TIDMGAN
RNS Number : 5148H
GAN PLC
25 March 2020
LONDON STOCK EXCHANGE (LSE): GAN
GAN Announces Public Filing of Registration Statement on Form
F-1 for U.S. Listing on the Nasdaq; Provides 2019 Financial
Overview / Trading and COVID-19 Update
London | March 25, 2020: GAN plc ("GAN" or the "Company"), an
award-winning developer and supplier of enterprise-level B2B
Internet gambling software, services and online gaming content in
the United States, today provided a market update including an
update in light of the recent developments regarding COVID-19 .
The Company maintains online only gaming operations, and the
successful implementation of "Work from Home" was completed on
March 13. As a wholly digital business, GAN has not experienced any
interruption in technical development, and/or technical operations
conducted to support its clients. Furthermore, early indications of
a material shift from retail gambling to online gambling is
anticipated to be positive for GAN's overall revenue opportunity
during this time.
Update on the Nasdaq Listing
The Board of Directors, in consultation with its financial
advisers, continues to be committed to the Nasdaq listing following
the issuance of the UK Scheme of Arrangement documents to
shareholders on March 13, 2020, with a shareholders meeting
scheduled for March 31, 2020. The Company is publicly filing a
registration statement on Form F-1 with the U.S. Securities and
Exchange Commission (the "SEC") today relating to the proposed
public listing of common stock in GAN Limited. The public listing
is expected to take place after the SEC completes its review
process, subject to market and other conditions. The number of
ordinary shares to be offered and the price range for the proposed
offering have yet to be determined.
The Form F-1 registration statement has not yet become
effective. These securities to be registered may not be sold nor
may offers to buy be accepted prior to the time when the
registration statement becomes effective. This press release shall
not constitute an offer to sell or the solicitation of an offer to
buy any securities in the United States, nor shall there be any
sale of these securities in any state or other jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction. Securities may not be offered or sold in the
United States absent registration or an exemption from
registration, and any public offering of securities to be made in
the United States will be made solely by means of a prospectus that
may be obtained from the Company and that will contain detailed
information about the Company and management, as well as financial
statements.
The Form F-1 filing includes certain financial information for
the year ended December 31, 2019, which is summarized below. A copy
of the Form F-1 can be sourced at
https://www.sec.gov/edgar/search-and-access .
2019 Financial Overview
-- Net Revenue of $30.0m (2018: $14.0m), an increase of 114% on 2018
-- Adjusted EBITDA(1) of $8.4m (2018: loss of $1.7m)
-- Income before tax of $2.4m (2018: loss of $8.6m) and earnings
per share of $0.08 (2018: loss per share of $0.39)
-- Income for the year of $1.8m (2018: loss of $7.7m)
-- Cash and cash equivalents at the end of the year of $10.1m (2018: $7.0m)
-- Total Assets at the end of the year of $26.1m (2018: $22.6m)
-- Concluded FY 2019 with strong, debt-free balance sheet and
$2.8m positive cash flow for the year
(1) Adjusted EBITDA is a non-GAAP Company specific measure and
excludes interest, tax, depreciation, amortisation, share based
payment expenses, impairment of intangible assets and other items
which the directors consider to be non-recurring and one time in
nature.
Real Money Internet Gambling in the U.S.
Taking the State of New Jersey as the bellwether for U.S.
Internet gambling, since February 23 we have conducted an extensive
review of the expected impact of COVID-19 on Internet gambling
together with the International gambling consultancy Regulus
Partners, and the Company comments as follows:
-- Prior to March 12, 2020, the New Jersey Internet gambling
market was expected to generate $976M in gross revenue in 2020,
comprising $312M from sports betting and $665M from Internet
gaming;
-- Internet gaming in New Jersey may increase +2% to $677M, to
reflect the substitution effect as Internet sports bettors shift a
proportion of their wallet into Internet gaming, which the Company
has already experienced as an emerging trend. For illustrative
purposes only, daily new first-time depositors of GAN client Ocean
Casino Resort increased +719% against the month-to-date daily
average with a +57% increase in the value of daily deposits, on the
first day after Atlantic City shuttered all retail casino
properties consequent to local government direction;
-- Internet sports betting in New Jersey may decline -14% in the
full year 2020 from $312M to $255M, which the Company has already
experienced as an emerging trend. This assumes the regular U.S.
sports calendar substantially resumes in August 2020 and the
2020/21 NFL Sports betting season commences in September 2020
("Impact Period");
-- Internet sports betting revenues in Q1 2020 were ahead of
expectations as on the date the Impact Period commenced (March 12,
2020) and, despite subsequent material reduction in sports betting
revenues, are expected to remain ahead of expectations for Q1
(Internet sports betting revenues were approximately 12.4% of
participatory recurring revenues in 2019); and
-- Gross Operator Revenues in Q1 2020 are currently estimated to
be in excess of $140M, up from $120.8M in Q4 2019 with Gross
Operator Revenues from Internet casino gaming in the United States
increased +341% YoY since the commencement of the Impact Period on
March 12.
