Revenue from the NeoGames business for the three months through to 31 March 2022 amounted to $13.3m, which was down 0.7% from the corresponding period last year.
Of this total, $7.0m was generated through royalties from turnkey contracts, while $3.3m was attributed to the use of IP rights and $1.7m from for development and other services related to the NeoPollard Interactive joint venture with Pollard Banknote.
A further $536,000 in revenue was generated through royalties from its games contracts, $426,000 for development and other services related to Aspire Global, and the remaining $332,000 from its joint operation of ilottery services for the Michigan Lottery.
However, NeoGames also reported an additional $9.2m in revenue from its interest in the NeoPollard Interactive business, which it did not count in its main revenue figure. If included, this increases its total revenue to $22.4m for the quarter, up 3.7% year-on-year.
Turning to costs, operating expenses increased 33.9% year-on-year to $15.4m, with this rise mainly due to an additional $2.2m in costs related to the prospective Aspire Global acquisition. NeoGames also noted a 37.0% rise in general and administrative expenses.
This left an operating loss before NeoPollard is included of $2.2m, compared to a $2.2m profit at the same point in 2021. The supplier also noted $1.6m in interest costs with respect to funding from related parties and $499,000 in finance expenses, but this spending was more than offset by $3.9m worth of profit from its share in the NeoPollard joint venture.
As such, pre-tax loss came in at $409,000, in contrast to a $4.6m at the end of Q1 last year. NeoGames paid $484,000 in income tax during the quarter, resulting in a total net loss of $893,000, compared to a $4.0m profit in 2021.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was also down 12.0% to $8.5m.
“Our business continues to trend positively in 2022, as our existing accounts continue to perform well in terms of both sequential, as well as annual growth rates,” NeoGames’ chief executive Moti Malul said. “We are delighted to see particularly strong growth from our Virginia and Alberta accounts, which have become leading contributors to our revenues.”
Malul also referenced the prospective Aspire Global acquisition, with NeoGames having submitted a public offer worth SEK4.3bn to purchase 100% of the shares in the business.
NeoGames published the prospectus, offer document and acceptance form for the potential offer on 26 April, with the acceptance period for this running to 25 May. The supplier said it expects a settlement by 14 June and hopes to close the acquisition before the end of the second quarter.
“During the quarter we announced an offer to acquire Aspire Global in an effort to enhance our offering and expand our geographies,” Malul said. “We have been keenly focused on completing this transaction and have recently launched our tender offer.
“We are confident with the progress and expect to close during the second quarter.”
Original article: https://igamingbusiness.com/neogames-q1-2022-results/
