Canadian gambling operator Amaya Gaming Group’s recent spate of acquisitions significantly boosted its revenue in Q2 2013, but it wasn’t enough to overcome the costs associated with those acquisitions. Amaya reported revenue of $37.2m in the three months ending June 30, a 157% increase over the same period last year. Adjusted earnings were up nearly five-fold to $10.1m as margins increased to 27% from 14%. But the company’s net loss for the quarter rose 320% to $11.44m primarily due to legacy costs from its acquisition binge.
After filing an IPO in 2010, Amaya spent most of 2011 inking technology deals with government-run gaming corporations in jurisdictions as varied as Kenya, Moldova and the Dominican Republic. Amaya then spent most of 2012 acquiring a diverse portfolio of companies, from online gambling software developers Cryptologic to US gaming device supplier Cadillac Jack to the Ongame online poker network. Amaya’s acquisition addiction shows little sign of abating, as evidenced by June’s $25m purchase of Los Angeles-based lottery and gaming product designer Diamond Game Enterprises.
But Amaya’s add-ons also added significant costs, as reflected in the quarter’s $44.45m in expenses, a 160% increase over the same period last year. Expenses for the year to date are up 200% to $89.07m. On the plus side, that’s less than the 260% rate of revenue growth over the first six months, but total losses for the first six months of 2013 still came to $18.8m, up 159% year-on-year.
On August 7, Amaya received conditional approval from the Toronto Stock Exchange to move its listing from the TSX Venture Exchange to the broader TSX. Convinced the worm is about to turn, Amaya CEO David Baazov pronounced himself pleased with the progress his company was making in 2013, which included filing its application to participate in New Jersey’s online gambling market.