GAN Releases CY2016 Annual Results
30 May 2017 - 4:05PM
Business Wire
GAN plc (“GAN” or the “Group”), a leading B2B supplier of
Internet gaming enterprise software-as-a-service solutions to the
US land-based casino Industry, announces results for the twelve
months ended December 31, 2016.
The full Chairman’s Report and Financial and Operational Review
are available on GAN’s website at www.gan.com.
Financial Overview
- Net Revenue of £7.8m (2015: £6.0m) an
increase of 30% on 2015.
- Clean EBITDA1 loss of £0.9m (2015:
£3.0m) a reduction of 70% on 2015.
- Loss before tax of £5.2m (2015: £5.6m)
and loss per share of £0.06 (2015: £0.09)
- Loss after tax of £3.8m (2015:
£5.0m)
- Cash and cash equivalents at the end of
the year of £3.2m (2015: £3.8m)
- Net Assets at the end of the year of
£10.9m (2015: £10.2m)
- Raised Gross Proceeds of £4.4m in 2016
from share placings and an additional £2m in April 2017 through an
unsecured 9% convertible loan note positioning the Group for
further growth
Strategic & Operating Developments
- Launched Simulated Gaming™ in the US
for three (3) new US casino clients (2015: 4)
- Signed five (5) new US casino clients
for Simulated Gaming™ (2015: 5)
- Continued delivery of Betfair’s
fast-growing New Jersey Internet casino business BetfairCasino.com
supported by GAN’s Internet gaming platform, content &
supporting services. The New Jersey Internet gaming market grew
gross gaming revenues by 32% to $197m in 2016
- Post period end signed one (1) further
client of both Simulated Gaming and real money Regulated Gaming in
the US, bringing total to thirteen (13) US casino operator clients
representing seventy-five (75) casino properties coast to
coast
- GAN’s Simulated Gaming™ clients
together generate $9bn (13%) of the land-based US casino Industry's
annual gaming revenues of $68bn2
- Continued investment in US
infrastructure: licensing, offices and people
- Post period end launched four (4) new
client operators of Simulated Gaming™ bringing to thirteen (13) the
total number of US casinos operating Simulated Gaming™ online in
reliance on GAN
- Post period end launch of a selection
of IGT casino slot and video poker games for Simulated Gaming™ now
available for end user players of Parx Casino’s Simulated Gaming™
website ParxOnline.com, mobile iOS app and mobile Android app
(search ‘Parx Casino’ in app stores)
- Post period end award of a full Casino
Service Industry Enterprise in New Jersey, issued by the New Jersey
Division of Gaming Enforcement following a multi-year licensing
process
- Post period end an amended version of
HB 271 was passed by the Pennsylvanian Senate on May 24, 2017 which
may lead to Pennsylvania being the fourth US state to regulate
after a three (3) year hiatus on regulation of real money Regulated
Gaming. GAN is already providing Simulated Gaming™ to Parx Casino,
Pennsylvania’s largest casino, and is contracted to provide real
money Internet gaming services should regulation occur.
Dermot Smurfit, CEO of GAN commented:
“2016 has continued the period of investment for GAN, and,
performance to-date in 2017 is in line with our expectations.
GAN has continued to position its business to capture growth in
emerging online gaming markets in the US. 2016 saw significant
progress with Simulated Gaming™, together with a number of
significant commercial and strategic developments.
Real-money Internet gaming in New Jersey and the pace of
regulation in the US market has remained slower than expected
although growth in New Jersey out-performed our full year
expectations with gross gaming revenues up 32% year on year to
$197m. We are confident in the long-term prospects for real-money
gaming.
For 2017 we believe that the opportunity for GAN with Simulated
Gaming™ will more than adequately compensate for the delays in
regulating real-money Internet gaming in the US which also
positions GAN to serve existing clients of Simulated Gaming with
real money Regulated Gaming in the event their casino properties’
host State does regulate.
The State of Pennsylvania appears to be in the process of
regulating Internet gaming with a number of legislative bills
actively considered in 2016, of which derivative bills have been
the subjects of legislative action in 2017 with the latest bill
regulating real money Internet gaming being approved by the
Pennsylvanian Senate just last week. GAN has been selected as the
exclusive platform for both Simulated Gaming™ and regulated
real-money Internet gaming by Parx Casino, the leading casino
operator in Pennsylvania, and is positioned for substantial growth
in regulated real-money gaming should suitable legislation be
enacted in 2017.
Throughout 2016 GAN’s Simulated Gaming™ enterprise solution
continued to prove its ability to support the core on-property
gaming business of US casino clients, lending impetus to new client
signings. GAN’s increasing body of evidence demonstrated that
Simulated Gaming™ together with GAN’s US-patented reward points
integration system is a highly cost effective marketing tool for
land-based casinos, which supports on-property gaming rather than
cannibalizing. The combination of GAN’s compelling Internet
gaming-as-entertainment experience and GAN’s US-patented ability to
integrate with land-based loyalty programs works to reactivate
long-term lapsed patrons on-property, increase on-property
visitation by existing patrons and generate incremental income
online for GAN and the casino clients whilst also increasing
land-based gaming revenues.
