£4.8m point of consumption bill blunts 32Red’s record growth

32red-edwareGaming operator 32Red has posted a record revenue performance for 2015 with a 52% increase in net gaming revenues for the year – however its figures have been blunted by a £4.8m point of consumption tax bill.

The firm saw 35% increase in its core 32Red revenues to £41.7m, a 54% jump in its Italian business to £1.7m and a half year contribution of £5.2m from the acquired Roxy Palace operation. Despite this great revenue growth, EBITDA profits for the year dropped slightly from £5.4m to £5.2m. Operating profits before exceptional items more than halved though, from £3.5m in 2014 to £1.6m last year. Profit after tax dipped below £1m to £964,000 – a 70% fall from 2014.

For from bemoaning the introduction of the tax though, 32Red CEO Ed Ware saw it as an opportunity. He explained: “Smaller operators have withdrawn from the UK market and with some larger operators choosing to reduce their marketing expenditure, 32Red identified an opportunity to leverage its strong, established brand and grow its UK market share by accelerating marketing investment.

“This strategy resulted in a 35% organic growth in revenues, with growth accelerating during the year and H2 net gaming revenues for the core business up 34% on H1. Furthermore, I am pleased to report that this momentum has so far carried forward into 2016.”

The firm said that overall its sports betting revenues continue to grow but that focus remains centred on cross-selling the casino products to new sportsbook players.

Ware added: “2015 was a very exciting and indeed record-breaking year for 32Red, achieved despite significant external regulatory and tax headwinds. These results are an excellent demonstration of 32Red’s core strengths – a talented and dedicated team, first class ROI-driven marketing skills and established, highly appealing online gaming brands.

“The acquisition of the Roxy Palace business in July complements the strong organic growth delivered in the core business as we exploited targeted marketing opportunities and attracted new customers to the 32Red brand. Marketing expenditure will be increased again in 2016 we are well positioned for another year of progress, building on the excellent achievements in 2015.”

Trading during 2016 to date has been very strong across the Group’s portfolio with like-for-like net gaming revenues for the first nine weeks of the year up 35% on the same period in 2015 and up 66% including the contribution from Roxy Palace.

The firm added: “The Board remains committed to delivering strong growth, both organically and via acquisitions and, as the landscape continues to evolve, we remain encouraged by regulatory developments in new European markets. 32Red remains very well positioned to capture growth opportunities in the online gaming market and build on the excellent progress made in 2015.”

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