Bragg hails “encouraging” strategic review process amid mixed Q1

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Revenue was up 49.9% year-on-year at Bragg in Q1. The group referenced organic growth from its existing client base, new customers in multiple jurisdictions and the success of its in-house Wild Streak Gaming studio.

Stand-out Q1 developments include a new licence in Peru. It also exclusively launched slots from King Show Games in the US and struck a content deal with Light & Wonder.

However, the main story out of Q1 is that Bragg is considering strategic alternatives for the business. A special committee has been formed to review its options. These include the sale of the group or its assets, a merger, financing and further acquisitions.

Updating the market on progress, CEO Matevž Mazij says the group is making “encouraging progress” on the review process. However, he stressed is it very much “business as usual” while this work continues. 

“While the strategic review process progresses, we remain bullish on the opportunities ahead as the trend of igaming regulation continues worldwide,” Mazij said. “We see exciting potential in newly regulating markets like Brazil, Peru and Finland, as well as untapped opportunities in regions like Africa that we are actively exploring.”

Leadership changes at Bragg

With change seemingly afoot at Bragg, the group has also announced several incomings and outgoings at senior level. 

Last month, Ronen Kannor resigned as chief financial officer and will leave the business by 3 June. In addition, just last week, former Digital Gaming Corporation executive Neill Whyte was revealed as Bragg’s new chief commercial officer.

Lara Falzon also exited her roles as president and chief operating officer of the business late last year.

“The strategic moves we have made have established Bragg as a vital content provider for premier international igaming operators, reinforcing our base for reliable and lucrative growth,” Mazij said.

“Equipped with the appropriate strategies, financial resources and talent, we are well-prepared to maintain our business momentum while pursuing initiatives that foster cash flow growth and deliver increased value to our shareholders.”

Net profit down in Q1

While revenue growth in Q1 is positive news for Bragg, higher spending hit bottom line for the quarter.

Cost of revenue increased 12.3% to €11.9m, while selling, general and administrative spend climbed 4.2% to €12.4m. Bragg also noted a €645,000 loss on remeasurement of deferred consideration and €592,000 in finance costs.

This resulted in a pre-tax loss of €1.9m, in contrast to last year’s €76,000 loss. Bragg paid €383,000 in tax, leaving a net loss of €2.3m, more than double the €1.0m loss in 2023.

In addition, adjusted EBITDA dropped 12.8% to €12.8m for Q1.

Optimism remains for 2024

“Although gross profit and adjusted EBITDA saw modest decreases in Q1 stemming from the extension and renegotiation of our agreement with Entain to provide our PAM platform to BetCity.nl through 2025, we maintain a strong belief in our ability to achieve long-term growth and profitability,” Mazij said.

“Our proprietary and exclusive third-party content continues to gain ground with an increasing number of top-tier operators globally and we introduced a total of 19 new exclusive titles worldwide in the first quarter of 2024.”

In fact, such is Bragg’s confidence moving forward that it is reiterating full-year guidance. Revenue is set to be between €102.0m and €109.0m in 2024, with adjusted EBITDA to range from €15.2m to €18.5m.

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