The Prague Gaming Group has established a special panel to examine strategic choices for its operations, as the provider reported a net loss of €5 million (£4.3 million/$5.4 million) for 2023, despite revenue expansion.
The Prague Gaming Group has formed a special panel to examine strategic choices for its operations. The panel will be led by independent board member Don Robertson and will consider all strategic choices. These choices may include the sale of the group or its assets, as well as mergers, financing and further acquisitions, or other strategic choices.
Prague stated that no timeline has been established for the completion of the strategic review and no decisions have been made. The company added that there is no assurance that any transaction will ultimately be reached.
The group stated it will provide further updates in due time, while its management team will continue to focus on executing its strategy and business plan.
Revenue expansion in 2023
The announcement came alongside Prague’s release of its 12-month results for the year ending December 31, 2023. During this period, revenue reached €93.5 million, a 10.4% increase from the previous year, which Prague attributed to the impact of new partnerships and market launches.
Prague has entered into content agreements with several major operators, such as Betsson, 888/William Hill and PokerStars.
The team also entered new territories through collaborations, including a joint venture with Caliente in Mexico and with Microgame in Italy.
Moreover, Bragg declared that it will continue to broaden its reach in existing markets through various new releases. The team highlighted the US, UK, Spain, and Switzerland as key areas for growth in 2023.
In response, CEO Matevž Mazij, who joined last August, praised Bragg’s ongoing strategic efforts. He stated that the company will focus on being a content-driven iGaming B2B provider and will exercise “careful” control over spending.
“By continuing to expand our higher-margin proprietary and exclusive third-party game catalog at a faster rate to a wider range of new partners, we are well-positioned for long-term growth, including income, gross profit, and adjusted EBITDA, as well as improved operating margins,” Mazij said.
Netherlands vital for Bragg, despite new hurdles
From an annual data perspective, the Netherlands is a core market for Bragg, and it holds a substantial lead. Revenue in 2023 was €33.6 million, down 8.9% from €36.9 million the previous year.
Bragg stated that it maintains a “leading” position in the country with five clients using its Player Account Management (PAM) system. However, the revenue decline also reflects some worrying issues.
Since July 2023, Bragg has stated that it has faced challenges due to increased competition and the introduction of new rules.
Bragg has inked a fresh pact with BetCity, a subsidiary of Entain, in the final quarter, but certain stipulations require re-negotiation.
Bragg also disclosed that its operations in the Czech market are experiencing continuous growth, and it is investigating new avenues to expand into other global territories utilizing its PAM platform, content aggregation, player engagement tools, and managed services. The Czech Republic is classified under the “Other” segment, which witnessed a revenue surge of 27.3% to €8.4 million.
In other European regions, Malta observed a revenue upswing of 22.6% to €17.9 million, Croatia experienced a revenue increase of 43.3% to €4.3 million, Belgium saw a revenue boost of 340.6% to €3.7 million, and Serbia witnessed a revenue rise of 12.5% to €1.8 million.
What about beyond Europe?
On a global scale, Bragg also reported some expansion. Curaçao stands as Bragg’s second largest core market after the Netherlands, witnessing a revenue increase of 11.6% to €19.2 million in 2023.
In the United States, revenue also climbed by 17.5% from €4 million to €4.7 million. Bragg reiterated that this growth was attributed to partnerships with new operators, which broadened its overall operations.
“Our worldwide dissemination of proprietary and exclusive third-party content is expanding at a rapid pace, particularly with a growing number of top-tier operators,” stated Mazij. “We anticipate these games to see further adoption globally in 2024.”
During the previous twelve months, we successfully introduced 29 completely new self-service online games worldwide, encompassing 26 novel games for the European online casino sector and 15 for the North American online casino sector. We anticipate maintaining or surpassing this game release rate in the current year.
Escalating costs resulted in a net deficit of $5 million.
Nevertheless, nearly all expenditures experienced an increase. The cost of revenue was the primary expense, reaching €43.6 million, a 9.8% year-on-year rise.
Other noteworthy expenses include €50.8 million in sales, general, and administrative expenses, an 8.6% increase. This led to an operating deficit of €777,000, an improvement from the €828,000 loss in the previous year.
However, interest and other financing expenses totaled €2.1 million, resulting in a pre-tax loss of €2.9 million, in comparison to €1.9 million in 2022.
Bragg paid €910,000 in income taxes and recorded a negative cumulative foreign exchange adjustment of €1.2 million. Consequently, the net loss for the current year reached €5 million, exceeding the €1.9 million loss in the previous year, with higher costs offsetting revenue growth.
However, there was some positive news regarding the adjusted EBITDA, which expanded by 25.6% to €15.2 million.
Fourth-quarter revenue decreased
Bragg’s annual results were influenced by a decline in fourth-quarter revenue. Fourth-quarter revenue decreased by 1.3% to €23.4 million.
The organization did not release comprehensive results for the quarter.
In spite of this, the firm did report a functional shortfall of €431,000, in comparison to a gain of €162,000 in 2022. Modified EBITDA also declined by 23.7% to €2.8 million.
Bragg did highlight that both income and modified EBITDA were higher than in the third quarter, while its functional shortfall was lower.
Bragg’s Perspective
Looking ahead to 2024, Bragg anticipates income and modified EBITDA to increase. Income is projected to be between €102 million and €109 million, implying an expansion of 9.1% to 16.6%, with the midpoint representing an expansion of 12.8%.
In terms of modified EBITDA, Bragg stated it could be between €15.2 million and €18.5 million. This would translate to an expansion of up to 21.7%, while the midpoint of that range would indicate an expansion of 10.9%.
“Our strategic plans have positioned Bragg as a key content source for leading international igaming operators, setting the stage for our continued profitable growth,” said Mazij.
“We are certain that we have the appropriate strategy, financial strength and infrastructure in place to maintain momentum in our business while executing plans that drive cash flow growth and generate additional value for our stockholders.”
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