Stride Gaming reiterates UK commitment as losses narrow
CEO Eitan Boyd pledges to “concentrate on optimising undoubted opportunities” in UK market
Stride Gaming today reported an annual revenue rise of 8.7% to £89m although the upturn was largely offset by increased taxes and regulatory pressures in the UK.
Adjusted EBITDA dropped 18.2% year-on-year to £16.1m, down from £19.7m in 2017, as pre-tax losses for the 2018 amounted to £5m, narrowing significantly from the £25.7m loss announced last year.
The fall in EBITDA was driven by the impact of an additional free bet tax on Remote Gaming Duty (RGD) implemented in 2017, while the 2019 RGD increase to 21% could cost the firm £6.6m.
Stride also felt the pinch of increasing regulatory costs in 2018, including a £7.1m fine from the UK Gambling Commission (UKGC) for anti-money laundering (AML) and social responsibility failures.
Despite significant regulatory outlays, Stride’s proprietary platforms delivered growth of 23.8%, demonstrating “an impressive return to form” according to Regulus Partners.
Stride Gaming CEO Eitan Boyd
Stride promised to focus on international expansion in May as chairman Nigel Payne warned of a “fundamental increase in the cost of doing business in the UK”, but CEO Eitan Boyd today reaffirmed the bingo operator’s commitment to remaining in its core market.
He said: “We recently concluded lengthy discussions with the UKGC, not least so we can singularly concentrate on optimising the undoubted opportunities for us in the UK market, a market which, while challenging, remains the largest single regulated gaming market in the world.
“Since the start of the current financial year, trading has been satisfactory and in line with our expectations after having absorbed further fiscal and regulatory costs to reflect the changed trading environment our industry is required to operate within.
“We have and will continue to adjust and right-size our cost base to mitigate these pressures.”
Regulus Partners analyst Paul Leyland added: “Stride’s £7.1m fine plus legal expenses demonstrates the extent to which the regulator has moved away from a stern slap on the wrist and a demand for ill-gotten gains to be disgorged.
“Great Britain’s point-of-consumption regulation has teeth and the regulator is clearly willing to bite where it deems necessary,” he added.