Stride Gaming PLC (LON:STR) saw its shares drop on Tuesday after the online gaming operator warned that its first-half revenue will be lower than expected due to recently implemented regulatory changes.
In an update on current trading, the AIM-listed company said it expects to report net gaming revenue for the six months to the end of February 5% lower than expected due to a disruption from fiscal and regulatory changes in the second half of 2018.
However, the group added, it does now see signs the impact has been largely absorbed and its business model is adjusting accordingly.
It said, whilst it does not expect to recover the first half revenue shortfall through trading in the second half, it is confident its strategy of migrating customers its higher margin proprietary platform will deliver strong long term, cash-backed value for shareholders.
The company also said it expects to report a strong performance from its Stride Together joint venture and is encouraged by further new partnership opportunities.
Eitan Boyd, Stride Gaming’s CEO commented: “Trading was testing as we adjusted to the new paradigm of the UK's current fiscal and regulatory environment, however we continue to invest in our proprietary technology, product offering and content which provides us with a strong foundation from which to adapt to these changes.”
He added: “We are now well advanced with our review of strategic options to maximise value for shareholders. We will make a future announcement when appropriate."
The group said it will report its results for the six months to 28 February 2019 in May.
In late afternoon trading, shares in Stride Gaming were down 9% at 117p.