Canadian online gambling operator Intertain Group lost C$26.1m (US $21.8m) in the first quarter of 2015 as acquisition costs undid a tenfold revenue gain.
Intertain, whose operations include the Jackpotjoy, Costa Bingo, Vera&John and InterCasino brands, reported revenue of C$32.8m in the first three months of 2015. That’s up from just C$3.1m in the same period last year, before Intertain acquired the UK-facing online bingo businesses of Jackpotjoy and Costa Bingo plus the Nordic-facing Vera&John online casino site.
The Vera&John operations were the revenue leader at C$15.2m, although the site recorded a C$580k loss for the quarter. The Mandalay/Costa Bingo operations generated C$9.9m in revenue and net income of just C$86k. InterCasino was the net income star, posting a C$3.3m profit on revenue of C$7.7m. However, the InterCasino tally includes C$5.6m from a revenue guarantee with Amaya Gaming, from whom Intertain purchased the InterCasino operations in 2013.
Intertain completed the Jackpotjoy acquisition in early April, so its figures aren’t included in the revenue column. But Intertain says the business generated earnings before interest and tax of £13.9m on revenue of £35.7m (C$67.1m).
Intertain’s adjusted earnings rose to C$11m from just C$2m last year, while actual earnings were C$15.2m in the red. Direct acquisition costs of C$24.3m and another C$8.4m in amortization of acquisition intangibles snuffed out any possibility of profit.
Intertain CEO John Kennedy Fitzgerald said Q1 had been an “exciting” period and now, having “worked tirelessly” to close the Jackpotjoy deal, the company is in a position “to begin executing our global growth strategy, specifically focusing on the female demographic and on regulated markets.”
Intertain also issued guidance on its prospects for 2015 as a whole, saying it expected revenue to come in between C$325m and C$355m, up from just C$40.8m in 2014. The 2015 projection doesn’t include “potential revenue earned from additional acquisitions that may occur in 2015,” suggesting Intertain isn’t through swiping its credit card just yet.