Trading update for Q3 2020, signing of LOI in sports betting and new state licences in USA
Inside information. Acroud AB (publ) (“Acroud” or “the Company”) issues a trading update for the third quarter, while also announcing the signing of a Letter Of Intent (LOI) to acquire a company in sports betting and the granting of three additional new licences in American states. The Company’s board has decided to accelerate the implementation of the growth strategy with the aim of responding more proactively to future growth and acquisition opportunities. The Company is currently engaged in several active acquisition dialogues and its two largest shareholders are in favour of the growth strategy adopted by the Board.
As previously communicated, the Company’s third quarter has been challenging, which is due to the fact that the previous sharp increase in poker and casino traffic in the period March to May has slowed to a level similar to that before COVID-19. Also, sports betting’s recovery is proceeding a little more slowly than expected, and the Company has adjusted its product offering to ensure compatibility with the rules in the Dutch market, which together has resulted in a larger decline in revenue than expected.
The Company is now accelerating growth in other markets and expects to have offset the decline in revenue by about the end of Q4 2020. In connection with the strategy work, further efficiency measures have been implemented, which will bring cost reductions from Q4 2020. The efficiency measures are continuing, with the goal of improving the operating margin.
Trading update Q3 2020
- Revenue is expected to amount to EUR 2.4m in Q3 2020, 33 percent lower than in Q2 2020 and 31 percent lower than in Q3 2019.
- Reported EBITDA is expected to amount to EUR 1.0m, 36 percent lower than in Q2 2020 and 49 percent lower than in Q3 2019. The EBITDA margin for Q3 2020 is expected to be 40 percent.
- Reported profit after tax is expected to amount to EUR 0.3m, compared with EUR -1.1m in Q2 2020 and EUR 1.1m in Q3 2019, which was positively affected by exchange rate fluctuations related to the loan financing. Adjusted for exchange rate fluctuations, adjusted profit after tax for Q3 2020 amounts to EUR 0.2m.
- The cash position at 30 September 2020 is estimated at EUR 2.1m. The Company’s interest-bearing net debt is expected to be EUR 21.7m, corresponding to a debt/equity ratio (defined as net debt/adjusted EBITDA) of 3.2x, based on estimated LTM adjusted EBITDA at 30 September 2020.
In line with the growth strategy and the Company’s expansion plan for the USA, with gradual roll-outs in new states, Acroud has been awarded three new licences in the American states of West Virginia, Indiana and Iowa.
“Operationally, the Company is now moving at a fast pace, with underlying KPIs pointing in the right direction at the end of Q3 – an effect of the change management during Q2 and Q3. In addition to the three licences awarded in Q3, we also expect to be granted licences in Pennsylvania, Illinois and Colorado in the near future, which will significantly increase our addressable market in the USA,” says CEO Robert Andersson.
Acroud has signed a Letter of Intent (LOI) regarding the acquisition of a fast-growing lead generation company within sports betting, well positioned for emerging markets such as Latin America, Africa and Asia. The agreement comprises a total purchase consideration of approximately EUR 1.2m, the majority of which will be paid in shares, and an additional consideration which is contingent on 2021 target fulfilment, based on EBITDA growth and an EBITDA multiple corresponding to 3.5. The potential acquisition is expected to accelerate the Company’s growth in strategic focus areas such as sports betting and emerging markets. More information will be issued when a transfer agreement is signed.
All figures are preliminary and based on management accounts. The next financial update is scheduled to take place in connection with this year’s Q3 report, which will be published on 12 November 2020.
This information is information that Acroud AB (publ) is required to disclose under the EU Market Abuse Regulation 596/2014. The information in this press release has been published through the agency of the contact persons below, at the time specified by Acroud AB’s (publ) news distributor Cision for publication of this press release. The persons below may also be contacted for further information.
For further information, please contact:
Robert Andersson, President and CEO
+356 9999 8017
Gustav Vadenbring, CFO
+356 9967 6001
|ACROUD AB (publ)|
|Telephone:||+356 2132 3750/1|
About ACROUD AB
ACROUD owns, operates and develops high-quality comparison sites, mainly in iGaming affiliation, for the purpose of helping our partners by channelling high-quality users to the Company’s customers – primarily iGaming operators. Through the sites, ACROUD generates high-quality users, primarily to global iGaming operators. The Company, which was founded in 2003, has just over 70 employees and is headquartered in Malta. The share (ACROUD) is listed on Nasdaq First North Growth Market. Certified Adviser: FNCA Sweden AB, firstname.lastname@example.org, +46 8 528 00 399