Growth and profitability rise at Cherry

The Cherry online and land gambling group has posted its Q1-2016 results, highlighting the following achievements:

* 86 percent growth in revenue at SEK 177.5 million and a positive EBITDA of SEK 25.6 million;

* Online contributes 78 percent (Q1-2015: 63 percent) of group revenue;

* Profitability improved with after tax profit at SEK 17.5 million (Q1-2015: -11.8 million);

* Online gaming revenues grew by 118 percent with EBITDA at SEK 16.5 million (Q1-2015: -5.7 million);

* Yggdrasil Gaming grew by 519 percent with EBITDA at SEK 7.9 million (Q1-2015: -0.4);

* Restaurant casino increased turnover by 10 percent and EBITDA to SEK 4.5 million (Q1-2015: SEK 3.9 million).

* In January, the acquisition of Moorgate Media Ltd, a Malta-based affiliate company was finalised;

* Yggdrasil Gaming awarded the licenses by the UK Gambling Commission in late December 2015 and is now live in the UK with its full product suite. The subsidiary has already signed agreements with six operators in the UK, Management reports;

* Group consolidated cash was SEK 61.5 million (Q1-2015: SEK 28.9 million) on 31 March;

* Active customers increased by a total of 234 percent compared to the first quarter of 2015.

Events occurring after the close of the quarter included:

* In April, Cherry signed an agreement to acquire 49 percent of the shares in ComeOn Malta Ltd. with an option to acquire the remaining 51 percent. ComeOn markets games under several well-established brands such as ComeOn.com, Mobilbet.com, CasinoStugan.com, folkeautomaten.com, Suomikasino.com, GetLucky.com and Kasyno.pl.

ComeOn’s sales in 2015 were close to Euro 80 million, an increase of about 60 percent compared to the previous year. The operating profit grew to approximately EUR 13 million, an increase close to 70 percent compared with the previous year. ComeOn expects to have sales of Euro 100-120 million, with an operating profit of Euro 19-23 million, in 2016. The acquisition is expected to complete in June this year.

Cherry CEO Fredrik Burvall said in a statement that the group continues to deliver according to its strategy, which combines organic growth with strategic acquisitions.

“Cherry’s online activities continue to grow very strongly,” he said, predicting that this side of the business is expected to grow faster than the market.

Burvall revealed that a listing on the Stockholm Nasdaq remains an important goal for the company in 2016, and said the firm is also strengthening its customer base in sports betting, with the prospect of enhanced revenues from the ComeOn acquisition.

He noted that the group is strongly positioned as the only private gaming company participating in the reference group for a new gaming legislation in Sweden. Together with Visita, Cherry has met with the special investigator, Håkan Hallstedt, during the quarter, where a proposal for a change of the present legislation was presented.

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