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”.
In a note on Tuesday, analysts at 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. This year’s forecasts are well underpinned by strong current trading and there may be scope to upgrade again, and for future years, when we get into [the second half of 2020”, the broker added.
Shares in Gaming Realms surged 36.3% to 13.8p in late-morning trading.
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