Cherry online revenues up 44% in 2014
Strong final quarter helps operator post full-year digital revenues of SEK183.1m and narrow losses
Cherry AB this morning posted a 44% increase in full-year online revenues as the Swedish firm continues to move its digital business towards profitability.
Revenues for the 12 months ended 31 December were SEK183.1m (£14.3m) with the figure boosted by a strong Q4 performance during which revenues grew 50% to SEK56.8m (£4.4m).
The increase in revenues contributed towards a narrowing of losses with the operator posting negative full-year EBITDA of SEK18.3m (£1.4m), a 35% reduction on the SEK28.1m loss recorded in 2013.
Losses in Q4 narrowed further still, with EBITDA for the three-month period down to SEK4.3m compared to SEK12.4m in Q4 2013.
Meanwhile, customer deposits increased by 50% across the year from SEK260.1m to SEK390.6m, despite a small reduction in active players from 23,347 to 22,197.
Cherry said the higher deposits was down to an increasing the focus of its CRM strategy on VIPs and high rollers over the past 12 months, customers it said had a longer life cycles.
Last month Cherry acquired a 51% stake in Nordic-facing affiliate business Game Lounge, a deal the operator expects to boost actives by approximately 40,000 over the next three years and one acting CEO Fredrik Burvall said would propel the firm toward profitability.
“We believe that this [deal] will increase Cherry’s revenues and EBIT during the next few years and generate many new depositing customers, which will mean that we will reach profitability in this business area more quickly,” Burvall said.
The operator also offered a performance update on its subsidiary B2B games supplier Yggdrasil Gaming, which it said had signed 18 new customer agreements in 2014, six of which went live during the final three months of the year.
“It takes time to get customers live and get them to use all of the games and features, but we can conclude that the gaming operators that went live in 2014 made great progress, which has proved that the business model works and that the games and features Yggdrasil produces are popular,” Burvall said.
“As new operators are deployed, with a growing portfolio of games, revenues will increase,” he added.
Burvall was installed as acting chief executive in December after a management shake-up at the firm saw Emil Sunvisson stand down as CEO and take-up an advisory role. The management rejig also saw major shareholder Morten Klein take on a more active position in business development.
The casino operator is currently preparing to launch a sportsbook after signing a deal with B2B sportsbook provider SBTech in December.
Cherry’s share price had fallen SEK0.5 to SEK36.5 after early morning trading.