sees profit rocket in H1

Increased demand for casino and poker helped offset the loss of sports events.
Increased demand for casino and poker helped offset the loss of sports events.

The affiliate group has reported a 249.1% increase in profit for the first half.

Malta.- Affiliate behemoth Group has reported that comprehensive profit rocketed by 249.1 per cent year-on-year to €4.1million for the first half in spite of a slowdown in revenue growth due to the pandemic. 

Revenue for the six months totalled €9.5million, down 2.2% from the H1 2019, although the second quarter saw strong performance with record high quarterly revenue of €4.4million and record numbers of new depositing customers in casino. 

For the two quarters combined, earned revenues from search engine optimisation and direct navigation, which account for most of the group’s revenue, climbed 6 per cent to €9.3million.

But the company halted bought traffic operations in the first quarter, causing paid revenue for the first six months of the year to fall 78 per cent year-on-year to €210,000.

The growth in profit was aided by an 18.2 per cent reduction in operating expenses to €6million and a 69.3 per cent drop in direct costs to €270,000 due to the suspension of paid traffic.

Although personnel costs climbed 11.7 per cent to €3.8million, other costs were halved to €1.4million through temporary reductions on spending on sports content and travel due to the pandemic.

Chief Executive Charles Gillespie said: “As expected, we saw a decline in sports revenue in the quarter as a result of Covid-19 postponements and cancellations of most sports events. However, the decline in sports revenue was offset by increased demand for other online gambling products like casino and poker.

“We attribute this increased consumer demand to a variety of factors including the closure of land-based gaming facilities, restrictions on movement and substitution demand from sports bettors unable to wager normally. We expect to see increased adoption of online gambling products persist post-pandemic.”

He said the group remains confident about future performance. 

“Although we remain cautious about the general economic implications of the Covid-19 pandemic, online-based business models such as ours have benefited from an accelerated structural shift from offline to online,” Gillespie said.

“The group itself continues to benefit from improved operational efficiencies from our new technology platforms. We are now in a position to accelerate product development and optimisation. We look to the future with confidence.”

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