Directors’ report - continued
Review of the business - continued
As explained above in the previous page, the decline in revenue was primarily attributed to the decrease in
the number of white-label partners throughout the year. This reduction, coupled with lower gross revenues
for the existing white-label partners, consequently resulted in diminished revenues for the Company in the
form of reduced markups and operating fees. Revenue during 2023 was derived from; i) leasing of the
platform (turnkey services) amounting to €1,164,894 (2022: €527,890); ii) white label services amounting
to €674,204 (2022: €1,524,879).
Cost of sales amounted to €996,348 (2022: €745,275) and mainly consisted of other direct costs (including
platform costs) of €986,968 (2022: €630,188). Accordingly, whilst gross revenue decreased to €3,246,614
in 2023 from €4,467,676 in 2022, gross profit decreased to €842,750 from €1,307,494.
Administrative expenses amounted to €3,552,011 (2022: €3,403,294) and mainly consisted of depreciation
and amortisation amounting to €2,662,649 (2022: €2,581,151) and employee benefit expenses (including
director fees) amounting to €274,930 (2022: €280,732).
Finance costs amount to €740,464 (2022: €953,560), which mainly relates to the 5.9% annual interest on
the bonds issued by the Company in July 2019 net of interest income. The decrease in finance costs
compared to 2022 was attributed to the Company capitalizing on the rise in interest rates and earning
interest on the €1.8 million loan to the parent company. By strategically investing its liquidity in short-term
instruments, coupled with the interest earned on the loan to the parent company, the Company generated
positive interest, thereby reducing the interest expenses incurred.
The Company reported a loss for the year totalling €2,999,178 (2022: loss of €2,935,235), factoring in
amortization costs amounting to €2,606,212 (2022: €2,500,277).
Throughout 2023, the B2B segment faced persistent challenges stemming from ongoing regulatory
changes and heightened competition. As a result, the Company remained constrained in identifying
significant opportunities for advantageous investments in marketing initiatives to drive B2B sector growth.
Consequently, it opted to temporarily suspend investment activities until more favourable prospects
emerged within the B2B domain. Meanwhile, both the Group and the Company diligently explored strategic
alternatives to reverse this trend, ensuring concerted efforts were directed toward revenue enhancement.
To this end, management seized an opportunity early in the year to allocate investments toward
repurchasing the former Brand business. This strategic move granted the Company immediate access to
revenues derived from the newly acquired B2C assets, facilitated through its platform services. This action
resulted in accelerated revenue growth while maintaining adequate liquidity for potential future investments.
Simultaneously, Group management-initiated discussions for a strategic partnership aimed at merging with
a larger group of companies, seeking to leverage synergies and drive growth within the B2C online gaming
sector indirectly leading to further revenue growth for the Company, in the form of turnkey fees through the
provision of its platform services to the various entities within the newly formed Group. This merger reached
fruition in early January 2024.
Financial Position
The Company’s financial position is set out in the statement of financial position on page 11.
At 31 December 2023, the Company’s total asset base stood at €24,388,357 (2022: €28,875,839), of which
€9,634,003 (2022: €14,971,484) comprised cash and cash equivalents.
The main asset of the Company comprised of the technology platform (the “Platform”) which is stated at a
net book value of €7,565,357 (2022: €9,386,194) following the amortization charge for the year amounting
to €2,606,212 (2022: €2,500,277). During the year the Company invested €785,375 in the intangible asset.