Strong second quarter helps Aspire to H1 revenue growth

Online gambling solutions provider Aspire Global reported a 17.4% rise in revenue in first half of the year, following a record second quarter.

Revenue in the six months to 30 June amounted to €77.4m (£70.1m/$91.6m), up 17.4% from €66.0m in the corresponding period last year.

Aspire’s B2B division generated €53.1m in net gaming revenue – excluding inter-segment revenue – which represented a 32.6% year-on-year increase.

The provider put this partially down to the impact of the acquisition of Pariplay, which it purchased in October 2019. As of January this year, Pariplay is reported in a new B2B sub-segment.

Pariplay signed content deals with the likes of BetVictor and Caliente.mx, Mexico’s largest sportsbook and gaming operator, in H1, while its games were certified in Switzerland.

The division also secured a number of new clients during the first half, with 82 B2B brands and 47 partners operating on its platform by the end of the period.

However, in contrast, B2C revenue was down by 9.6% from €27.0m to €24.4m. Aspire looked to enhance its customer-facing activity towards the end of the period with the launch of new sports betting feature KarambaBattle, which offers tournaments covering all major sports.

In terms of geographical performance, Aspire saw growth across all regions, with the exception of the Nordics, where revenue was down 34.3% year-on-year to €8.8m.

UK and Ireland revenue jumped 52.6% to €14.8m, while revenue for the rest of Europe climbed 20.5% to €49.4m, the largest regional contribution for the period. In addition, rest of world revenue rocketed by 131.6% – though from a low base – from €1.9m to €4.4m in H1.

Looking at spending for the half, total operating expenses came in at €62.5m, up 20.0% year-on-year. Distribution expenses were by far the main outgoing for Aspire, with spend here climbing 22.4% to €52.4m due to the consolidation of Pariplay and increased partner royalties.

Administrative costs jumped 18.4% to €8.3m, but gaming duties were down from €2.4m in H1 of 2019 to €1.9m this year.

This meant Aspire’s earnings before interest, tax, depreciation and amortisation (EBITDA) reached €12.3m, marginally higher than €12.1m in the same period last year. After including €2.7m in depreciation and amortisation costs, this left an operating profit of €9.6m, which was 6.8% lower than in 2019.

When accounting for other expenses – including €3.3m in finance spending and €1.2m in interest and foreign exchange costs – this meant profit before tax was €7.6m, down 21.6% year-on-year.

Aspire paid €580,000 in income taxes and after also including €479,000 in other losses related to the share in the results of associated companies, this resulted in €6.5m in net profit, down 19.8% on last year.

Chief executive Tsachi Maimon (pictured) said he was pleased with the results, pointing out that Aspire had been able to cope well with the disruption caused by the novel coronavirus (Covid-19) pandemic.

“The first half year of 2020 has been very special for everyone,” he said. “One of our conclusions from the pandemic is that Aspire Global was able to swiftly adapt to dramatic changes in society.

“We were successful in securing business continuity during the pandemic and to continue the execution of the growth strategy, capitalising on our broad igaming offering,” Maimon explained. “Growth through acquisitions is another key part of our strategy and Aspire Global’s strong financial standing gives us the possibility to actively search for operations that can further strengthen our position in the igaming industry.”

Looking more closely at the second quarter, revenue was up 33.5% year-on-year to a record €43.7m, with B2B revenue rising 51.7% to €32.6m and B2C revenue 1.2% to €13.4m.

Aspire said that overall growth was mainly driven by good business momentum, helped by its broad igaming offering and market knowledge. In Q2, Aspire said its segments also benefitted from players’ increased interest in igaming during the pandemic.

Operating costs increased 36.1% to €35.1m, which meant EBITDA amounted to €7.1m, up 16.4% year-on-year and another quarterly record. Depreciation and amortisation spend totalled €1.4m, which left Aspire with €5.7m in operating profit, up 11.8% on last year.

After including other expenses, profit before tax stood at €4.8m, which was 6.7% higher than last year. Aspire paid €316,000 in tax and also recorded €292,000 in losses related to the share in the results of associated companies, meaning its net profit reached €4.2m, up 5.0% year-on-year.

“Revenues and EBITDA reached all-time high in Q2 2020 and we strengthened our position as the leading igaming supplier,” Maimon said. “The strong development is reflecting a continued good business momentum as well as players’ preferences during the pandemic to choose online entertainment over land-based.”

In terms of Aspire’s current performance, its total trading volume for July was €13.1m, around 19.0% higher than the average monthly trading volume in Q3 2019. This, Maimon said, is reason to be positive about is growth prospects for the rest of the year.

“We will continue to grow by winning new partners, entering new markets, enhance the offering and look for M&A opportunities,” Maimon said. “Thanks to our competitive offering and good business momentum we are confident in our ability to deliver on our 2021 financial targets and to further strengthen Aspire Global’s position as the powerhouse for igaming operators.

“I’m truly excited by Aspire Global’s future prospects.”

Image: Aspire Global