Renowned UK-based online gaming operator Stride Gaming on February 11 confirmed that it is considering a number of strategic options for its future growth and one of these options happen to include a potential sale of the company. This announcement confirms the rumors that have been flying around with regards to the company putting itself up for sale. According to a statement released by the company, the move is parts of the company’s efforts to participate in “potential industry consolidation through a sale of the company” and it is working with bankers from Investec to ensure that the process runs smoothly.
The move also comes in the wake of a £7.1 million fine that was issued to Daub Alderney, one of Stride Gaming’s subsidiaries by the UK Gambling Commission. As it turns out, Daub Alderney had failed to provide the customer protection standards that are required of all of the gambling commission’s licensees hence the fine.
Even though the penalty set the company and its subsidiaries straight, it did not cripple the company’s operations in any way – Stride Gaming which operates Regal Wins Casino, Kitty Bingo and Lucky Pants Bingo brands is one of the leading gaming operators in the UK, boasting of an 11 percent market share of the massive £2.8 billion a year gaming market. In fact, the company is listed on AIM and has a market cap of about £8.5 million at the time of this writing. After the sale, the company intends to refocus its efforts towards “winning and retaining mass market, recreational customers onto its bingo and casino sites” using its proprietary infrastructure and technology.
At the moment, the Stride Gaming’s board is not currently considering an offer proposal for the company. Instead, the officials will report back just a short while before announcing its interim results after which they will probably begin looking into proposals.
“The board believes the group will continue to be highly cash generative and the board remains committed to its revised dividend policy to distribute at least 50% of adjusted net earnings in dividends,” the members of the company’s board said in a statement.
Leveraging Opportunities for Growth
As mentioned earlier, Stride Gaming certainly has no plans to hang its hats after the sale which is just one of the growth opportunities that it has been considering. As it turns out, the company is also considering a “more aggressive UK and international organic expansion strategy” which is expected to be implemented sometime this year. One of the avenues that the company is considering is online gaming which has been growing rapidly over the past few years and still shows no sign of slowing down anytime soon. This is naturally a great strategy for the company especially considering how many opportunities have been cropping up in that territory despite the fiscal and regulatory pressures that have been cropping up in the recent past.
