Acquisitions helped Stride Gaming (STR) up the stakes in its first full-year results since its flotation in May. The three purchases helped push operating profit up by more than a third to £1.15m although management claimed that organic growth had also "outperformed our expectations". The prime contribution seems to have come from its most recent purchase, InfiApps, which was purchased for an initial sum of $22m (£14.5m), with another $18m contingent on subsequent performance. InfiApps has been "immediately earnings enhancing", management added, thanks no doubt to the 5.2m downloads of its flagship Slot Bonanza game.
The group's games suite is weighted towards bingo and Stride believes it occupies a prime position in that segment of the gaming market. Management said it expected some of the 400-plus operators, many of which it claims are small in size, to succumb to the pressures of the UK's Point of Consumption tax, while the larger businesses would "prioritise their marketing spend on their core products and less so on bingo". But its stated strategy of acquiring other businesses does mean it will continue to diversify in terms of which games it offers and how they can be accessed. Brands that can be used on mobile devices generated nearly half of net gaming revenues.
House broker Cantor Fitzgerald expects pre-tax profit of £10.3m for the February 2016 year-end, leading to EPS of 16.3p compared with £6.9m and 13.1p in 2015.
| STRIDE GAMING (STR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 263p | MARKET VALUE: | £135m | |
| TOUCH: | 260-265p | 12-MONTH HIGH: | 323p | LOW: 138p |
| DIVIDEND YIELD: | nil | PE RATIO: | 277 | |
| NET ASSET VALUE: | 60p* | NET DEBT: | 6% | |
| Year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012** | 0.9 | -1.6 | -3.2 | nil |
| 2013** | 7.3 | -1.9 | -3.8 | nil |
| 2014 | 8.5 | 0.8 | 2.7 | nil |
| 2015 | 27.8 | 0.4 | 0.9 | nil |
| % change | +228 | -57 | -65 | - |
*Includes intangible assets of £36.4m, or 71p a share **Pre-IPO figures | ||||
