Cherry Q1 revenues up 205% as acquisitions pay off
Company looks towards organic growth for 2017 as the integration of ComeOn nears completion
Cherry AB has reported a 205% year-on-year surge in Q1 revenues to SEK 541m (£47m), driven by strong growth in its five core business areas, particularly the recently consolidated igaming arm ComeOn.
Revenues for ComeOn soared 282% to SEK 453m (£39m) with an EBITDA increase of 375% to SEK 57m (£5m).
Mobile performed particularly well, accounting for 54% of online Gross Gaming Win.
Cherry CEO Anders Holmgren said the brand’s casino games were more tuned to mobile use, adding that sportsbook only made up 15% of their online business.
Cherry AB CEO Anders Holmgren
Holmgren said: “With a strong acquisition year behind us, the first quarter was mainly characterised by consolidation. At the same time, we grew as planned and with good profitability. Partnerships and synergies have enabled an even stronger focus on innovation, improved customer experience and continued growth.
“Cherry has broadened the Group’s business to cover the entire value chain within gaming. A strong organic growth and further acquisitions of entrepreneurial companies give us a unique platform to continue to create value. Overall, within Cherry we have the strengths and advantages that give us the opportunity to continue to grow faster than the market.”
Stripping out effects of its recent acquisitions, the group still saw impressive organic growth of 44%.
Holmgren said the group was in a position “to really grow organically” now that the main bulk of the ComeOn merger was behind them.
On costs, Holmgren said the group had “pushed for precision” in the brand’s marketing, while also trebling its budget.
“This has affected this quarter relatively negatively in terms of the higher cost, but we expect some dividend on this investment going forward,” he added.
Cherry’s overall personnel expenses soared 92 % to SEK 81m (£7m) following an influx of 310 new employees and physical expansion into new office spaces in Malta and Poland.
Gaming development arm Yggdrasil’s revenues increased 134% to SEK 33.3m (£2.9m), driven predominantly by new games launched, increased revenue from existing customers and more customers live.
Regulus Partners issued a positive note on the results, saying: “The extent to which Cherry will maintain this overall growth pattern will largely depend upon the timing and outcome of Swedish regulatory reform,(and/or its ability to successfully diversify), in our view.
“However, its future as a forward-thinking mobile-first content developer looks more assured, and potentially of increasing significance to the broader sector.”