Stride Gaming (LON:STR) is a leading online online gaming operator, working within the regulated markets, with a top 4 presence in the UK bingo market. Stride recently reported FY Aug 2017 results which confirmed strong operating progress, cashflows, and balance sheet. The UK bingo market continues to grow at mid-high single digits, and within that Stride has been gaining market share rapidly. The company is led by a management team with a proven track record of shareholder value creation (see GlobalCom or Wink Bingo for examples).
Although the UK bingo market continues to grow, we are seeing some of the peripheral players being squeezed out. This process has been accelerated by changes to the UK’s Point-of-Consumption (POC) tax regime.
In this environment Stride Gaming (LON:STR) has been gaining market share, driving annualised organic revenue growth of around 20% over the last 2 years. Among the company’s key competitive advantages are its proprietary software platforms, which obviate the need for expensive 3 rd party licence expenditure. Recycling these savings into marketing/selling investment has been a successful strategy. In this report we demonstrate via hard metrics how Stride is gaining market share.
Stride operates a multi-brand strategy, which provides broadbased interface with potential customers in terms of search-engine hits etc. Player retention is reinforced by the cross-selling opportunity between brands and by a well developed in-house business intelligence capability. These factors help Stride to achieve market-leading Life-Time-Value (a measure of revenue per acquired customer).
The table below shows our financial forecasts for Stride Gaming. Our EBITDA figures include the impact of the UK POC tax, i.e. as reported. If we measure EBITDA growth on a pro-forma basis (applying the tax going backwards) then the EBITDA growth has been continuous (24% like-for-like in 2017).