The first quarter results of the GiG set a new high point for revenue, for the second consecutive reporting period. The supplier’s revenue increased by 37.1% year-on-year to 22.1m in the third quarter.
GiG Media, its affiliate division, continues to grow rapidly, but for the three months to 30 June, the platform business was the best performer. The full quarter contribution from Sportnco contributed to the growth of revenue.
Sportnco had a big impact in the second quarter
In the wake of the first quarter results, chief executive Richard Brown talked about the anticipated impact of adding a proven sportsbook to GiG’s portfolio. It looks like it has delivered on that promise after Q2’s figures.
Brown says that they are very pleased with how it has started. The efforts going into the technology and people integrations have made a positive impact across the business.
He acknowledges that the work done with the Sportnco team meant that they had been hoping that it would progress well, but even then it is in the infancy of what the enlarged business can achieve.
Brown points to the business’s first North American supply deal with Maryland’s Crab Sports as a key example of how quickly they achieved a couple of early milestones. He says that being able to sign a cross player account management and sportsbook deal in North America immediately confirmed the M&A thesis.
Latin American opportunities are getting better
With its debut into Maryland and a subsequent agreement to enter Ontario in collaboration with King Billy parent company Kings Media, GiG has established a presence in North America. This gives it four clients on the continent..
There are opportunities in the US as well as an expanding scope for growth in Latin America. Sportnco has a foothold in the region, but the pace of regulation is increasing.
The net may now be cast wider with the signing into law of online gaming legislation by the president of Peru and a bill progressing through the legislature in the country.
GiG had high hopes for LatAm, but the pace of regulation is moving a bit quicker than anticipated. The platform to Betsson will be provided by the City of Buenos Aires and it will expand into two new markets.
The platform business is just one of the opportunities that are emerging. In LatAm, our media business has performed very well. In the second quarter, revenue from the Americas was up 170% and now represents 20% of media revenue. Considering we are relatively small in the US, Canada and LatAm are playing an important role.
There is more to come from Latin America, according to Brown. We have seen a lot of growth from companies in that region, particularly with Sportnco.
It is important to have a product that is appropriate for the market. If we continue to deliver a product that works well in that region, there will be a lot more to come.
European regulated markets strategy bears fruit
The majority of new contracts signed by GiG in the second quarter were centred around Europe.
GiG’s strategy has been to provide a point of access for established operators to expand their regulated footprint, and as the regulatory climate becomes more difficult across the continent, GiG appears to be utilizing that successfully.
GiG has been successful in developing strong positions in these established markets. In Central and Eastern Europe, it is doing well, as well as in Serbia and Croatia, and in Southern Europe, it has expanded its client base.
The higher the barriers to entry, the harder it is for us to get into the market.
Aspers helps push the push
Thanks to the agreement with Aspers in Great Britain, GiG’s omnichannel strategy focused on developing its land-based business’ online operations has taken a significant leap forward. The terms were announced in July after they had been agreed on in April.
Brown says that the GiG and Aspers teams are working to define the phases of the project, which includes an integration to connect the in-person and digital offerings.
He says that they were very happy to find a partner that shared their long-term vision of what omnichannel can be from an online perspective and how they can build that customer experience. They are willing, and brave, and they have some developments in their property that we can use in an online campaign as well.
We are very excited about working with them. It’s an incredibly professional organisation with an extremely strong track record in the retail space, and we think we’ve got a strong meeting of minds and ambition to deliver over the long term more and more product and user innovation that will really help to leverage and succeed for both parties.”
Is there more M&A around the corner?
The business has been growing its platform business to complement the growth of GiG Media. It feels like it has reached a point where both units are strong.
Brown says that there will be a strong flow of new brands going live if you look at the underlying dynamics. The company reiterates its full-year revenue guidance of 87m to 93m for 2022, with earnings projected to fall between 30m and 35m.
The business is now pursuing annual organic revenue growth of 20% because of increased long-term confidence. It had originally aimed to achieve an EBITDA margin of 40% by 2024, but with that metric currently sitting around 37%, this target has been increased to 50%.
With Sportnco having an immediate impact on performance, even as the post-merger integration progresses, it is impossible to rule out further deals. GiG’s board will continue to look at possible strategic options to increase shareholder value going forward.
The GiG’s first quarter results set a new high point for revenue, for the second consecutive reporting period. The supplier’s revenue increased by 37.1% year-on-year in the third quarter, to 22.1m. GiG Media, its affiliate division, continues to grow rapidly, but for the three months to 30 June, the platform business’ performance was the best.