If investors ignore Stride Gaming’s (STR) social gaming division, ‘real money gaming’ revenues rose by 29 per cent to £81.8m and adjusted cash profits rose by a quarter. Although to be fair, those numbers also reflect rising deposits, an improved yield per player, and contributions from recent acquisitions. The amount of revenue derived from mobile and touch devices has also grown considerably and now represents two-thirds of ‘real money’ gross gaming revenues.
By contrast, social gaming only represents 9 per cent of group net gaming revenues, but it’s worth remembering that sales contracted by 37 per cent to £8.1m through the period. Customer acquisition is a problem, and additional marketing resources have been allocated to improve numbers. The problems in this space are reflected in a £9.9m impairment in relation to the value of InfiApps – a mobile gaming company under the Stride social gaming umbrella. Along with contingent amounts due on the InfiApps and 8Ball acquisitions, this largely accounted for the fall in reported pre-tax profit.
Analysts at finnCap expect adjusted pre-tax profit of £17.9m for the year ending August 2018, giving EPS of 21.2p, compared with £18.9m and 22.6p in FY2017.
| STRIDE GAMING (STR) | ||||
| ORD PRICE: | 251p | MARKET VALUE: | £181m | |
| TOUCH: | 246-255p | 12-MONTH HIGH: | 267p | LOW: 208p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | na | |
| NET ASSET VALUE: | 76p* | NET CASH: | £19.8m | |
| Year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013** | 7.3 | -1.9 | -3.8 | nil |
| 2014 | 8.5 | 0.8 | 2.7 | nil |
| 2015 | 27.8 | 0.4 | 0.9 | nil |
| 2016 | 47.8 | 0.1 | -0.8 | 2.5 |
| 2017 | 89.9 | -26.7 | -38.1 | 2.7 |
| % change | +88 | - | - | +8 |
| Ex-div: | 4 Jan | |||
| Payment: | 1 Feb | |||
| *Includes intangible assets of £57.8m, or 80p a share | ||||
| **Pre-IPO figures | ||||
