Gamesys Asia and UK growth offsets European regulatory headwinds

Gamesys Group Plc has ‘continued to execute successfully’ across its KPIs, noting encouraging results in the UK and Asia, but it has encountered regulatory challenges in mainland Europe.

Publishing its H1 trading report, the firm revealed that ‘good momentum’ in the UK and Asia had been the primary driving force behind a 17% increase in group evenues to £398 million (H1 2020: £340m) 

The LSE online gambling group posted an adjusted EBITDA of £110 million – a 16% increase on corresponding 2020 results of £95 million. 

In the UK, group revenue rose by 20%, primarily due to the ‘strong performance’ of B2C brands such as Virgin Games, Monopoly Casino and Rainbow Riches Casino, whilst revenue derived from Asian markets rose by 30%.

Meanwhile, general key performance indicators were also achieved across multiple markets. These included an expansion on Average Active Players (AAPs) by 16% per month from 640,436 to 744,807, whilst real money revenue grew by 23% on a monthly basis from £50.9 million to £62.8 million.

Furthermore, the group has also reduced its outstanding debt by paying down £100 million, with cash balances increasing to £253.7 million at 30 June 2021, an operating cash flow of £103.5 million and cash conversion of 94% from adjusted EBITDA.

“The Group has delivered another set of excellent results for the first half of 2021 with revenue growth of 17% and adjusted EBITDA1 increasing by 16% during the period,” said Lee Fenton, Gamesys Group CEO.

“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.”

Despite maintaining its UK and Asian growth profile, Gamesys cited ‘challenging regulatory environments’ across Germany, Scandinavia and Spain – resulting in a 29% decline in European unit revenues. 

These regulatory difficulties in continental Europe meant that growth in the North American market was offset, whilst rest-of-world revenues ‘fell marginally’ by 1% year-on-year.

Gamesys maintains its 2021 agenda, which will see the LSE business merge its operating units with Bally’s Corporation, completing its £2 billion takeover announced during Q2 which it aims to formalise by end of year trading.  

It was also further explained that the Gamesys Board has reserved the right to declare an interim dividend of up to 15p for the year ending 31 December 2021, which will be paid on 15 October 2021 to shareholders on the register on 10 September 2021. 

The group’s Ordinary Shares will become ex-dividend on 9 September 2021, subject to arrangement scheme with Bally’s not coming into effect prior to this date.

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