Gamesys maintains UK growth as Euro regulatory headwinds stall performance

Gamesys Group has lauded its ability to mitigate COVID-19 complications, implementing ‘more restrictive advertising and bonusing requirements’ across its active European markets domains.

Publishing its H1 2020 interim results (period ending 30 June), Gamesys revealed that regulatory headwinds in Sweden had contributed to the decline in revenues, with implications hampering its European operations falling by 4% from £36 million to £34.4 million. 

The short-term restrictions on advertising and bonus offers in Spain were lifted in early June, which Gamesys stated they are ‘awaiting the introduction of further measures’.

Elsewhere in Europe, Gamesys predicted that it will continue to deliver good growth in Germany, while explaining that ‘the Nordics, and particularly Sweden, remain challenging and therefore we are not investing significantly in customer acquisition in this region at the present time’.

Demonstrating the growth of online gaming during the coronavirus pandemic, Gamesys recorded a significant jump in gaming revenues for its UK operations, increasing from £78 million in H1 2019 to £197.4 million in 2020. The group’s revenues from its Asian operations also increased to £98.9 million, up from £51.5 million in the corresponding period last year. 

The increases, according to Gamesys, were largely driven by ‘organic growth of the Group’s online gaming segment’ as well as the results of the Gamesys acquisition of JPJ for £490m in September.

Commenting on the results, Lee Fenton, CEO, Gamesys Group, said: “It has been very pleasing to oversee another strong half-year performance, with reported gaming revenues doubling across the Group year-on-year. 

“Our strong brands, operational control and proprietary technology have allowed us to drive growth in established markets such as the UK, while also delivering strong results in fast-growing markets in Asia and ROW. 

“At the heart of this has been our commitment to responsible gambling, which was vital during a period in which many of our players were living in lockdown. As a result, we took decisive action during the period to enhance our player protection, both through investing in new capabilities and resources, and also ceasing certain marketing activities. 

“We believe that this enlarged and highly engaged customer base will be key to driving sustainable growth in the future, positioning us well for the exciting opportunities ahead.”

Adjusted EBITDA also increased during the period, rising by 19% from £87.2 million to £103.9 million while net income rose by 68% to £68.1 million.

Average active players per month grew to 640,436 in the twelve months to 30 June 2020, an increase of 14% year-on-year.

Gamesys also noted that it would undergo a series of leadership changes from the second period of the year with Neil Goulden, executive chair of Gamesys Group, confirming that he will return to the position of non-executive.

He said: “The Group has produced a strong first half financial performance despite the clear and striking challenges posed by the COVID-19 pandemic. I would like to acknowledge the hard work and dedication of all our employees across the Group during this difficult time, without which we would not have been able to deliver a safe and enjoyable experience for our customers. 

“Having led the Group through a transformational period – one that has seen us relist on the London Stock Exchange; subsequently obtain a Premium Listing; successfully merge with and rebrand as Gamesys; become a FTSE-250 constituent; and now introduce a progressive dividend policy – I believe the time is right for me to return to the position of non-executive Chair, which will be effective from 1 October 2020. 

“Following the Gamesys Acquisition in September 2019, we now have an exceptionally strong executive team in place and have successfully integrated the two businesses and delivered strong, sustainable results. The business is in very good hands and I look forward to supporting Lee and his team going forward.”

In addition, Simon Wykes will finish his role as Transition Director on 30 September 2020 and step down from the Board. Gamesys praised Wykes’ ‘integral’ role in the team ‘that delivered the Gamesys Acquisition and has shaped the combination of the two businesses since completion’.

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