UK and Asia growth pushes revenue up 17.3% at Gamesys in first half

Revenue for the six months to 30 June amounted to £398.8m (€470.3m/$552.1m), up from £340.0m in the corresponding period last year.

The UK remained Gamesys’ primary source of income, with revenue rising 20.2% year-on-year to £237.3m. Gamesys said this growth was driven by strong performance from its Virgin Games, Monopoly Casino and Rainbow Riches Casino brands.

The group also saw revenue in Asia increase by 29.4% to £128.0m as it continued to grow its presence across the region, but more challenging regulatory environments within Germany, Scandinavia and Spain saw European revenue fall 29.4% to £24.3m.

Rest of world revenue edged down 1.1% to £9.2m as growth in North America was offset by a contraction in other smaller markets where Gamesys operates.

Turning to costs and overall expenses were up 18.5% at £355.9m as Gamesys noted higher spending across distribution, administrative and transaction activities. However, such was the impact of revenue growth in H1 that adjusted earnings before interest, tax, depreciation amortisation (EBITDA) climbed 16.1% to £110.3m.

Gamesys also reported £10.5m in financing costs, the majority of which (£10.1m) came from interest expenses, which left a pre-tax profit of £32.4m, up 21.4% year-on-year.

However, after taking into account £18.4m in tax payment, significantly more than £3.4m in the first half of 2020, Gamesys ended the period with a net profit of £14.0m, down 39.9% year-on-year.

“The group has delivered another set of excellent results for the first half of 2021 with revenue growth of 17% and adjusted EBITDA increasing by 16% during the period,” Gamesys chief executive Lee Fenton said. 

“This performance reflected significant double-digit revenue growth in our key markets of the UK and Asia and our continuing strong cash flow has seen leverage reduce further. 

“We are fully focused on operational execution, product innovation and the enhancement of safer gambling initiatives across all of our markets and we remain fully confident in the Group’s ability to deliver long-term sustainable growth.”

Gamesys is currently in the process of merging with Bally’s Corporation, in a deal that the two businesses said would create a leading retail and online gambling group in the US and beyond.

Agreed in March, the mega-merger agreement is worth £2.00bn, with Bally’s, via Premier Entertainment, pay 1,850 pence per Gamesys share. This represents a 14.4% premium on the Jackpotjoy operator’s closing share price of 1,642 pence per share on 23 March, the final day before an announcement on talks were made. 

In June, shareholders in Gamesys and Bally’s voted to approve the mega-merger, with the deal set to close in the fourth quarter of this year, subject to the sanction by the court at the court hearing as well as other conditions being met.

Yesterday, Bally’s reported its own results. It recorded net profit of $68.9m for the second quarter of 2021, marking a significant increase when compared to the same period last year.