Online activity sees WMS revenues soar
Chairman and CEO Brian Gamache predicts annual revenue from interactive to reach at least $35m in fiscal 2013.
A US$9m year-on-year growth in revenue from interactive products and services has seen WMS Industries record first quarter turnover of US$159.1m.
In its first set of results since making two online acquisitions earlier this year, WMS Brian Gamache chairman and CEO said the company was generating “very exciting” growth from interactive products.
Its online products and services revenue, that now sits within a separate division entitled William Interactive, increased to $9.5m for its fiscal first quarter of 2013 from $0.7m in the same period in 2012, primarily reflecting the launch of Jackpot Party social casino on Facebook in July this year.
Organic growth in WMS’s UK-based B2C online website and the addition of the newly-acquired Phantom EFX and Jadestone businesses were also cited as major contributors to the boost in revenues.
“We are extremely pleased by the initial success we are achieving in leveraging the value of our library of proven gaming content into the interactive markets, including social, casual and mobile entertainment,” said Gamache. “This success is reflected in the $9m year-over-year growth in revenue from interactive products and services, and we anticipate a range of $35-to-$40m in annual revenue for fiscal 2013 from these revenue streams.
“While the costs needed to build a sustainable foundation for interactive products and services impact near-term operating profitability, we believe this investment favorably positions WMS to participate in the attractive, high-margin growth potential of these opportunities that can lead to the creation of new value for our shareholders.”
Williams Interactive CEO and president, Orrin J. Edidin (pictured), said in yesterday’s Q1 earnings analyst call: “If you consider the approximate $34m all-in cost to acquire Jadestone and Phantom, add in the $18m of costs to originally license the IP and create a technology foundation for our jackpotparty.com online platform several years ago, and then add in the expense we incurred over the past two years and the expected $30m to $35m in incremental expense that Scott mentioned for fiscal ’13, you’d see that the total investment for WMS to enter these three new revenue streams was much less than $100m spread over multiple years.
“”¦we believe the foundation we’re building today in interactive products and services will be an important contributor to the WMS revenue stream and profitability story over the next several years.”
Overall the company, that specialises in the manufacture of lottery terminal and slot machines, saw revenue from gaming operations grows 4% to $71m compared to the same period last year, while gross profit increased by $4.1m.
The past 12 months have seen WMS establish a varied online business, launching a separate division entitled Williams Interactive to manage the offering in July this year.
Later that month, the Jackpot Party-branded social casino on Facebook was launched, followed by the Nevada licenced WMS signing a strategic alliance with Dragonfish, the B2B arm of 888 Holdings, aimed at allowing it to offer 888’s online poker product to US casinos.
In April it announced that Jackpot Party would host Groupe Partouche’s Belgian-facing casino offering, where the operator is one of just four to hold a top-level ‘A+’ licence.
In September WMS launched its freeplay casino product Play4Fun Network with its first client, a tribal casino in Iowa, enabling the casino’s players to access multiple play-for-fun slot and casual games online, all under the casino’s own brand.
Meanwhile October saw the company sign multi-year licensing agreements with Swedish operators Betsson and Unibet Group. The deal allows Betsson and Unibet access to WMS’ games offered by Jadestone, following May’s acquisition of the Swedish games developer. The portfolio also includes games offered by WMS’ UK-facing site Jackpot Party which went live last year.