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Hi Taser, GMR does indeed have a largely fixed cost base. We don't have to buy stuff and process it and then sell it - all we do is produce games and then license them. We do produce other games apart from Slingo but Slingo is becoming almost a genre in itself.
So wages is one of our main costs - not raw materials. Our head count is increasing but not excessively. We will see steady revenue and profit growth as we extend into new states in the US and other Countries. We also link with new parties in existing territories.
What the increasing revenues and profits will do the SP we will see in due course. But this company has a massive future ability to generate cash. Dividends may well be a main future attraction for investors here.
Thanks for your comments.
The change in EBITDA margins from prior year are minimal. I was expecting something a little more significant with the signing of new contracts and operations in new territories. Maybe it is not going straight to the bottom line. It will be interesting to see their next financials.
I didn’t say Slingo was a risk I said there is a risk of being so reliant on it. The way to stay ahead in this sector is innovation, customer engagement and retention. Slingo is the company’s headliner but we need to keep one step ahead in terms of development, which I think they are aware of.
They do regularly mention the benefit of their current strategy being that new contracts add to the bottom line while costs remain fixed. EBITA growing faster than revenue with a 40% margin.
"Total revenue grew 10% from £7.7m in H1'21 to £8.5m in H1'22. Group EBITDA grew 12% to £3.5m2 (H1'21: £3.1m), representing a 41% EBITDA margin (H1'21: 40%)." -interim report
The market rates GMR at a 40+ p/e which I wouldn't say is cheap, but with profit before tax increasing 60% YoY in H1 it's justified. The growth will come from the US market, with 55% of revenue already coming from the US and only a handful of states currently regulated.
As for slingo being a risk I can't see how. Slingo is proving to be very popular with casino operators and is seen as premium content, meaning GMR can charge a higher commission than other slots providers. Without slingo we're just a run of the mill slots company and the 40 P/E starts looking very punchy
The article does a good job of highlighting a benefit of how the board have handled slingo from the start. By working with the big slots companies instead of against them they have been able to release some huge titles. Starburst, Rainbow riches, fluffy favorites'. These are all massive slots titles and to have a slingo version is a pretty big deal. Without slingo, if we were just a slots company with 60 or so well performing games, I can't see NetEnt agreeing to us to make a gaming realms version of their most successful slot game ever (starburst).
Not to mention the media brand partnerships which they have very well from the start. Shark week, deal or no deal, xfactor, Britain's got talent, etc. Which obviously comes from the founders history of launching foxy bingo.
It is all very well posting these frothy articles and contract news but how does that convert to the PnL? This share has been bumping along short term lows when others received a bump up on a mini rally a few weeks back.
There seems little from the company itself and whilst they cannot reveal their margins they could indicate that each contract enhances the bottom line as fixed costs make up a large percentage of company costs.
My worry is the margins are under pressure or too minimal to lead to a rerate. I like the business and the potential, although the reliance on slingo may be seen as a Risk, it seems unable to get the market’s attention
A very nice read and a good out look for 2023! I’ve only been in here 2 years but I’m excited for the Future of this one.
Sorry for not replying sooner, thank you and much appreciated.
https://casinobeats.com/2022/12/05/gaming-realms-gareth-scott/
Worth a read
3.5 million loan , 500,000 converted into shares at 20% discount to share price , outstanding 3 million to be repaid this December or converted into shares at discounted price
Hi BasicTrader97 here is the original RNS, hope it helps.
http://otp.investis.com/clients/uk/gaming_realms/rns/regulatory-story.aspx?cid=637&newsid=958589
Can anyone point me in the right direction for the loan repayment due end of 2022 to gamsey (I think)
Or am I just making this up? I’m sure I recall them turning some of the loan info shares?
On 7 trades
Premium
US iGaming revenue tops $450m in October
Regulated iGaming gross revenue in the United States reached $450m in October, marking a new monthly high and taking gross revenue for the year-to-date above $4bn. Read More
"Here is the number of games in the top 25 by manufacturer representation: Light & Wonder, seven games; Everi, five games; Evolution, three games; Inspired, Gaming Realms and High 5 Games, two games each; Design Works Gaming, IGT, AGS and Ainsworth, one game each."
https://www.topuscasinos.com/news/ranking-the-top-performing-mobile-slots-this-month
The numbers are going to be impressive I think. I've just revisited the interim results and comment on a couple of figures. The first half profit is greater than last year's full profit figure. Last half year we launched with 11 new partners - this half year we launched with 26. The SP is going to rise.
Only a couple of months to a trading update - wonder what the company will do with the profits? Debt reduction, dividend, bit of both? Interesting times ahead.
They were asked on the last investor call about the potential to squeeze more out of margin as their games became more popular and without getting into specifics they claimed they were considered "premium content" and so already charged a high margin compared with other game providers.
I'm guessing margins are commercially sensitive but take heart from the fact that a revenue increase last year of 3.27 Mill translated into a bottom line improvement of 2.89 Mill. Contracts and revenue are all important at this stage. They do comment on increases in game development - can't quite see what else there is report. Difficult to see how we can slip back to losses now.
Lots of info on contracts coming through but what operating margins are being achieved? Seems to be drifting on little news in the public domain
Https://lnkd.in/gZupWSF9?trk=organization_guest_main-feed-card-text
Sneek Preview of 4ThePlayer’s games to be released on GMR USA platform
I think 4ThePlayer would make a excellent bolt on acquisition
Also slingo upcoming games
Https://m.youtube.com/watch?v=8xXB_AhKIVU
We’re continuing our expansion in The Netherlands, and hoping to deliver a whole new gaming experience to our Dutch players! Our Slingo content is now available to play with Betnation through our partners at Bragg Ljubljana (formerly known as ORYX Gaming), a Bragg Gaming Group company. Thanks to Barbara Remih, Urban Bonca, Robert Tololioe Schouten, Mouhcine Jalili for your work on this launch - we’re thrilled to see the The Netherlands is becoming one of our top markets!
Source linkedin
https://casinobeats.com/2022/10/25/light-wonder-dwg-eilers-fantini/
Worth a read
Good RNS - the share price will catch up.
Yep, not loved at the moment. 15% down sitting and waiting.
But dead in the water
whats goin on ffs
Hi redjester, I'm afraid todays investors are sitting on their hands - as the Auction Houses used to say! Once the full year's figures are released the obvious high percentage of profit growth compared to revenue growth will become apparent. there is of course the ' stigma' of being a gambling stock which may reduce the MC but not the eventual divi's. This could become a high cash generator anyway as there's not a lot of debt and plenty of losses to offset tax on profits.
Interesting times ahead methinks.