Cherry group Q2 and H1-2017 report out

Cherry Group has posted strong Q2 and H1-2017 numbers, emphasising strong growth in earnings and revenues and highlighting:

Q2-2017

* Group revenue up 179 percent year-on-year to SEK 536 million (192), with organic revenue growth amounting to 37 percent;
* Profitability improved and EBITDA increased by 524 percent to SEK 93 million (15) on margin of 17.3 percent (7.7);
* Profit of SEK 15 million (8);
* The acquisition of the remaining 51 percent of ComeOn Malta Ltd was completed and additional secured bonds of nominal Euro 134.5 million were issued;
* 25 percent of the gaming technology company, Highlight Games Ltd was acquired, with an option to acquire a further 26 percent. The purchase price for Cherry’s initial 25 percent stake was SEK 27 million.

H1-2017

* Group revenue increased by 192 percent year-on-year to SEK 1,077 million (369), with organic revenue growth amounting to 40 npercent;
* EBITDA up 334 percent to SEK 176 million (40) on margin of 16.3 percent (11.0);
* Profit for the period amounted to SEK 51 million (26).

Events following the reporting period:

* On July 3, a share split 1:5 was conducted, regardless of series;
* On August 17, Cherry revised its full-year forecast and now expects the Group to generate total revenue of about SEK 2,500 million in 2017, with EBITDA of about SEK 480 million;

CEO Anders Holmgren commented:

“We continue to be a profitable, fast-growing company, even if the integration of ComeOn! has not yet reached full positive effect. By further diversifying and consolidating our operations, we strengthened our platform and thus the conditions for long-term leverage.

“Game development and Performance-based marketing are the stand-out performers, but Online gaming has not quite been delivering in line with our plan.

“However, the Online gaming business continued to develop positively. Revenue grew by 241 percent to SEK 437 million, with organic growth of 31 percent. EBITDA improved from SEK 5 million to SEK 62 million compared with the same quarter last year and the EBITDA margin increased from 4 percent to 14 percent.

“The rapid merging of ComeOn!’s activities has led to a strong focus on integration, affecting growth. It is worth mentioning that marketing efforts have not yet had the expected effect. At the same time, there is a high level of activity with a variety of initiatives that strengthen both the business area’s organization and the offering as a whole.

“We assess that the future of ComeOn! looks bright, but that integration will take a little longer than initially anticipated.

“Yggdrasil Gaming had a very strong second quarter and revenue increased by 103 percent to SEK 40 million with an EBITDA margin of 44 percent. A number of new important licensing agreements were concluded and more innovative games were launched. During the quarter, Yggdrasil also went live with their games in the Italian regulated market.

“In summary, the second quarter confirmed a continued positive trend for Cherry, and the development has been strong throughout the opening period of the third quarter.”

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