GiG revenues plummet 26.4% in Q4 amid pivot to B2B business

Gaming Innovation Group (GiG) has revealed a 26.4% year-on-year decrease in its group revenues during the final three months of 2019, with revenues falling to €29.4m (£24.4m).

The Malta-headquartered operator’s EBITDA dipped to €4.8m (£3.9m) during Q4 2019 from a previous Q4 2018 high of €5m, while the company’s EBITDA margin rose 16.4%.

Revenues for the group’s B2C segment slipped by 26.3% year-on-year to €19m in Q4, however EBITDA increased fourfold during the period to €4.1m, allowing for a higher EBITDA margin of 22%.

Meanwhile, B2B revenues shrank by 26.2% year-on-year to €12.1m (£10m) with a corresponding EBITDA of €0.8m, which was down 81.3% from the same period in 2018.

Revenues from the group’s B2B media services division dropped by 13.7% year-on-year to €7.5m (£6.2m), with a corresponding EBITDA of €4m, down from the €4.9m reported during Q4 2018.

GiG’s operating expenses fell by 12% to €13.7m from a previous Q4 2018 figure of €15.4m, while its employee headcount dropped by 8% from 706 employees to 648.

GiG CEO Richard Brown, who was only appointed to the role in November 2019, conceded it had been a challenging period for the business, citing its strategic review and B2B pivot.

“The dynamics in the online gambling industry, both competitive and regulatory, have changed dramatically in the last two years and we, as a company, are forcefully adapting to that.

“We are coming out of a strategic review initiated in November last year [and] I am certain the actions taken will place the company in a truly exciting position for growth while securing the sustainability of the company’s financial position by significantly reducing its debt and leverage,” Brown added.

GiG has confirmed that its January revenues were 8% higher than its average revenues generated during Q4 2019.

Last week, the operator announced the sale of its B2C brands including Rizk, Guts, Kaboo and Thrills to Betsson as part of a multi-million-pound share purchase agreement.

Betsson’s existing sportsbook arm will be transferred to the GiG platform as part of the deal, with the company also agreeing to retain GiG’s B2C brands on the platform for a period of 30 months.

The quarter has also seen the operator introduce a fixed-fee payment model for its B2B operations.

GiG has also said it expects its full-year 2020 revenues to be between €70m and €75m with an EBITDA in the range of €14 to €17m, accounting for continuing full B2C operations until the transaction completes.