Other Business Units
Italian Regulated Gaming Market
In the Italian regulated Internet gambling market, the Company
has seen significant increases of betting activity by end user
gamblers, in excess of the +13.9% increases reported on March 10,
2020. Following imposition of certain measures on February 23,
+17.6% more online bets have been processed year-on-year via GAN's
technology Platform in Italy during the following twenty-four (24)
days. The Company believes this accelerating trend will continue
throughout March and into April.
Simulated Gaming
In Simulated Gaming, as of today's date, all U.S. casino
operator clients have closed their retail casino properties, and
the majority of those clients have undertaken unprecedented
marketing promotion of GAN's Simulated Gaming service in order to
continue to engage and monetize their patrons online, while the
retail gaming properties are closed during the Impact Period. As a
direct result, the Company has seen an acceleration of revenues
among those clients, which are expected to drive substantially
greater growth in both revenue and Adjusted EBITDA from Simulated
Gaming throughout the Impact Period to benefit the full year 2020.
For illustrative purposes only, carded patrons of GAN's largest
operating client increased their aggregate value of daily Simulated
Gaming purchases +86% against the month-to-date daily average, on
the first day this client electively shuttered all their retail
casino properties.
New Client Wins: Penn National and Michigan-based Tribal
Casino
The Company now confirms both (i) a major new client win for
Simulated Gaming, Penn National, which represents the largest U.S.
casino operator of B2B social casino gaming expected to drive
incremental revenue growth commencing August 2020 and (ii) Market
Access arrangements with the Sault Tribe of Chippewa Indians a
Native American Tribal Casino operator in the State of Michigan,
which will see GAN undertake substantial Internet gaming operations
commencing early 2021 together with an anonymous existing client of
both Simulated Gaming and real money Internet gambling, whose
identity will be confirmed in due course. Both these new client
wins will be further clarified by way of a standalone Regulatory
News Service statement, in the coming days. There are several new
client opportunities available to GAN for both real money Internet
gambling and Simulated Gaming throughout the balance of 2020.
Reiteration of Full Year Forecasts
Based on the information set out above, GAN today confirms that
the Company is trading in line with the Board of Directors'
expectations and reiterates confidence in full year 2020
revenue.
Management Commentary
Dermot Smurfit, CEO of GAN commented:
" The recent global pandemic has caused immense tragedy for so
many affected by the virus and significant disruption to a
multitude of business operations. Our thoughts are with all these
people. We are extremely fortunate to be an online-only business in
the wake of the social distancing mandated by governments around
the globe and especially in our key markets of Italy and the United
States. GAN will be doing all it can to ensure responsible as well
as responsive operations during this tragic and difficult period.
Despite recent market turmoil, our equity capital markets strategy
remains to secure the Company's Nasdaq listing next month, subject
to market conditions, as we firmly believe that our growth
opportunity in the U.S. remains intact, albeit in a differently
weighted product mix throughout the balance of 2020. As directors
we will act in the best interests of all shareholders in
considering the merits of any capital raising activity consequent
to the Nasdaq listing and in light of the recent share price
movements we will remain highly sensitive to the issue of
shareholder dilution. The Company's resilience during this
difficult time should meaningfully resonate with investors that
seek to diversify their exposure to our rapidly growing end markets
with our online-only products and capabilities. "
About GAN Plc
GAN is a leading business-to-business ("B2B") supplier of
internet gambling software-as-a-service solutions ("SaaS") to the
US land-based casino industry. The Company has developed a
proprietary internet gambling enterprise software system,
GameSTACK(TM), which it licenses principally to land-based US
casino operators as a turnkey technology solution for regulated
real-money internet gambling, encompassing internet gaming,
internet sports gaming and virtual Simulated Gaming.
GAN is listed on the London Stock Exchange (LSE: GAN).
For more information please visit www.GAN.com.
For further information please contact:
GAN US Investors: The Equity Group
Jack Wielebinski Adam Prior
Head of Investor Relations aprior@equityny.com
+1 214 799 4660 +1 212 371 8660
jwielebinski@GAN.com
Carolyne Sohn
csohn@equityny.com
+1 415 568 2255
UK & Ireland Investors: Newgate
Communications
Adam Lloyd
Giles Croot
GAN@Newgatecomms.com
+44 (0) 20 3757 6880
Davy (Nominated Adviser
and Joint Broker)
John Frain / Barry
Murphy
+353 1 679 6363
Liberum (Joint Broker)
Neil Patel / Cameron
Duncan
+44 (0) 20 3100 2000
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END
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