New GiG CEO to conduct “total business review” as profits drop 46%
COO Richard Brown appointed as permanent CEO to create “a clear directional strategy” and reduce costs after tough third quarter
New Gaming Innovation Group (GiG) CEO Richard Brown has pledged to conduct a “total business review” of the Malta-headquartered firm after a poor set of financial results in Q3, including a 46% drop in EBITDA.
Brown, who was acting CEO at the firm after the departure of Robin Reed, was appointed to the full time role this morning alongside the Q3 results announcement.
Q3 revenues fell 19% to €30.2m due to Swedish market impact and the termination of a key customer contract in Q4 2018, stripping off €4.5m and €2.7m respectively.
EBITDA also decreased by 46% to €2.7m, down from €5m in Q3 2018, although B2C EBITDA reached an all-time high of €2.4m.
Casino brand Rizk was the biggest driver of growth, representing 75% of B2C revenues with annual growth of 2% and an EBITDA margin of 17.3%.
B2C revenue reached €20.2m for Q3, down from €24.4m in the prior corresponding period, while B2B revenue for Q3 hit €11.9m down from €15.4 last year.
B2B EBITDA also dropped significantly by €3.4m to €300k.
Petter Nylander:
"Sweden hurting us and is a major reason for our overall decline in group revenue going from €37.3m to €30.2m. Like many of our peers, we were hit by the Swedish regulation in every vertical and we have re-allocated marketing spend to more lucrative markets"
— SPELDIALOGEN (@SpelSverige) November 6, 2019
Brown pledged a full scale review of the business, adding: “The review will be the full scope of the company. It will be broad and wide-ranging and we won’t leave any stone unturned when trying to work out value proposition of each arm.”
GiG chairman Petter Nylander said the gaming industry had been in “a bit of a storm” while going through a period of structural change.
“With increased regulation and taxation putting pressure on margins, it is time to adapt to the new reality in order to steer out of the epicentre,” Nylander said.
“I am confident that we are making the necessary strategic adjustments to ensure the full potential of Gaming Innovation Group and shareholder value creation.”
GiG CEO Richard Brown
Nylander said Brown was the best person to drive the necessary changes in the business.
He added: “The gambling industry is still backed by fundamental strong underlying growth and we need to plan and position ourselves to be most relevant to our partners and end users in order to benefit and accelerate our sustainable growth.
“Richard has a strong track record of operational excellence and will be focusing on making the company more efficient by creating a clear and directional strategy, reducing costs and driving execution,” he added.
GiG’s share price was down 10% at the time of writing.