Patrick Southon, Gaming Realms’ chief executive, insists though it was not the sea change it might appear.
“We sold revenue and players and a licensing agreement with a third part media owner.
“But we‘ve kept the technology, the licences, the customer services platform and the back-end that runs it all.
“We can replace the revenue with B2B partners such as the Health Lottery and licensing.”
At up to a maximum £23.1mln it also looked a good price for the B2C arm especially as Gaming Realms will retain a 30% residual stake.
On completion of the sale, it received an initial £4.2mln.
Another £4.2mln will be paid this time next year, while the full payout will be triggered if B2C makes an underlying profit of £6mln in the year to June 2019.
Southon sees that as doable and says the business has already seen a beneficial impact from River iGaming’s greater marketing budget.
We build games
More importantly, Gaming Realms is also now free to focus on building and licensing new games, B2B partnerships and broadening the reach of its very successful Slingo format.
Licensing income doubled to £600,000 in the first half of 2018 and this side of the business should breaking even early in next year.
The group overall posted underlying interim profits of £400,000 as marketing costs dropped by £3.6mln.
Revenue was £11mln against £15mln.
Most of the revenue and income in the interim numbers came from the B2C side.
This revenue will drop down to 30% from here and there will be a gap as the licensing income builds up.
Southon reckons it will take 18 months for the River iGaming deal to wash through fully, but by then the potential of licensing side should be clear.
For example, Southon expects the Slingo name to become generic for all bingo-style mobile games.
Forecasts in the market suggest an underlying profit of about £800,000 in 2019 and by 2021 the group moving from pre-tax losses (after amortisation) to a pre-tax profit of £1.85mln.
In the meantime, shareholders have the prospect of a special dividend to look forward to once the full consideration for the B2C business is paid.
How much will depend on well the B2C business performs in the earn-out year to June 2019, but cash requirements will be much lower going forward without the marketing expense of the consumer business.
Shares have fallen back since the River iGaming announcement, something Southon attributes to Gaming Realms doing something possibly 'not seen before'.
“We are a start-up now in some ways, but we have a great opportunity and the cash now to do it.”