Bragg Gaming Group, a Toronto-based gaming content provider, witnessed a significant surge in its revenue, climbing by a substantial 74.2% in the initial six months of its fiscal year. This remarkable growth was fueled by a doubling of contributions during the second quarter, as the demand for online casinos experienced a significant upswing during periods of confinement.
However, the company will be temporarily operating without its Chief Executive Officer, Dominic Mansour, who is taking a leave of absence to address personal matters. His responsibilities will be assumed on an interim basis by Adam Arviv, who will also join the Bragg board until the next gathering of shareholders.
Revenue for the six-month period ending on June 30th reached €20.9 million, with €12.1 million stemming from games and content, representing an increase of 85.3%. Software platforms and licensing fees contributed an additional €7.4 million, while Bragg reported €765,000 in revenue generated from turnkey and managed services, and €639,000 from other sources.
Fees associated with third-party content hosted on its content aggregation platform climbed to €11.9 million, driven by an elevated demand for Bragg’s offerings. The substantial increase in revenue resulted in a 64.4% rise in the supplier’s gross profit for the period, reaching €9.1 million.
Braggs operational deficit in the initial six months of the year was diminished to €4.3 million after subtracting €8.2 million in sales, general, and administrative expenses and €5.2 million in deferred and contingent consideration revaluation losses (associated with the acquisition of Oryx). The firm’s pre-tax loss rose slightly to €5.3 million after incorporating €945,000 in interest expense, but after deducting €741,000 in income tax.
However, the loss from its discontinued operations (the sold GiveMeSport business) dropped to €88,000, signifying its net loss decreased to €6.1 million. After taking into account a €161,000 foreign exchange adjustment for ongoing operations and a €15,000 loss from discontinued operations, Bragg’s combined loss for the period decreased by 6.9% to €5.9 million.
The adjusted EBITDA for the current period was €2.5 million.
Previously, the company’s second-quarter performance was robust, with revenue more than doubling year-over-year to €12.1 million. EBITDA for the quarter was €1.8 million, compared to a loss of €300,000 in the same period last year.
While the cost of revenue more than doubled this period, Braggs operating profit was €762,000 after subtracting administrative expenses and charges arising from deferred and contingent consideration revaluations, compared to a loss of €3.2 million in the second quarter of 2019.
Bragg stated the second-quarter performance was enhanced by the fact that players were confined to their homes due to the novel coronavirus (COVID-19) lockdown measures, with many turning to gambling for amusement.
This resulted in a surge in demand for its offerings, attracting eleven new clients during this timeframe.
Patak stated that Bragg introduced a novel data analysis and customer interaction platform to further propel future expansion.
After factoring in interest costs, income tax, and a €228,000 gain from discontinued operations, its net loss for the period contracted to €392,000. On a currency-adjusted basis, consolidated net loss declined by 95.1% year-on-year to €273,000.
“We are highly satisfied with the substantial progress we have made thus far in 2020,” remarked Bragg Chairman Paul Patak.
“We have attained robust revenue and EBITDA growth and made significant strides in diversifying our income stream and reaching new demographics.”
Owing to the robust first-half performance, Bragg has revised its 2020 revenue projection, anticipating revenue to be between €38 million and €40 million, an increase from the €35 million to €38 million range it provided following the announcement of its first-quarter results.
EBITDA is projected to be between €5.2 million and €5.6 million, considerably higher than the €1 million generated in the entirety of 2019.
However, for an unspecified duration, it will be guided by Arviv, chairman of Legacy Eight Group, a private equity fund specializing in acquiring and operating online gaming enterprises.
Legacy Eight was a stakeholder in Oryx prior to the acquisition and received a 19% stake in Bragg following the completion of the transaction.
Patak expressed their pleasure at welcoming Adam to the board and acknowledged his contributions as temporary CEO. They are confident that Adam’s presence on the board will facilitate the successful implementation of Prague’s existing strategic blueprint.
Aviv will supervise the financial operations backed by Canadian Imperial Securities to fund the revenue-sharing arrangement with Cheetah provider, Cavco Holdings. The agreement was originally scheduled to terminate on June 30th but has been extended to September 30th.
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