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UK – Stride looking for £10m from AIM float

By - 6 May 2015

Stride Gaming, a multi-branded online bingo-led operator, has announced its intention to raise at least £10m and seek admission of its ordinary shares to trading on AIM.

Dealings are expected to commence on AIM on 19 May 2015. Cantor Fitzgerald Europe is acting as Nominated Adviser and Broker to the company.

Stride Gaming is a UK focused, real money, bingo-led online operator, using its proprietary and purchased software to provide online bingo and related gaming activities to players. Stride Gaming only operates in regulated markets, principally the UK.

The group operates a multi-branded strategy which includes the online bingo brands Kitty Bingo, Lucky Pants Bingo, Bingo Extra, Jackpot Café, Jackpot Liner, King Jackpot, together with the online casino brands Spin and Win and Magical Vegas.

The group has experienced significant organic growth of its proprietary brands with NGR up 40 per cent between Q1 to Q4 2014. Additionally, the group has been acquisitive with the acquisition of the business and assets of Table Top Entertainment (including the brands Jackpot Café, Jackpot Liner and King Jackpot) in September 2014. The Group also owns an Italian online gaming business, Baldo, which has an Italian gambling licence, as well as a 24.5 per cent. interest in a licensed Spanish operator, QSB Gaming Limited.

The Directors believe there are a number of growth opportunities for the Group, both organically and through acquisition. The overall UK gambling market is substantial and is forecast to pass £3bn of NGR by 2016 (source: Gambling Compliance). The UK online gaming market is estimated to grow approximately £1.6bn of NGR by 2016 with bingo-led online gaming estimated to account for 32.3 per cent of the UK online gaming market.

With the implementation of the point of POC tax in the UK, and the general increase in regulation, the Directors believe that a number of smaller-scale online bingo operators will suffer a significant impact to their margins from the POC tax that will make it difficult for them to continue operating. The Directors also believe that with bingo generally attracting a predominately female demographic, the pressure on margins created by the POC tax will also lead to the larger multi-product online gambling operators prioritising their marketing spend more towards their core product leaving opportunity for a bingo-led business to increase market share both from organic growth and through acquisition.
Stride Gaming is therefore seeking to raise at least £10m to support the its strategic buy and build and organic growth strategies.

Stride Gaming’s Non Executive-Chairman, Nigel Payne, said: “We feel this is an opportune moment for a scale bingo-led operator to come to AIM to capitalise on the opportunities afforded by the regulatory changes, which is forcing consolidation in the industry, to grow organically and through acquisition. Our business is profitable, established and run by a highly experienced and proven management team. Today’s news marks an important step in our aim to become the market leader in online bingo. We look forward to a successful future for the company and our goal is to deliver meaningful returns to our shareholders.”

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