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Gaming Realms targets international distribution and US expansion

Snapshot

  • Sold consumer-facing business for £11.5mln
  • Retains the Slingo brand and intellectual property
  • Now focused on game development and worldwide licensing
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Quick facts: Gaming Realms PLC

Price: 17.76 GBX

AIM:GMR
Market: AIM
Market Cap: £50.51 m
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How it's doing

In June, Gaming Realms highlighted “high levels” of growth in its licensing revenues across April and May.

In a trading update, the AIM-listed firm said licensing revenue was up 80% over the five months to May 31, 2020, while revenues from its social division were 15% higher.

Gaming Realms said the stronger performance had been underpinned by continued growth in new licensing partners such as new deals with 888casino.com, Sky Betting & Gaming in the UK and Draft Kings in the US state of New Jersey.

Growth had also been driven by a “high level of take-up” for the group’s games by its partners end customers, aided by the release of three new games under the Slingo brand this year.

As a result of the increased performance, Gaming Realms said it now expects earnings (EBITDA) for the year ending December 31, 2020, will be “significantly ahead of current market expectations”.

May saw another Tier-1 partnership, this time with US group with Hasbro for Slingo.

Hasbro will look for licensing opportunities for new and existing territories in certain digital gaming categories outside the online real money gaming and lottery segments.

What the boss says: executive chairman Michael Buckley

"We are extremely pleased to, once again, be working closely with Hasbro on what will be a key strategic partnership in the expansion of our Slingo brand.

"At Gaming Realms our priority has always been to create innovative and engaging content for users and to increase its reach by expanding the offering across a variety of market sectors and, we believe that this partnership will enable us to further develop this."

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Inflexion points

  • In March, the company said it is launching its Slingo Originals content with Sky Betting & Gaming in the UK and with DraftKings in the US state of New Jersey
  • Slingo straightforward to sell, just a question of integration onto other platforms
  • International revenues to grow and reduce UK risks where regulation is tightening
  • New partners in the US, Asia and Scandinavia

What the broker says: Peel Hunt 

House broker Peel Hunt reiterated their ‘buy’ rating and 16p price target on Gaming Realms, saying the company’s revenue expansion was “high-quality growth” and expected that the firm would soon be able to report trading on a “cash-positive basis”.

“This will be a very important point of transition for a business that has been through a long and often painful transition from real-money gaming operator to content developer.

"There are risks to Gaming Realms from regulation but, as the revenue base continues to diversify, we believe those risks are diminishing."

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