Licensing revenue drives growth at Gaming Realms in H1
Gaming Realms has put an 18% year-on-year rise in revenue primarily down to growth within its licensing division, while the mobile games developer was also able to cut its pre-tax loss in the period.
Total continuing revenue for the six months to June 30, 2019 amounted to £3.2m (€3.6m/$4.0m), up from £2.7m in the corresponding period last year.
Licensing overtook social activities to become the main source of income for the developer in the first half, with licensing revenue rocketing 167% year-on-year from £600,000 to £1.6m.
This was boosted by 13 partners going live throughout 2018 and the first half, while Gaming Realms also added a number of games to its content portfolio.
“Our strategy to leverage our market leading ‘Slingo Originals’ games library into the UK and international gaming markets continues to gain momentum,” chief executive Patrick Southon said.
“Licensing our content to leading brands and gaming operators is delivering high margin revenues and the disposal of the RMG assets has given us greater resources to invest in content creation.
In contrast, social revenue fell 29% from £2.1m to £1.5m, while other revenue amounted to £100,000. Gaming Realms noted that it is in the latter stages of rationalising the social division.
In terms of spending, marketing costs were lowered from £194,862 to £113,220, but operating expenses were up slightly from £658,615 to £717,162. Gaming Realms also saw administrative expenses climb from £2.2m to £2.8m.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell from £195,462 to a loss of £946,052, but the developer said that the majority of this was from discontinued operations.
Adjusted EBITDA for continuing operations stood at a loss of £6,280, compared to negative £441,133 last year. Total continuing EBITDA amounted to a loss of £427,178, an improvement on negative £494,331 last year.
Higher revenue and lower spending also allowed Gaming Realms to cut its loss before tax, with this down from £3.1m in the first half of 2018 to £2.5m in the same period this year.
However, net loss for the period increased from £2.6m to £3.2m, primarily due to losses from discontinued operations.
“We are currently performing in line with management's forecasts and with new commercial developments in the pipeline we are confident in meeting our full year objectives,” Southon added.
Confirmation of the first half results comes after Gaming Realms in July finalised the sale of its Bear Group B2C subsidiary to River iGaming. The agreement, first announced in February, was worth a total consideration of £11.5m.