Cherry leaves ComeOn integration issues behind as revenues climb 17%
CEO Anders Holmgren says operator is “back on the growth curve envisaged” after triple digit annual revenue rise
Cherry Group today announced a 17% rise in Q4 revenues to €61m as full year revenues rose by 104% to €227m.
The group said profitability improved in Q4 which saw EBITDA increase by 37% to €14m, with an EBITDA margin of 23.3%.
The positive figures were posted despite the difficult integration of its online business ComeOn, which led the operator to drop its profit forecasts in Q3.
Online gaming revenue increased 10% to €49m with 8% EBITDA growth, while the previously flagged slow-down was offset by accelerated growth in Q4 driven by sports margin.
Cherry CEO Anders Holmgren said: “Over the year, we integrated the operations of B2C company ComeOn, Cherry’s largest acquisition over the years, into our online gaming business area.
“For the most part, this process has progressed as planned, although, in mid-2017, we saw that the company’s costs, market focus and management were not living up to our expectations.
“Following an intensive period in the second half of the year, the company is back on the growth curve that we envisaged.
“Together, ComeOn’s management and I have identified several priority improvement factors for 2018, and these will be implemented over the year,” he added.
Regulus Partners (RP) have said that Cherry’s big issue for 2018 will be to reignite growth in B2C to mitigate a change in Swedish gambling regulations and social responsibility requirements elsewhere.
RP analyst Paul Leyland said: “Cherry has rapidly bought into and built a substantial Nordic online gaming business with material market share estimated at 8% in Sweden.
“Integration growing pains were almost inevitable and appear to be being overcome.”
Cherry-owned supplier Yggdrasil Gaming also posted impressive Q4 figures today, with revenues up 61% to €5m.