Gaming Realms Regulatory News (GMR)

Gaming Realms plc

(the "Company" or the "Group")

Interim results for the six months ending 30 September 2014

Focus has been on acquiring affiliate and player data, building a market leading 'cross platform' technology base and licensing unique formats such as Slingo

Gaming Realms, which creates, publishes and markets next generation online gaming products, today announces its interim results for the six months ending 30 September 2014.

Financial highlights

§ Revenue up 421% to £4.6 million (H2/13: £0.9 million)

§ Loss before taxation of £3.1 million which includes marketing spend of £3.6 million, costs for the Alderney Licence,

and those related to the acquisition of Blueburra Holdings, as well as continued costs associated with building the

Group's new gaming platform, in line with the Group's strategy

§ Strong balance sheet with £3.8 million cash and cash equivalents (H1/14: £1.8 million)

Operational highlights

§ Daily active players up 14% to 5,205 (H1/14: 4,576)

§ Acquisition of Blueburra Holdings Limited for approximately £10.5 million to increase affiliate size and bingo database

§ Obtained licenses from the Alderney Gambling Control Commission and the UK Gambling Commission

§ Delivery of new in-house scalable platform with the launch of Spin Genie brand which includes a feature set to

enhance conversion, retention and monetisation of real money gambling players

§ Exclusive UK Licence agreed with RealNetworks for the provision of Slingo, (one of the world's most popular bingo

formats) for use on our real money gambling platform. Strong cross-selling opportunities for slots players via social

gaming which had 50 million monthly active users at its peak

Commenting on the results, Chief Executive, Patrick Southon, said:

"We are pleased to report the completion and launch of our platform which is showing good initial growth. We believe the acquisitions of QuickThink Media and Blueburra Holdings, coupled with the monetisation ability of our exciting new 'feature led' gambling platform, will enable us to grow revenues even more quickly in 2015."

Outlook

The Board remains confident that the Group is well positioned to maintain its strong growth trajectory and continued player acquisition. The strategy remains to engage users on new mobile devices through a soft gaming proposition, while maintaining its focus on reducing CPA.

The Group is now better placed to deliver a more 'tailored' and unique experience for players with development in its analytics and player behaviour tools. The Group expects to see improved retention and player values through this focus.

The launch of Spin Genie, delivery of the proprietary platform; and exciting licence deals such as Slingo, gives the Board confidence there are significant market opportunities ahead to achieve further progress in 2015 and beyond.

- Ends -

This document contains forward looking statements, which are based on the Company's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables which could cause actual results or trends to differ materially. Each forward looking statement speaks only as of the date of this announcement. Except as required by the AIM Rules, the London Stock Exchange or otherwise by law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

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About Gaming Realms

Gaming Realms is an online gaming business formed in 2012 to develop a new generation of social bingo and slot machine gaming concepts.

Gaming Realms was founded by the team behind Cashcade, which created the leading online bingo brand, Foxy Bingo, in addition to other online bingo and casino games. The success of Cashcade culminated in its sale to bwin.party digital entertainment plc for a total consideration of approximately £96 million in 2009.

Business review

Summary of financial and operational activity

The Board is pleased to report that the Group has continued to make good progress during the second half of its financial period. During the six month period, the Group delivered revenues of £4.6 million, up 29% over the previous six month period. At the same time the Group has reduced its marketing investment by 30% to focus on the development and investment in its new platform. Total marketing spend was £3.6 million which combined with operating costs resulted in a loss before taxation of £3.1 million, consistent with the Group's operating plan.

The number of average daily depositing players rose 14% to 5,205 during the period (H1/14: 4,576). The new depositing players acquired was 38,656 (H1/14: 76,465). This reflects a refocusing of group efforts to retention and acquisition in better performing verticals which can be carried forward in to 2015 and a reduction in marketing spend for the period.

In September 2014, the Group acquired Blueburra Holdings Limited ("BBH") for approximately £10.5 million to help facilitate its strategy of acquiring affiliate data and generating revenue on its products. The Board are confident that this acquisition will be successfully integrated into the Group before the end of the 2014 and will generate positive cash flow and a large consumer database for future growth.

The Group has been working to mitigate the effects of Point Of Consumption tax by developing its own proprietary platform to aid efficiencies as well as building features to aid retention. Utilising QTM and the affiliate data in BBH will enable the Group to acquire players at a lower cost.

White Label

Since the acquisition of BBH, the Group has expanded its existing White Label business with Diva Bingo, Butterfly Bingo, and Total Gold. The Group also plans to launch two more gaming brands in Q1 2015.

Revenue through the White Label Business decreased 6% during the period to £1.6 million (H1/14: £1.7 million) as a result of refocus of efforts and marketing budgets on the Group's own platform and products as stated in the strategy above.

