Aug 16 / 2018
Latest News / Casino & Gambling

Cherry Group publishes interim report

Interim report January–June 2018

SiGMA iGaming Cherry Group publishes interim report
“Cherry has strong and broad operations meeting the market’s demand for quality in everything we deliver.”

Cherry’s published document of growth manifests 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.

Gunnar Lind, the Acting President and CEO of Cherry, commented: “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 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).”

“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 June, we were able to complete the acquisitions of additional shares in subsidiaries Game Lounge and Almor Holding.”

“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.”

Market outlook:

At present, the market for gaming is growing exponentially and Cherry estimates that the demand within the Group’s largest geographic markets will continue to increase. The Group continuously studies conditions for new business within the related business areas and geographic markets in and outside Europe.

The Group’s objective is to generate shareholder value through being an active participant within the development of new and existing companies in the gaming, media and entertainment sector. The Group aims for the companies to become market leaders in their respective areas by further constructing 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.

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