Mirroring industry-wide trends, Stockholm-listed Gaming Innovation Group (GIG) reports that Swedish home market adjustments continue to impact its corporate performance.
Publishing its Q3 2019 trading update (period ending 30 September), GiG records a 20% decline in corporate revenues to €30 million (Q32018: 37m).
Closing October trading, GiG governance issued a Q3 pro-forma guidance detailing that it had been forced to reduce 2019 performance estimates by 10%, citing ‘Swedish pains’ and ‘sluggishness in its B2B segment’, which is currently ‘off-boarding a large client’.
A breakdown of GiG verticals saw its B2C division record a 20% decline in revenues to €20 million (Q32018: €24m). However, GiG governance, details confidence in the division as its flagship Rizk brand delivered a peak EBITDA performance of €2.4 million (Q32018: €1.4m), maintaining strong growth in Central European markets and the Nordics (excluding Sweden).
As previously communicated, the loss of a key account has severely impacted GiG B2B performance, which saw revenues decline to €12 million (Q32018: €15.4m), with the division’s EBITDA dropping to €300,000 (Q32018: €3.7m).
Closing a trading quarter of tough operational adjustments, in which GiG reduced its employee headcount to 650 (former 700), the Stockholm enterprise posts a group EBITDA of €2.7 million (Q32018: €5m).
Concluding its update, GiG governance confirms that it has appointed ‘strategic advisors’ to review company strategy and identify new value-creating opportunities.
“For a while now the gaming industry has been in a bit of a storm, going through a period of structural change, not a structural decline,” said Petter Nylander, Chairman of the Board of GiG. “With increased regulation and taxation putting pressure on margins, it is time to adapt to the new reality in order to steer out of the epicentre.
“I am confident that we are making the necessary strategic adjustments to ensure the full potential of Gaming Innovation Group and shareholder value creation.”
In addition to publishing Q3 trading, this morning GiG governance confirmed the appointment of Richard Brown as company Chief Executive. Brown has served as acting CEO since 5 September following the abrupt departure of former incumbent Robin Reed.
Brown commented: “I am delighted to accept the position of CEO for Gaming Innovation Group, having worked here for the past four years I see a massive potential for the Company. While industry headwinds may have dampened progress in 2019, I am extremely excited about the future potential of the group and this new phase of the Company’s life cycle. My focus will be on delivery, execution and optimisation, putting us on a path for great focus and renewed growth.”