Cherry FY2014 delivers strong revenue growth

Swedish gaming group Cherry reported record turnover across all business areas during its fourth quarter but a net loss affected by a change of executive directorship and its lottery product Klubblo.

Online gaming was a star performer delivering a 60 percent growth

Key performance highlights for the 4th quarter ending December 31, 2014 include:

Group revenue increase of 33 percent amounting to SEK 100.2 million (Q4/2013 SEK 75 million).
EBITDA amounting to SEK -6.5 million (Q4/2013: SEK-10.7 million).
EBIT amounted to SEK -10.6 million  (Q4/2013: SEK -11.9 million), affected by a non-recurring cost of SEK -4.0 million related to change of chief executive officer.
The result after tax amounted to SEK -15.3 million (Q4/2013: SEK -10.6 million) equivalent to SEK -1.13 (Q4/2013: -0.80) per share after dilution.
Net financial items and result from associated companies was affected by an impairment of assets and shares related to Klubblo with SEK -7.7 million (0.0).
Online Gaming in the 4th quarter grew by 60 percent and deposits increased by 56 percent.
Restaurant Casino increased turnover by 7 percent and EBITDA amounted to SEK 5.0 million (Q4/2013: SEK 5.2 million.
Group cash amounted to SEK 54.3 million (Q4/2013: SEK 68.4 million) at the end of the period.

Key performance highlights for FY2014 ending December 31, 2014 include:

Group revenue increased by 28 percent and amounted to SEK 340.0 million (FY/2013: SEK 266.3 million).
EBITDA amounted to SEK -17.9 million (FY/2013: SEK-24.0 million).
EBIT amounted to SEK -32.9 million (FY/2013: SEK -33.9 million).
The result after tax amounted to SEK -39.3 million (FY/2013: SEK -33.7 million) equivalent to SEK -2.97 (-2.51) per share after dilution.  Affected by change of CEO and Klubblo.
Restaurant Casino increased turnover by 7 percent and EBITDA amounted to SEK 17.1 million (FY/2013: SEK 16.0 million).
Online Gaming grew by 44 percent and deposits increased by 50 percent.

Gaming developer Yggdrasil went from strength to strength launching six operators during the 4th quarter and signing 18 new deals over the year.

Cherry’s sports lottery Klubblo will be phased out following an enforcement change that has made it impossible for the offer to cooperate with sports associations due to various exclusivity agreements with Svenska Spel.

Cherry again called for a modernized legislation, its chief executive officer Fredrik Burvall saying one “which allows us to operate under greater social responsibility and compete on equal terms.”

Looking ahead, Cherry said its majority share acquisition of affiliate business Game Lounge Ltd in January 2015 is expected to enable the group to rapidly increase volumes in existing brands and through future white label brands by increasing the number of customers at a significantly lower cost than before.

“We believe that this 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.

Focusing on expansion, Cherry said its largest shareholder, Morten Klein, has been working in close collaboration with its online business based in Malta since December 2014 focusing on business development and partnerships.

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