GiG adopts further cost-saving measures as Q1 revenue hits €31m
Malta-based supplier to reduce headcount and restructure sports division after quarterly return to growth
Gaming Innovation Group (GiG) today reported flat Q1 2020 revenue of €31m amid a return to growth for the first time in five quarters.
First quarter revenue dipped 4% year-on-year, although increased by 6% compared to the €29.4m recorded in Q4 2019. GiG’s share price was down 14% at the time of writing.
EBITDA for Q1 2020 dropped by 37% to €2.5m, down from €4.1m in the prior corresponding period, while revenue from GiG’s media services division grew by 9%.
Q1 marked the final reporting quarter for GiG’s B2C portfolio of brands including Rizk, Guts and Kaboo after it was offloaded to Betsson in a €33m deal.
The Betsson deal was the highlight of a busy reporting period for GiG, which has now fully divested its B2C business following a strategic review initiated by CEO Richard Brown.
Brown said: “The Betsson transaction paved the way for multiple strategic upsides but also allowed us to strengthen the balance sheet and reduce the company’s debt position significantly.
“GiG now has a fully focused, end-to-end B2B organisation. We are confident we can continue to deliver a leading product offering and excel in the egaming industry as a multifaceted B2B provider,” he added.
The strategic review saw cost-saving measures adopted throughout the Malta-based business as the number of employees decreased from 695 to 594 year-on-year.
GiG is aiming for 430 employees by the end of 2020 with further reductions planned, although 63 have already headed to Betsson as part of the B2C transition.
GiG workers span across Malta, Spain, Gibraltar, Denmark and Norway. Approximately 135 people work in gaming, 180 in platform services, 60 in sports betting and 105 in media services.
GiG CEO Richard Brown
The supplier highlighted its sportsbook division as a major area to cut costs and initiated a restructure throughout March and April which could lead to €400k in monthly savings from Q3.
As part of the strategic review, GiG actively discussed possible joint ventures with potential sportsbook partners, although the coronavirus pandemic has put discussions on hold.
Former director of sports Endre Nesset left the business last week.
GiG’s full-year guidance remains unchanged, with 2020 revenue expected to be between €70m-€75m, with EBITDA in the range of €14m-€17m.