Profits down in MRG trading update

MRG, the parent group for the Mr Green online gambling assets reported in an H1-2018 trading update this week that it has failed to meet profit expectations despite increased revenues, with management explaining that cost of services and increased marketing spend impacted EBITDA but should be viewed as an investment.

Key performance indicators released by the company included:

Q2-2018

* Revenue up 43.4 percent at SEK 412,8 million (GBP 35.5 million);

* Organic growth of 31.1 percent;

* EBITDA of SEK 45.4 million – a 13 percednt decline;

H1-2018

* Revenue up 40.8 percent at SEK 793.8 million (GBP 563.9 million);

* EBITDA rose to SEK 45.4 million;

* Customer deposits grew by 64.3 percent.

CEO Per Norman reported:

“Profits did take a hit due to marketing expenditure increasing by more than 70 percent year-on-year in the first half of 2018, with earnings before interest and deductions over the six months falling from SEK 52.4 million to SEK 45.4 million.

“Higher marketing spend has affected EBITDA and there has been a strong focus on digital marketing, but we are very happy with the strong growth,” Norman said. “We increased marketing spend because of the strong market efficiency we were seeing, and the second (motivation) was of course due to the World Cup.

“We will focus more on cost control in the second half of the year, with marketing spend decreasing in relation to total revenue.”

“We have had another strong quarter,” Norman, advised, observing that growth had been particularly good in the Nordic region added. “We are confident we are very well prepared to deliver on our financial targets, short and long term.”

In H1-2018 Mr Green re-branded as MRG (see previous reports).

Related and similar