Gaming Realms – Full Year Results

Gaming Realms is a creator and licensor of innovative games for mobile, operating in the UK, US, Canada and Europe. Flagship brand Slingo® is a popular and unique game genre combining elements of slots, bingo and table gameplay. These games are licensed by some of the world’s biggest online gaming operators, including DraftKings, Sky Betting & Gaming and GVC, and distributed directly to operators or via global partners such as Scientific Games using the company's proprietary Remote Game Server platform.

• High margin, licensing focused strategy drives growth in 2021

  Revenues for 2021 grew by 29% to £14.7 million, mainly as the Licensing division put in growth of 47% to £11.1 million. This came after a range of new distribution and partner deals and launches in new markets helped unique players grew by 48%. Meanwhile, the non-core Social Publishing division’s revenues fell by 8% to £3.6 million, or by just 1% on a constant currency basis, after the mainly dollar denominated business experienced currency headwinds.

• Operational gearing drives profits

  At the adjusted EBITDA level (adding back share option and related charges) profits surged by 71% to £5.7 million, ahead of our expectation for £5.4 million. This was driven by the company’s strong operational gearing, along with head office costs falling from £2.9 million to £2.5 million.

• Growth continues into Q1 2022, with trading ahead of expectations

  Licensing revenue was up by 43% in Q1 to £3 million and unique players increased by 39% to over 1.5 million. This was against a very strong comparator, with licensing revenues up by 60% in Q1 last year. Management noted that while still early in the year, trading is currently ahead of expectations and that they have confidence in the full year outlook.

• Further expansion in 2022 set to see strong growth continue

  For the rest of the year the growth strategy will continue to focus on; international expansion; adding new distributors, operators and licensors; and further penetration with existing distributors and operators driven by new games. We are looking for revenues of £20.8 million and adjusted EBITDA of £8 million for the year. Updating our valuation we set a target price of 53.66p and retain our stance of Conviction Buy.