32Red results tell tale of POCT

32Red reported their 2015 financial results today. In a few key respects, the results tell a similar story to what we have seen from other publicly listed operators who have already released their annual reports:

• player numbers are up considerably; and
• gross gaming revenues are up considerably; and
• mobile growth is going gangbusters; and
• the year’s highlight included a successful merger; however…
• profit is down

Of course the underlying reason behind this familiar story is the UK’s point of consumption tax (“POCT”).

Aside from the fact that EBITDA fell from £5.4 million in 2014 to £5.2 million in 2015, all the results presentation graphics showed impressive growth.

Total net gaming was up a whopping 52% (some of which is attributable to the newly acquired Roxy Palace).

 

Growth in mobile was quite staggering.

There were big gains in the Italian market, and indeed all other regulated markets 32Red participates in, which now accounts of over 80% of total revenue.

Player numbers were up considerably, boosted by the addition of 230,000 registered players at Roxy but also by aggressive marketing during the year. Apparently 75% of men aged between 18 and 35 watched at least one 32Red advertisement during 2015.

But despite all this the bottom line result fell just short of 2014 (no graphic for the profit comparison).

The effects of the POCT are definitely being felt and were mentioned in Ed Ware’s CEO statement:

“2015 was a very exciting and indeed record-breaking year for 32Red, achieved despite significant external regulatory and tax headwinds.”