Cherry online revenues jump 40% as losses fail to improve
Operator grows online business during H1 2014 however losses remain stubborn following marketing investment
Swedish gaming firm Cherry posted H1 losses of SEK9.3m (£0.8m) despite a 40% increase in online revenues after the operator ramped-up its marketing and bonusing spend in its core Scandinavian markets.
Cherry, which owns brands including CherryCasino.com and SpilleAutomater.com, posted online revenues of SEK40.6m against Group revenues of SEK76.4m for the period ended 30 June.
And Cherry Group CEO Emil Sunvisson said the development of a new group identity and increased investment in marketing expenses, which rose 12% in H1 to SEK21m, had been central to the firm’s growth.
Sunvisson said he expected this investment into online to continue over the course of the year as the company eyed further growth in the channel.
The jump in marketing spend meant that the company’s online losses in H1 remained relatively unchanged from SEK9.5m last year to SEK9.3m this year, although the firm’s Q2 losses almost halved year-on-year to SEK5.2m.
“Continued strong marketing investment and bonus expense related to customer acquisition burdens the result,” Sunvisson said. “However, with increasing volumes the margins will continue to improve,” he added.
Sunvisson also pointed towards its nascent B2B business Yggdrasil Gaming as having started strongly, despite “still being in start-up mode”.
The business unit recorded a loss of SEK1.8m in its first half-year results on turnover of SEK1.9m, but signed contracts with seven firms and launched with three major operators in the period, including Unibet and Mr Green, with Sunvisson confident there were more deals in the pipeline for the supplier.