Cherry Group reports strong Q1-2018 performance

Sweden’s Cherry gambling group has reported strong growth and earnings in its Q1-2018 interim report, highlighting:

• Group revenue up by 26 percent to SEK 681 million (541), with organic revenue growth amounting to 25 percent (44);
• Profitability improved and EBITDA up by 131 percent to SEK 192 million (83) on a margin of 28 percent (15);
• Profit for the period amounted to SEK 89 million (36);
• Earnings per share before and after dilution amounted to SEK 0.96 (0.24) and SEK 0.96 (0.24);
• On 1 January 2018, ComeOn acquired Get Lucky Ltd;
• On 29 January 2018, Game Lounge acquired the website Slottracker.com;
* Online gambling business area’s revenue increased by 18 percent y-o-y, while earnings improved significantly, from SEK 57 million to SEK 143 million, an increase of 151 percent;

The report also covers events occurring after the reporting period, including:

• On 12 April, Game Lounge acquired the SEO specialist TodaysWeb;
• On 16 April, the owners of Cherry’s senior secured bond loan 2016/2020 of up to Euro 200 million, established the proposed Group internal restructuring schedule;
• On 25 April, Lahcene Merzoug was appointed new Managing Director of ComeOn;
• On 30 April, Cherry called on the option to acquire an additional 7.5 percent of the shares in Almor Holding Ltd, including the brands Sunnyplayer and Sunmaker. Following the acquisition, Cherry holds 90 percent of the shares in Almor.

CEO Anders Holmgren said the group looked forward to another eventful year.

“The first quarter of 2018 shows that Cherry’s business model yields good results,” he said. “Growth continued with increased profitability, and we see good prospects for 2018 becoming a good year for Cherry’s shareholders.

“There are ongoing efforts within Cherry’s business areas to launch several new products that we believe will create interest among existing customers. Equally important are the efforts several of the companies are making in new market segments.

“The online gambling business area’s revenue for the first quarter increased by 18 percent compared with the corresponding quarter in 2017, while earnings improved significantly, from SEK 57 million to SEK 143 million, an increase of 151 percent.

“All companies are developing well, and I particularly want to highlight the turnaround that ComeOn’s new management has accomplished in a short time, as well as Yggdrasil Gaming. The third company that is developing particularly strongly is Game Lounge, which has strong organic growth and has made some additional acquisitions, such as Slottracker.com and, in April, search engine specialist TodaysWeb.

“In the coming months, Highlight Games will launch its game, SOCCERBET, in Italy, which is one of Europe’s largest gaming markets. The game is a sportsbook based on a unique combination of filmed clips from European league football and can be played both online and in game stores, closely approximating the feeling of watching live football matches. We expect the game to reach both existing and new customer categories and to be introduced in additional countries.”

Looking ahead, Holmgren said that the gaming market is currently growing strongly and Cherry estimates that demand in the group’s largest geographic markets will continue to develop favourably.

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