Cherry encouraged by growth in online gaming

Cherry has released its third interim report for the nine month period ending September 30, 2013.

The company reported good growth in its online gaming interests of 32 percent, achieved through a significant investment in marketing which has negatively affected profit in the short term.

Key highlights for the three month period ending September 30, 2013 include:

–     Group turnover of SEK 69.9 million (Q3/2012: SEK 61 million), an increase of 15 percent.
–     Online Gaming contributed SEK 54 052 (Q3/2012: SEK 19 984), up 32 percent.
–     Online Gaming registrations grew 170 percent, active player increased by 35 percent and deposits grew by 47 percent.
–     EBITDA amounted to SEK -4.4 million (Q3/2012: SEK 4.2 million).
–     EBIT amounted to SEK -9.8 million (Q3/2012:  SEK 2.9 million) – affected by a non-recurring impairment of capitalized development costs of SEK -3.1 million.
–     The result after tax amounted to SEK -11.8 million (Q3/2012: SEK 1.2 million) equivalent to SEK -0.90 (Q3/2012: 0.09) per share after dilution.
–     Group cash amounted to SEK 95.4 million (Q3/2012: SEK 39.5 million) as at September 30, 2013
–     Restaurant Casino increased turnover by 1 percent.

Key highlights for the nine month period ending September 30, 2013 include:

–   Group turnover increased by 15 percent and amounted to SEK 191.3 million (9M/2012: SEK 166.7 million).
–   Online Gaming grew by 32 percent.
–   EBITDA amounted to SEK -13.3 million (9M/2012: SEK 9.9 million). EBIT amounted to SEK -22.0 million (9M/2012: SEK 5.9 million).
–   The result after tax amounted to SEK -23.1 million (9M/2012: SEK 1.8 million) equivalent to SEK -1.76 (9M/2012: 0.13) per share after dilution.
–   Result after tax (including divested operations) amounted to SEK 3.3 million (9M/2012: SEK 22.1 million) equivalent to SEK 0.23 (9M/2012: SEK 1.68) per share after dilution.

Emil Sunvisson, chief executive officer of Cherry, commenting on the results, said:

“A solid customer intake within Online Gaming and increased deposits characterized also the third quarter. The growth rate remained stable at just over 30%. Online Gaming is again Cherry’s largest business area measured by turnover. High marketing costs have negatively impacted profit, but have also resulted in increased growth. Growth is a prerequisite for future profitability, as economies of scale with our current structure are significant.

In a trading update, Cherry said its launch of the sports club lottery “Klubblo” is on track for the first quarter of 2014.  The lottery will operate under Swedish regulation and lottery tickets will initially be sold through digital channels.

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