases
Everything comes back around in popularity or at least that is what they say. It has happened with vinyl records and now the same is occurring with retro video games. Yes, classic video games have become popular as children of the 1980s and 1990s have grown older and moved into the workforce. But classic games haven’t just become popular to play. People are spending large sums of money on classic games from 20 and 30 years ago and owners who sell the games are making tidy sums. Gamers looking for classic games online can find free casino slot games inspired by retro video games.
Why are classic games popular again?
Classic video games are becoming popular as many older gamers look for a nostalgia factor. Playing games from their childhood brings back memories of yesteryear. Old Nintendo games are a link to the past for many gamers and it is something they don’t want to lose. Nintendo announced in August that it would release a back catalogue of classic games for a new platform. The move will capitalise on the growing number of people looking for older games rather than newer ones. Many older games have inspired online slots which has driven their popularity sky-high.
In addition to personal reasons, today’s mega-blockbuster video games are seen as too violent by many. While video games of the past were an escape from reality, modern games are based – at least loosely – on the problems of the world. From first person shooters to Grand Theft Auto, many older gamers want to play games that don’t reflect reality.
How much are rare video games worth?
A recent study of rare and nostalgic video games from the last 30 years has found a number of old games selling for large sums of money. According to one source, a copy of Nintendo’s Campus Challenge 1991 sells for around $22,000. Amazingly, the now rare game cost just $30 back in 1991. Gamers who had a copy could cash-in on Campus Challenge if they are able to find it. Other rare games selling for big money include the 1988 Sega Megadrive edition of Tetris and Atari’s Air Raid from 1982.
Ultimate 11 is another that is high on the rare games list. According to reports, only 10 copies exist and each goes for $10,000. Kizuna Encounter had only 15 English versions created and is reportedly worth $13,000. One video game collector paid $55,000 for a copy of both games in 2009.
…And then there’s E.T.
In 1982, Atari rushed E.T. the Extra-Terrestrial video game into the marketplace. Atari gave E.T.’s creator just five and a half weeks to develop the game. The company wanted it out in time for Christmas and to reap the rewards of the holiday season. The rushed game was awful and gamers hated it. It barely sold and Atari had warehouses chocked full of E.T. games it couldn’t sell. Unable to move the games and with Atari becoming obsolete by the mid-1980s, the company buried hundreds of thousands of copies of E.T. and other games in the New Mexico desert. Some have been dug up and rare copies of the game have sold for $1,535 at auction. The excavators of the long-lost cartridges found 900 E.T. games in total. After selling them on eBay, the group made $108,000.
Keen to use the technical know-how of SoftSwiss, combined with their profound experience and insightful knowledge of igaming, the team behind the brand is poised to give it their all to entertain players using the best that technology can offer.
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Source: Gambling Industry Press Releases
AUGUST 2018, VALETTA/MALTA, RIGA/LATVIA: Today SoftGamings and EGT Interactive announced partnership, which includes providing the EGT Interactive gaming content on the SoftGamings platform.
SoftGamings is a platform developer, gaming aggregator and i-gaming services provider with over 10 years of experience in the industry. The company’s game providers’ suite is regularly enriched with recognised titles, such as EGT this August.
EGT Interactive brings the 15 years of experience of the EGT’s land-based casino slots to the world of online casino games. More than 150 games are known worldwide in more than 85 countries.
EGT Interactive offers several kinds of game types – slots, table games, card games, Keno and jackpot games. They are available in both desktop and mobile.
The most popularity seem to be enjoyed by EGT classic slots, such as 40 Super Hot, Burning Hot and Extra Stars. All titles feature traditional design with fruit symbols, as it was in the beginning of the slot machine era. There is no ‘Spin’ or similar button – instead of it a player has to press the button with an exact amount of bet, which can be chosen each time new.
Apart from slots, EGT Interactive offers 2 kinds of table games – European Roulette and Lucky Circle, Card games – Four of a Kind Bonus Poker, Joker Poker and Jacks and Better Poker, and also Keno Universe.
The EGT Interactive jackpot is a multilevel system, where every level is marked with a different card suit. The jackpot cards bonus is randomly triggered after a single game is finished.
The EGT Interactive gaming content is already available for integration from the SoftGamings feature-rich platform. Casino operators can add this software to their casino environments via single unified API.
Irina Sazonova, Director of Partnerships at SoftGamings says: ‘I am happy about our new cooperation with the EGT Interactive. It is a recognised provider, which produces a really quality content, which perfectly suits our Slots Bundle and Casino Games Integration offerings.’
As an aggregator, SoftGamings offers several ways of acquiring games – Slots Bundle, Live Casino Bundle and Casino Games Integration. EGT Interactive content is available as a part of Slots Bundle – a package of the best slot providers in the i-gaming industry. It can also be integrated separately or pick up several more providers at operator’s wish.
About EGT Interactive:
EGT Interactive is a Bulgaria-based gaming provider that brings the 15 years of experience of the EGT’s land-based casino slots to the world of online casino games. The company is growing rapidly through constant innovation, consumer-centric approach and top-notch support. Every single aspect of the company’s products is designed in line with the customer needs. The EGT games are based on an attractive Return-to-Player (RTP) strategy, which has proven to increase the player lifetime value.
About SoftGamings:
SoftGamings is a B2B casino platforms provider and gaming systems aggregator. With over 10 years of experience in the industry, SoftGamings provides solutions demanded in the market and develops its own creative solutions – White Label, Turnkey, Self-Service, Bitcoin platform solutions, Bonus System Standalone feature, Sportsbook solution, Slots Bundle, Live Bundle and Casino Games Integration. SoftGamings’ strong IT team can also provide gamification possibilities, which is one of the major industry trends. Products portfolio includes 40+ gaming suppliers with 3000+ games. The company offers live dealer solutions from Evolution Gaming, NetEnt, Ezugi, Authentic Gaming, Lucky Streak etc, slots from NetEnt, Microgaming, BetSoft, Endorphina, Habanero, Booming Games, WorldMatch etc, sportsbook, hosting, licensing and banking services. Over 100 clients use SoftGamings products and services since 2007.
Source: Gambling Industry Press Releases
Week 17/2024 slot games releases
GR8 Tech Brings “Best Workplace 2024” and Fresh LatAm Insights from BIS SiGMA Americas
Kambi Group plc Signs Landmark Sportsbook Partnership with Choctaw Nation of Oklahoma
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EL Executive Committee Names Mr Ionut-Valeriu Andrei as New Member
Paddy Power launches new innovative Checkd Dev betting tool Mix ‘N Match
Play’n GO digs deep for the treasures of ancient kings
Atlas-IAC’s CEO Maxim Slobodyanyuk Talks Winning Strategies & Vision for Future Growth in the iGaming Sector
Gaming1 renews contract with ComplianceOne Group for fifth consecutive year
Wizard Games produces delicious treat with Cakes of Fortune
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