Telematic Interactive 2023 Q1 review

• Telematic Interactive Bulgaria AD reported 7% revenue growth for Q1 YoY reaching BGN 28.9mln. Casino revenues take the lion’s share of BGN 25.2mln or 87.1% of the total after an impressive 23.9% YoY growth. Sports-betting reached BGN 2.3mln, but this business line still accounts for just 8.0% of the total.
• The remaining 4.9% is revenues from providing gaming content to B2B customers, which grew at 42.8%. The significant jump of this business line is explained by its comparatively small size, but the company has strong expectations for its potential. This account also makes the major difference between the individual and consolidated revenues.
• The implementation of a strong strategy to increase customer base in order to counter the negative effect from the global trend of decreasing the average value per customer lead to an incredible active clients increase of 46.1% with the conversion rate staying at impressive 35%.
• The churn rate marked a decrease to 4% from 7% YoY indicating greater loyalty by existing customers, where industry standards are at least double that. In an environment, where clients are highly mobile, this is indicative of the effort the company spends in expanding and training their client relationships personnel. Additionally, TIB invested in a new CRM system, which allows them to better target specific client groups.
• OPEX increased proportionately more than sales – by 33% to BGN 12.7mln. Of that, the biggest contributors are the rise in marketing – 41.7% to BGN 4.7mln, as well as fees for gaming content and software services, which together marked a 42.8% YoY rise to reach BGN 5.1mln. All these are part of the expansion strategy for the foreign markets. The other large factor in the previous quarter, bank fees, seem to have hit a plateau and is directly linked to the generated revenues. It is possible that gaming content and advertising will continue to increase since TIB will be expanding on the Peruvian market.
• The company is very liquid as cash represents 94.6% of Current Assets and 77.7% of Total Assets.
• Upon listing on the BSE, TIB announced that at least 40% of the Net Profit would be distributed as dividends. Considering the 2022 results, this would indicate 4.66% dividend yield and a payout of BGN 0.7136 per share.
• Peru expansion: certification completed, team and infrastructure setting started, final stages before launch.

Full report can be accessed here.