Bragg looks to offload GiveMeSport to focus on Oryx Gaming

27 August 2019

Toronto-listed gaming operator and supplier Bragg Gaming has launched a strategic review of its online media division, comprising its GiveMeSport and GiveMeBet assets, with a view to selling off the unit to focus on B2B operations.

Since Breaking Data acquired GiveMeSport (GMS) to form Bragg Gaming, a number of key improvements had been made to the media portal’s platform, user base and content strategy.

Bragg said it believed the time was right for a review of the division, with Sequence Advisors appointed to pursue potential sales opportunities, claiming to have already received expressions of interest from a number of groups.

In the first half of Bragg’s financial year, to 30 June, GMS reached 232 million unique Facebook users. Video views on the social network were up 186% year-on-year, with video interactions increasing 294% for the same period.

In June, Bragg added, GMS reached 160 million users, compared to 29 million in January this year, with the launch of GiveMeSport Women, providing in-depth coverage of women’s sports, further strengthening its growth prospects. The sale plans have seen GMS counted as a discontinued operation in the supplier’s financial results for the period.

GMS saw revenue plummet for the six months to 30 June, falling from CAD$6.8m in the prior year to $2.2m. After revenue-related costs of $920,607, the business posted a gross profit of $1.3m.

However this was wiped out by expenses of $3.6m, resulting in the division posting a net loss after tax of $2.2m.

The sale of the GMS assets would allow Bragg to focus fully on B2B activities, having entered the space through the acquisition of igaming content aggregator Oryx Gaming, agreed in August 2018.

For the six months to 30 June, Oryx launched 22 new operators, with a further 24 to be on board in the coming months.

“ORYX had another strong quarter,” Bragg chief executive Dominic Mansour said. “In addition to the record number of operators integrated in the first half, we signed agreements with Red Tiger, Stakelogic, Betsson, and Casumo whose extensive portfolio of games are now fully integrated into the ORYX Hub platform.”

“We continue to engage with highly innovative and best-of-breed partners to supplement our broad content base and further improve our user-experience.”

Oryx was also able to diversify its geographic base, helping mitigate risk and reduce the concentration of clients in certain markets. This saw revenue from clients with German operations increase by 30% in H1. While the supplier noted the federal State Treaty on Gambling may put this new revenue at risk, it added that Schleswig-Holstein licensed operators could benefit from the shutdown of online casino in other states.

Revenue from all remaining operators was up by 87% on the prior year.

This helped the supplier’s revenue grow to CAD$18.0m for the six-month period, a 49% year-on-year increase. Cost of revenue for the period amounted to $9.7m, leaving a gross profit of $8.3m. Expenses for the six months increased to $15.2m, however, largely as a result of a $5.5m charge related to the change in value of the contingent consideration owed to Oryx’s former owners.

This resulted in Bragg posting an operating loss of $7.3m for H1. After financing charges and income tax expenses, plus the loss $2.2m loss from the GMS division, net loss for the half stood at $9.6m.

For the quarter ended 30 June, Bragg reported revenue of $8.8m. After revenue-related costs of $5.0m, gross profit for the period amounted to $3.8m. Expenses of $10.0m, plus sales and marketing costs of $157,218 saw the business post an operating loss of $6.4m.

Bragg’s net loss for the quarter came in at $7.6m once finance-related costs, income tax and the GMS loss were factored in.

“I am very pleased with Bragg’s progress this quarter,” Mansour said. “During the six months since Bragg’s inception, we have acted on several strategic initiatives that have helped us transform into a global gaming company. This quarter, we focused on investing in the business in order to expand our footprint and accelerate future growth." 

Looking at current trading, Mansour added: “Performance since the end of June has been ahead of our expectations, with monthly operator GGR on the casino aggregator platform 6% ahead of the three-month daily average, despite the typical slowdown during the summer months.”