GameAccount to accelerate growth following strong 2013 performance

Shares in casino games developer GameAccount Network soared by more than 11 per cent in London this morning after the company recorded a 123 per cent increase in full year net revenue to £12.3m in its maiden results as a listed company.

GameAccount CEO Dermot Smurfit said it was a transformational year for the company, which saw it successfully raise £15m through an institutional placing last November and listed on the AIM and ESM markets of the London and Irish Stock Exchanges.

“We have made real progress in delivering on our strategic initiative to develop sustainable higher margin revenue streams while positioning the group for growth in regulating markets,” said Smurfit.

Net revenue for the year soared by 123 per cent to £12.3m, driven by new business from the regulated internet gaming market in the US and organic growth in Europe, particularly in Italy.

Full Year 2013 Results

“The strategy to diversify the group’s revenue base has started to pay off and during the year the group recorded its first significant Internet Gaming System sale and continued to increase B2B revenues from the development of online versions of machine-based slots game content,” said Smurfit.

Revenues from GameAccount’s B2B business soared by 191 per cent to £11.3m. Of this, £8.7m was generated from game and platform development, and £2.6m from revenue share and other revenue.
The company’s customer-facing operations, which include the Moneygaming.com brand, contributed just £1.0m in revenue, down 40 per cent year-on-year.

More than half of the company’s revenue was generated from its clients in Australia (57 per cent), followed by the UK and Channel Islands with 22 per cent, and the US with 11 per cent. Italy accounted for 8 per cent of the total.

The company confirmed that it had one customer which generated revenue greater than 10 per cent of its total during 2013. The customer generated £6.9m in revenue, representing 56 per cent of total revenue, all within the B2B segment.

GameAccount said that expansion in the US remains a “strategic priority” for the company following the establishment of a dedicated sales and infrastructure support office in Las Vegas, Nevada during the year.

The company entered into landmark agreements with both Betfair for regulated real-money gaming in New Jersey and with Foxwoods Casino Resort, America’s largest casino, for its Simulated Gaming product which enables land-based operators to move online in advance of regulation of real-money online gaming.

“We continue to invest significantly in recruitment to support increased product development and sales and marketing services capability in both the European and United States regulated markets,” said Smurfit.

GameAccount said that mobile casino gaming in particular represents a continued strong growth opportunity with gross income derived from mobile casino gaming growing substantially in 2013.

In Europe, the company continues to prepare for growth opportunities consequent to newly regulated online slots in Spain and is consolidating its position in Italy’s regulated market by delivering an expanding breadth of casino slots content to its major Italian operator partners.

During 2013, GameAccount completed the development of ten online casino games for its casino equipment manufacturer clients including Aristocrat, Incredible Technologies and Ainsworth Game Technology. This brings the company’s total games portfolio within the GameSTACK Internet gaming system to 135.

Total operating costs rose 66 per cent to £10.7m, with distribution costs up 31 per cent to £3.0m and administrative expenses up 86 per cent to £7.7m due to expenses incurred in connection with the admission to AIM and ESM markets and increased headcount to support continued investment in the company’s products.

GameAccount recorded an operating profit of £1.6m, compared to an operating loss of £0.9m the previous year, with profit for the year amounting to £1.1m, versus £0.1m in 2012.

Earlier this year in January, GameAccount delivered its Simulated Gaming product in the US for Foxwoods Resort Casino in Connecticut and secured new casino operator customers including Osage Casinos in Oklahoma and Empire City Casino in New York.

Smurfit said that the company remains “well placed” to deliver further growth in 2014 in its core European content distribution business with new game titles for Konami Gaming, Multimedia Games, Reel Time Gaming and Gamomat coming to market in 2014 in both desktop and mobile formats.

“We have a strong balance sheet with almost £17m in liquidity to accelerate our growth in 2014 and beyond,” he added.

As at December 31st the company held cash and cash equivalents of £16.9m compared to £1.7m in the prior year period.

Shareholders have so far reacted positively to the announcement, with shares in GameAccount Network plc (Co. Data) (AIM:GAME) soaring 11.65 per cent to 124.49 pence per share in London this morning following the announcement.