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Sweden – Cherry cheered by 179 per cent revenue growth

By - 25 August 2017

Swedish online gaming group Cherry saw its Q2 revenue increase by 179 per cent year-on-year to MSEK 536 following the purchase of ComeOn Malta and 25 per cent of Highlight Games.

Organic revenue growth amounted to 37 per cent. Game development and Performance-based marketing were the stand-out performers, whilst Online gaming has not yet delivered in line with Cherry’s plan. However, the Online gaming business continued to develop positively. Revenue grew by 241 per cent to MSEK 437, with organic growth of 31 per cent.

Anders Holmgreen, CEO at Cherry, said: “We continue to be a profitable, fast-growing company, even if the integration of ComeOn! has not yet reached full positive effect. By further diversifying and consolidating our operations, we strengthened our platform and thus the conditions for long-term leverage. The rapid merging of ComeOn!’s activities has led to a strong focus on integration, affecting growth. It is worth mentioning that marketing efforts have not yet had the expected effect. At the same time, there is a high level of activity with a variety of initiatives that strengthen both the business area’s organization and the offering as a whole. We assess that the future of ComeOn! looks bright, but that integration will take a little longer than initially anticipated.”

Yggdrasil Gaming had a very strong second quarter and revenue increased by 103 per cent to MSEK 40 with an EBITDA margin of 44 per cent. A number of new important licensing agreements were concluded and more innovative games were launched. During the quarter, Yggdrasil also went live with their games in the Italian regulated market.

Game Lounge’s operations in performance-based marketing continue to grow at a rapid pace and with good profitability. Revenue increased by 164 per cent to MSEK 33 and the EBITDA margin was strengthened with 540 per cent to 62 per cent. During the second quarter, all markets had an increased number of visitors as well as new depositing customers, despite the fact that marketing efforts were less than the previous quarter.

Mr. Holmgreen added: “In summary, the second quarter confirmed a continued positive trend for Cherry, and the development has been strong throughout the opening period of the third quarter. With the acquisition of 25 per cent of the game development company Highlight Games we have diversified our operations further, while both investments and the number of acquisition candidates show a high residual potential. We look forward to further refining our portfolio of investments, which cover the entire gaming value chain.”

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