Bragg names new CFO as Q3 net loss narrows

12 November 2019

Bragg Gaming Group has reported revenue of CAD$10.0m (£5.9m/€6.9m/US$7.6m) for the third quarter of 2019, while starting tomorrow (November 13), the business will have a new finance chief as veteran Stephen Prowse takes over the role from Ashkay Kumar.

Revenue for the three months to 30 September would have come in at $10.6m, were it not for the online media division, comprising the GiveMeSport (GMS) assets, being listed as a discontinued operation.

Following the publication of Bragg’s first half results in August, it announced that it had initiated a strategic review of the division, with a view to selling it off in order to focus on B2B gaming.

This strategic review is expected to be completed in the first quarter of 2020, and in the interim, Bragg said, it would continue to enhance the offering. This has seen the GMS site relaunched in July, which resulted in a 46% increase in site visitors in October, to 23.3m.

The B2B gaming division, meanwhile, generated revenue of $10.0m, of which $1.8m came from the US market, with a further $8.2m coming from European markets, excluding the UK. While Bragg did not provide year-on-year comparisons, chief executive Dominic Mansour noted that Oryx’s revenue was up 30% from Q3 2018.

Revenue-related costs came in at $5.7m in Q3, leaving a gross profit of $4.3m for the quarter. After general and administrative expenses of $4.2m, and sales and marketing outgoings of $220,832, Bragg posted an operating loss of $117,479 for the period.

After income tax, and factoring in a $129,507 loss from GMS, plus a $12,260 foreign exchange gain, Bragg’s net loss for the quarter stood at $316,513 - a marked improvement on the $11.3m loss reported for Q3 2018.

“I am extremely pleased with the company’s progression over the past quarter,” Mansour said. “We’ve proven that, with our modern technology and seamless integration process, we are able to expand our operator base at a significantly faster rate than the competition.

“I am particularly pleased that the strong momentum of operator launches experienced in the first half of the year continued into Q3 with the successful launch of 10 new operators,” he continued. “We expect this momentum to further accelerate throughout Q4 with more than 14 launches in the pipeline.”

Following the end of the quarter, Bragg agreed a partnership with sportsbook technology provider Kambi Group to provide casino services and player account management solution to operators, initially focusing on the US.

The partners have already struck a deal with New York’s Seneca Gaming Corporation, a tribal operator with three casinos in the state. This will see Bragg and Kambi provide a combination of products and services to the business.

Mansour described the partnership, and the Seneca deal, as “huge stepping stones” for Bragg as it looked to expand its international reach.
“Our strategic focus in the US is to partner with tier-1 casinos and operators,” he explained. “I believe that this Seneca deal will be the first of many in the coming years, particularly as the legal landscape continues to mature.”

From tomorrow, the company will have a new finance director, with Ashkay Kumar stepping down for personal reasons.

“I would like to thank Akshay for his hard work and contributions to Bragg,” Mansour said. “Our team wishes him all the best for the future.”

Kumar’s replacement, Stephen Prowse, previously served as group finance director for PartyGaming, and continued in the same position following its merger with bwin in 2011.

During his time with PartyGaming, Bragg said, Prowse was “instrumental” in the acquisition of Foxy Bingo and the €2.1bn bwin merger. Mansour noted that his M&A expertise would be “extremely valuable” to the business.

Prowse added: “I am delighted to join Bragg at such an early and exciting point in its growth trajectory.  Bragg has market-leading technology, products and people. 

“As such, I see enormous potential for this business and am very much looking forward to being a part of that growth.”