Stride Gaming PLC – Interim Results

Stride Gaming plc (AIM: STR), a leading online gaming operator, announces its interim results for the six months ended 28 February 2019.

Key Financials 

			Unaudited	Unaudited
			Six months ended	Six months ended
			28 Feb 2019	28 Feb 2018	Change
			£’000	£’000	%
Net Gaming Revenue (“NGR”) ^			39,034	44,897	(13.0%)
Adjusted EBITDA*			6,155	7,998	(23.0%)
Adjusted net earnings *			5,229	7,395	(29.3%)
Profit after tax and discontinued operations			1,745	1,465	19.1%
Adjusted basic net earnings per share (in pence)			6.9	10.3	(33.0%)
Basic profit per share (in pence)			2.3	2.05	12.2%

Financial highlights:

• Regulatory headwinds across the UK online gaming market impacted the Group’s performance in the first half of the financial year, resulting in a 13% decrease in Real Money Gaming NGR, a 23.0% decrease in Adjusted EBITDA* and a 29.3% decrease in Adjusted net earnings*;
• Proprietary platform revenue decreased by 9% to £27.0 million (H1 2018: £29.7 million) and non-proprietary platform decreased by 24% to £11.5 million (H1 2018: £15.1 million), reflecting the Group’s strategy to shift players onto the higher margin, in-house platform;
• The Group retains a solid balance sheet with net cash of £21.9 million (31 August 2018: £28.7 million);
• Post period receipt of contingent consideration of £5.67 million following the disposal of the available-for-sale investment in QSB Gaming Ltd

Operational highlights:

• Proactive strategy to shift towards “casual games” players resulted in:
  –  Deposits down 8% to £73 million (H1 2018: £79 million);
  –  Yield per player** up 4% to £147 (H1 2018: £141);
  –  Funded players^^ down 23% to 118,000 (H1 2018: 153,000);
  –  Group gross gaming revenue^^^ (“GGR”) through mobile and touch devices increasing by 6% and now represents 72% (H1 2018 68%) of the total Real Money Gaming GGR;
• Stride Together, the Group’s B2B offering, has seen significant traction during the year and performed ahead of management’s initial expectations;
• Rummy Passion business continued to perform in line with the Board’s expectations with further investment in the team, marketing and technology,

Post balance sheet events:

In February 2019, the Board of Stride announced that it was embarking on a strategic review of the business to thoroughly explore all options available to the Group in order to maximise value for its shareholders. Today, the Board of Stride has separately announced that it is in advanced discussions on the terms of a possible recommended cash offer for the Company, for the entire issued and to be issued ordinary share capital of the Company.

In light of these advanced discussions, the Board has resolved that no interim dividend in respect of the six month Period will be declared and paid until these discussions have been resolved.

Eitan Boyd, Chief Executive Officer of Stride Gaming commented:

“The Group has delivered a resilient performance in the first half of the year despite challenging trading conditions, reflecting the strength of our proprietary technology, as well as the skill and commitment of our team.”

^ NGR includes the Group’s share in Aspers revenue and was adjusted only to demonstrate the effect if it was consolidated on a 50% basis. This adjustment increased revenue by £2.2 million (H1 2018: £1.9 million) without an effect on the Adjusted profit results.
* Adjusted net earnings and Adjusted EBITDA exclude income or expenses that relate to exceptional items and non-cash share-based charges. A reconciliation between the current year’s reported figures and the prior year’s figures to Adjusted net earnings is shown in the Chief Financial Officer’s report.
**Yield per player means the total net cash in the last three months of the Period divided by the number of funded players at the end of the Period.
^^Funded player means an active player who has made a deposit with their own funds within the last three months of the Period.
^^^ GGR means gross gaming revenue, being total bets placed by players less winnings paid to them.