Simulated Gaming™ continues to represents a US market
opportunity estimated at $250m in 2017 which is immediately
addressable and not contingent on the pace of regulation nor
dependent on US casino clients’ making material investment in
digital user acquisition as the majority of Simulated Gaming™
revenues are derived from the casino clients’ existing patrons.
In 2016, the majority of GAN’s US casino clients commenced
marketing strategies to bring both existing and new patrons online,
principally in the later months of the year. As this happens, GAN’s
US casino clients typically rely heavily on our team of marketing
specialists. Marketing Services provided to US casino clients
represents a significant opportunity for GAN not only to increase
professional service fees but also to support casino clients in
scaling their Simulated Gaming™ business online in the regions
where their land-based gaming brands are recognized. Supported by
GAN’s Marketing Services Team, GAN’s US casino operator clients
also have the opportunity to significantly increase digital user
acquisition in order to secure a share of the $2.5bn US Social
Casino market as well as serve their existing patrons.
In 2016 GAN signed contracts with some of the largest
multi-property US casino operators in the market including JACK
Entertainment, Chickasaw Nation and Station Casinos each with
annual land-based gaming revenues in excess of $1bn. As GAN’s
product offering, marketing and CRM strategies matured, performance
metrics for Simulated Gaming ™ have made steady progress and the
prospects for this business are very encouraging.
Our investment in the business continues and we have grown our
team and expanded our technical expertise, US infrastructure and
gaming content portfolio throughout 2016. Consistent with earlier
statements, the US patent awarded to GAN in September 2015 has
served to provide material benefit to the Simulated Gaming™
business as we grew in the US market in 2016.
We remain confident in our prospects for 2017 and beyond. For
2017, we forecast material growth of Simulated Gaming™ from the
launches of TEN Atlantic City in New Jersey, Oneida Nation’s
Turning Stone Casino in the State of New York, the Chickasaw
Nation’s WinStar World Casino in Oklahoma, Station Casinos in
Nevada and MGM Resorts’ The Borgata in New Jersey. We also recently
completed GAN’s first debt capital raise as a publicly-traded
company with gross proceeds of £2m which will prepare the Company
for Regulated Gaming in Pennsylvania and support the commencement
of a US patent licensing program in 2017 which may represent a new
source of patent licensing revenues for GAN.
We believe our Company has achieved critical mass in the US
market with 13 major US casinos as clients of Simulated Gaming™
each of which has licensed GAN’s Internet gaming system and our US
patent and that the Company is well-positioned to secure additional
profitable opportunities from incremental US States which regulated
real money Internet gaming over time.”
Notes
1. Clean EBITDA is a non-GAAP company specific measure and
excludes interest, tax, depreciation, amortisation, share-based
payment expense and other items, which the directors consider to be
non-recurring and one time in nature.
2. The US land-based casino gaming Industry generated $67.6bn in
total US casino gaming revenues in calendar year 2015 of which
$29.3bn was derived from 459 Native American-owned casino
properties growing at 3.1% annually and $38.3bn from 580
commercially-owned casino properties located in 24 States and
growing at 2.3% annually (source: RubinBrown LLP, March 2016).
Note regarding forward-looking statements
This announcement includes forward-looking statements, including
statements concerning current expectations about future financial
performance and economic and market conditions which GAN believes
are reasonable. However, these statements are neither promises nor
guarantees, but are subject to risks and uncertainties that could
cause actual results to differ materially from those
anticipated.
Results Conference Call
The GAN management team will host a conference call for analysts
& institutional investors at 11.00 ET / 08:00 PT (16.00 BST) on
May 30, 2017 the timing of which reflects the significantly
increased holdings of GAN’s publicly traded equity by US-based
institutional investors. Those wishing to dial in should contact
The Equity Group on the details below:
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170529005323/en/
GANDermot SmurfitChief Executive Officer+44 (0) 20 7292
6262dsmurfit@GAN.comorDesmond GlassChief Financial Officer+44 (0)
20 7292 6272dglass@GAN.comorDavy (Nominated Adviser, ESM
Adviser and Joint Broker)John Frain / Barry Murphy+353 1 679
6363orLiberum (Joint Broker)Neil Patel / Cameron Duncan+44
(0) 20 3100 2000orThe Equity GroupAdam Prior / Kyle King+1
212 371 8660aprior@equityny.com / kking@equityny.com
GAN (NASDAQ:GAN)
Historical Stock Chart
From Apr 2024 to May 2024
GAN (NASDAQ:GAN)
Historical Stock Chart
From May 2023 to May 2024