Proprietary platform

Gaming Realms launched its new platform through its subsidiary Bear Group Limited, licenced by Alderney Gambling Control Commission and, more recently the UK Gambling Commission, in September 2014. This will enable the Group to fulfil on its strategy of delivering unique content to the real money gambling market. It will also bring enhanced cash flow, running at more efficient margins, thereby offsetting the effect of the introduction of Point Of Consumption tax.

The first brand to have launched on this platform, Spin Genie, has shown very promising results with low cost of acquisition and good initial player values and retention.

In furtherance of our stated strategy to launch new gambling formats, the Group has agreed an exclusive licensing deal for the UK for Slingo, which will be used as a real money gambling product on Spin Genie. Slingo is a Vegas-derived bingo game which was successfully grown by Zynga into a player base of 50 million monthly users.

Pocket Fruity has continued to deliver a strong performance during the period, supported by the further development of the product, licensing slots and table games from Realistic Games, which has led to a 141% increase in active daily players funding their accounts and a 45% increase in NGR. The Group is continuing with the migration of Pocket Fruity onto its new proprietary platform, which will be delivered early in the New Year. This move is expected to enable greater scaling of the product whilst simultaneously increasing profit margins.

Staff

A significant focus for the Group has been ensuring the business has the right levels of skilled employees to deliver its strategy. During the period the headcount grew from 58 to 89 as the Group grew organically and through acquisitions. These additional employees have contributed to the Group's upgraded skillset, delivering a step-change in corporate capabilities. The Group now has a highly experienced and skilled software development team which will further develop and maintain its platform and new gambling formats. Allied to the Group's own in-house behavioural science tools, the Group is able to gain a unique insight and analysis of its players, which helps to drive CRM efforts and development for new and existing customers.

Consolidated statement of profit or loss and other comprehensive income

for the 6 months ended 30 September 2014

Consolidated statement of financial position

As at 30 September 2014

Consolidated statement of cash flows

for the 6 months ended 30 September 2014

Consolidated statement of changes in equity

For the 6 months ended 30 September 2014

Notes forming part of the consolidated financial statements

For the 6 months ended 30 September 2014

1. Accounting policies

General Information

Gaming Realms plc ("the Company") and its subsidiaries (together "the Group").

The Company is admitted to trading on AIM of the London Stock Exchange. It is incorporated and domiciled in the UK. The address of its registered office is One Valentine Place, London SE18QH.

The results are unaudited to 6 months ended 30 September 2014. The comparative period, 6 months ended 30 September 2013 is extracted from the audited annual financial statements.

Basis of preparation

The financial information for the period ended 30 September 2014 does not constitute the full statutory accounts for that period. The comparative period, 6 months ended 30 September 2013 which has neither been audited nor reviewed by independent auditors, is extracted from the Annual Report and Financial Statements for 2013 filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2013 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

This interim report, which has neither been audited nor reviewed by independent auditors, was approved by the board of directors on 3 December 2014. The financial information in this interim report has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the period ended 30 September 2013 and which will form the basis of the 2014 financial statements. A number of new and amended standards have become effective for periods beginning on 1 October 2013, however none of these are expected to materially affect the Group.

The consolidated financial statements are presented in sterling.

The risks and uncertainties and significant estimates and judgements faced by the Group have not changed significantly since the 2013 Annual Report was published and are not expected to change significantly during the remaining six months of the financial year.

2. Segment information

The Board is the Group's chief operating decision-maker. Management has determined the operating segments based on the information reviewed by the Board for the purposes of allocating resources and assessing performance. The Group has three reportable segments, being social gaming, real money gaming and marketing services. Each segment represents different brands, products and services provided. The social gaming segment operate the brands 5 Star Slot, AvaTingo and Sh*tHEAD and provide freemium gaming services to the US and Europe. The real money gaming segment operates the PocketFruity and Spin Genie brands in the UK. The marketing services segment represents the services provided to market the white label products. The marketing services segment also includes other online marketing services provided to other bingo and casino operators and other marketing services.

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.

The Board evaluates performance on the basis of segment loss. This measurement basis excludes head office costs not derived from operations of any segment and are only disclosed in total.

Reportable segment information

The Group has reportable segments as follows:

§ Real money gaming

§ Social gaming

§ Marketing services

Reconciliation of reportable segments to Group totals:

Geographical information

The Group considers that its primary geographic regions are UK, including Channel Islands and Gibraltar, USA and the Rest of World. No revenue is derived from real money gaming in the USA. Revenues from customers outside the UK (including Channel Islands and Gibraltar) and USA are not considered sufficiently significant to warrant separate reporting. Marketing services revenues primarily relates to end users located in the UK and have been included in UK on that basis. All non-current assets are based in the UK.

The Group's performance can be reviewed by considering the geographical locations within which all assets in the Group operates. This information is outlined below: