Bingo! Stride Gaming sets its sights on further acquisitions after establishing a strong platform for growth

Courtney Goldsmith
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Stride Gaming is the fourth largest bingo operator in the UK (Source: Getty)

Stride Gaming has hit the jackpot with recent acquisitions and strong organic growth adding up to revenue growth in its year-end results. The group will look for further acquisitions in the new financial year.

The figures

The bingo group's net gaming revenue increased 22 per cent to £47.8m, while profit before tax fell to £131,000 from £360,000 in 2015.

Yield per player went up seven per cent to £120, reflecting improvements in engagement and player monetisation.

Read more: Jackpot for Stride Gaming as profits forecast to rise nearly two-thirds

Adjusted basic earnings per share increased eight per cent to 21.2p.

Stride Gaming acquired 8Ball, Netboost Media and the Tarco Assets in August, for £70.2m, which expanded the company's multi-branded offering by 96 brands to a total of 105.

Mobile is key for the industry as gross gaming revenue through mobile and touch devices represented 51.8 per cent of the group's total, compared with 40.4 per cent in 2015.

The number of funded players reached 71,220, an increase of 37 per cent year-on-year.

Why it's interesting

Following this year's acquisitions, Stride Gaming had a 10 per cent share of the UK bingo market, up from five per cent last year, to become the fourth largest online bingo operator in the UK.

The leading online gaming group now has "material scale, strong operations leverage and significant market share", giving it a strong platform of organic growth moving forward.

Read more: Stride Gaming investors hit bingo as firm declares first dividend

The group uses its own proprietary and purchased software. Chief executive Eitan Boyd said Stride Gaming aims to focus on its own content going forward, which cuts down on costs and increases yield per player.

"We believe that we have never been better placed to exploit the opportunities that exist in our market to deliver value to shareholders and we look to the future with excitement and confidence," Nigel Payne, a non-executive chairman said.

The company will continue to look for entry into other soft gaming verticals in the new financial year.

What Stride Gaming said

The company will "focus heavily" on successfully integrating its three new acquisitions early in the new financial year, Payne said.

Read more: Stride Gaming to raise £10m in market float

Boyd said the company will continue to look for further acquisition targets in the new financial year as the industry faces challenges in government regulation.

Mobile devices continue to shape the online gaming industry and operators constantly have to innovate to stay ahead of the curve. Increased regulation, tax and compliance costs will continue to squeeze margins on smaller businesses and present challenges for larger operators. However, it also presents significant opportunities for incumbent and established operators that have significant scale to exploit market opportunities.

Boyd said the "noise in the market" around government regulation will not have much impact on the group as the majority of its advertising spend is online, but will actually open opportunities for the company because of its scale, access to proprietary software and multi-branded strategy.

What others said

Stride Gaming continues to deliver impressive momentum into the new financial year, analysts from Canaccord Genuity said.

Trading is in line with expectations, and forecasts remain unchanged with a projected Ebitda of £20.2m driving earnings per share of 23.2p in the new financial year.

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