Laurence Escalante’s Virtual Gaming Worlds most valuable tech ‘unicorn’ after posting huge $454m profit
The social gaming company founded by billionaire Laurence Escalante posted a $454m profit, and said it would pursue a listing in the US over the ASX.
Young billionaire Laurence Escalante’s Virtual Gaming Worlds is Australia’s most profitable technology “unicorn” after unveiling a huge financial result.
The privately-held VGW, an online social gaming business that has almost all of its customers in North America, made a huge $454m net profit in the 2022 financial year, according to documents sent to its shareholders on Tuesday evening.
VGW’s profit was up 54 per cent from the $294.7m result in 2021, while revenue rose 55 per cent from about $2.22bn last year to a record $3.46bn.
Mr Escalante’s company is now considered the sixth largest private company in Australia based on annual revenue.
Its latest financial result also makes VGW one of the most profitable locally owned private companies in Australia, with the result being considerably higher than established businesses such as Linfox, 7-Eleven, Kennards Hire and Competitive Foods.
A note sent to VGW shareholders, seen by The Australian, shows the company recording pre-tax profits of $604.1m in the year to June 30 and spending about $235m on marketing.
Mr Escalante, 40, worked at Hungry Jack’s as a teenager and started VGW from shared office space in Perth in 2010.
He has about a 65 per cent shareholding in the privately held public unlisted company, which accounted for the bulk of his $2.99bn estimated wealth on this year’s edition of The List – Australia’s Richest 250.
VGW’s most recent financial results showed the company paid out $111m in dividends in March and then $132m in August. It said it was considering another dividend before the end of the year, and potentially a share buyback that it could raise a “moderate amount of debt” to pay for. Management said it does not require additional funding but “does recognise the potential benefits” in providing liquidity to its shareholders.
It said an “IPO was the most likely path” to that liquidity and that a “North American listing … is now far more likely than the ASX”.
Shareholders can access some liquidity via an over-the-counter trading platform at Primary Markets.
VGW’s customers play social casino virtual games such as its Chumba Casino suite of online poker machine, poker and blackjack table games, and Luckyland Slot. The customers pay real money to buy virtual coins.
VGM operates under a sweepstakes model that gives users the chance to win promotional sweepstakes that can be redeemed for cash.
The company is also developing a range of casual non-casino-themed social games.
Management said it had begun the 2023 financial year strongly. Revenue in July was up 42 per cent on the previous corresponding period and August revenue rose about 43 per cent.
Mr Escalante has started making investments outside of VGW, including recently taking stakes in software business icetana and automotive news and reviews website CarExpert.
His fast car passion has seen him invest in a car modification business, Beyond Custom, and training and coaching business Arise Racing.
More Coverage
Why RBA’s cut will take longer than you think
Even news that headline inflation is back within the 2-3 per cent target band won’t be enough for the RBA to cut rates.
The Australian wins big on excellence at News Awards
Journalists at The Australian have scored a raft of wins at the 20th annual News Awards, celebrating News Corp Australia’s most talented journalists, photographers and cartoonists.