Cherry online revenues up triple digits despite integration issues
Operator reports integration taking “longer than expected” while marketing ROI also underwhelms
Cherry has reported a 241% jump in online revenues in Q2 to SEK437m (£42m), thanks largely to the acquisition of ComeOn in 2016.
Organic growth in the online division stood at 31%, but management admitted growth was behind their expectations with the integration of ComeOn taking “longer than expected”.
“Efforts to integrate the acquired ComeOn with other online gaming activities remained intense in the second quarter,” the firm said. “The rapid merger affected growth in the second quarter, and the integration has not yet had the expected positive effect on the Group’s revenue and earnings.
“We assess that the future of ComeOn! looks bright, but that integration will take a little longer than initially anticipated.”
Cherry also expressed disappointment in ROI from its marketing spend, which reached 40% of online GGR. “These initiatives have not had the expected effect,” the firm said.
Groupwide organic growth amounted to 37% in Q2 even as the operator acquired additional shares in ComeOn Malta and virtual sports game developer Highlight Games.
Game development arm Yggdrasil Gaming reported a Q2 revenue increase of 103%, amounting to MSEK 40.4 (£3.9m)
“We continue to be a profitable, fast-growing company, even if the integration of ComeOn has not yet reached full positive effect,” said CEO Anders Holmgren.
“By further diversifying and consolidating our operations, we strengthened our platform and thus the conditions for long-term leverage.”
Cherry shares claimed 2.5% to 1.10 SEK in early trading.