Stride to focus on cost controls

6 February 2019

Stride Gaming will retain its focus on controlling costs after non-executive chairman Nigel Payne said that the bingo operator had performed in line with expectations in “challenging trading conditions” since the start of the financial year.

Payne, speaking at Stride’s annual general meeting today (February 6), reiterated the operator’s plans to migrate more customers to its higher-margin proprietary platform, which generated a 23.8% increase in revenue to £60.5m (€68.9/$78.4m) in the 12 months through to the end of August, accounting for 68% of total turnover.

The company reported an 8.7% year-on-year increase in net gaming revenue to £89m for the year through to August 31, with player deposits up by 6.8% to £157m.

However, yield per player fell by 2% to £144 over the 12-month period while adjusted earnings before interest and deductions slumped by 18.2% to £16.1m, with Stride blaming a new tax on free bets. Funded player accounts also declined by 6.1% to 137,000.

“The group’s trading performance since the start of the financial year has been broadly in line with the board’s expectations despite the continued challenging trading conditions,” Payne said today.

“The board remains confident in Stride’s ability to manage ongoing fiscal and regulatory market pressures and leverage its unique infrastructure to capitalise on significant growth opportunities in the dynamic UK market. The group has a clear focus on winning and retaining mass market, recreational customers onto its bingo and casino sites.

“Cost control and efficiencies remain a core focus area for the group. Stride continues to leverage its infrastructure and proprietary technology to migrate more customers onto the group’s higher margin proprietary platform and drive cost synergies across the business.”

The company also confirmed a special dividend of 8p per share relating to the earn-out agreement associated with Rank Group’s acquisition of Spanish-facing operator QSB Gaming, in which Stride held a 24.2% stake. The earn-out transaction is expected to take place by the end of May, with the dividend being paid in June.

“The board believes the group will continue to be highly cash generative and the board remains committed to its revised dividend policy to distribute at least 50% of adjusted net earnings in dividends,” Payne added.

Stride’s figures for the current financial year will take into account a £7.1m fine, imposed by the UK Gambling Commission in November, in relation to compliance failures at its Daub Alderney subsidiary. Stride, which labelled the punishment as “excessive and disproportionate”, had set aside £4m for the anticipated fine.

The operator, which said that it would not appeal against the fine, asked the commission to reconsider the penalty late last year. The commission told today that it is unable to comment on individual cases, with no further updates having been disclosed publicly since the fine was imposed.