Gaming Realms PLC (LON:GMR) develops and licenses real-money gaming content for mobile devices.
Its core product is the Slingo range of slots and casino games, with various genres of Slingo games created for partners around the world.
How it's doing
In September, Gaming Realms reported £5.2mln of revenue in the first half of 2020, up 66% versus the same period of 2019.
The company said that the impacts of coronavirus lockdowns were supportive of the business, with more people playing its games, but similar levels of growth had been maintained since the end of June.
With the business enjoying high margin revenue growth and a relatively stable fixed cost base, earnings for the first half soared to £1.24mln from a £0.1mln loss a year earlier.
In terms of outlook, the company said that momentum is expected to continue into the second half with the roll-out of additional content to take advantage of an increasing number of players globally.
Deals have been signed with Hasbro and DraftKings in the US, and Oryx Gaming in Europe, adding to licensing deals with Flutter Entertainment, 888casino.com and Sky Betting & Gaming in the UK.
What the boss says: executive chairman Michael Buckley
"Our exceptional performance in the first half of this year is testament to the strength of the company's strategy of developing and licensing games to market-leading brands and gaming operators using our Slingo IP, which continues to deliver high margin revenues,” Michael Buckley said in September.
“Whilst our results were enhanced during the COVID-19 period of self-isolation, I am pleased to say revenues in the second half are holding onto levels achieved during the first six months.”
He added: “We are delighted to report that our innovative Slingo Originals content continues to gain momentum, reaching new international audiences thanks to our global network of distribution partners.
“We remain committed to building on this, and growing our global reach during the second half of the year by investing in our unique content and securing further strategic partnership deals.”
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Inflexion points
- In October, new Slingo Originals content was licenced to Paddy Power Betfair, part of FTSE 100-listed Flutter Entertainment, following deals in 2020 on both sides of the Atlantic
- Slingo is straightforward to sell, just a question of integration onto other platforms
- Management intention is to keep growing international revenues, reducing the reliance on the UK
- New partners have been added in the US, Asia and Scandinavia
What the broker says: Peel Hunt
House broker Peel Hunt said the company has potential for further profit upgrades this year after a strong first-half performance where revenue growth exceeded expectations.
How much of the growth relates to COVID-related lockdowns is difficult to gauge added the broker, though it expects some of the shift to be permanent.
Gaming Realms also launches in the US states of Pennsylvania and Michigan in 2021 and this can potentially transform the numbers, said Peel Hunt, while territories such as Italy and Spain have yet to be tapped.
Regulatory tightening remains a risk for the sector as a whole but 'buy' with a 30p target price was the broker’s investment view.
