Gamesys Group, now expanded, witnessed a doubling of its gaming income in the six-month period ending on June 30, propelled by record earnings in Asia.
Gamesys Group’s income surged by over 100% to £340 million in the initial six months of the year. Incorporating Gamesys’ performance in JPJ Group’s financial reports following the acquisition, the growth was 27.2%.
The United Kingdom emerged as the largest market, with income escalating by over 150% annually to £197.4 million. Despite the group’s UK operations being influenced by stricter gambling regulations in 2019, Gamesys indicated that the acquisition was facilitated by organic growth in the initial half of 2020, with income increasing by 15.6%.
The growth transpired even though the firm ceased untargeted marketing in the UK at the commencement of the second quarter, encompassing all television and radio advertisements. The company transferred the sponsorship of ITV’s daily talk show “Loose Women” to Women’s Aid and contributed £200,000 to the charitable organization.
A gaming enterprise, Gamesys, has declared that it has achieved or surpassed the minimum criteria established by the UK Gambling Commission, despite the recent implementation of new rules governing player oversight, incentives, financial capacity, and withdrawals.
The firm expressed its dedication to providing a recreational entertainment experience for participants, resulting in a 28% increase in chat room interaction and a 53% surge in non-wagering activities. During this period, the number of participants setting deposit limits rose by 34%, while proactive interventions increased by 44%.
Gamesys added that on its UK website, “more than half” of conversations occur without any wagering in the initial six months.
While Gamesys’ UK operations are performing well, Asia stands out as a prominent region, with revenue soaring 92.0% annually to a record £98.9 million. This was driven by new customer growth and sustained momentum in Japan, fueled by the successful introduction of InterCasino.
Gamesys develops custom products through its internal game studio, Golden Hero, while its B2B content aggregation and services division, Solid Gaming, continues to experience robust growth.
However, European revenue decreased year-on-year in the first half. Despite Spain’s sustained growth under stricter advertising and bonus restrictions during the COVID-19 pandemic, the region’s contribution fell 4.4% to £34.4 million.
Gamesys launched its second brand, “Monopoly Casino,” in June, which has exhibited “promising” initial signs.
Germany also witnessed robust expansion during the reported timeframe, even though the Nordic region, particularly Sweden, continues to grapple with difficulties. Consequently, operators are no longer pouring significant resources into customer acquisition within the Nordic region.
Overall, other segments, including the New Jersey online gambling enterprise, exhibited robust same-store sales growth, despite a modest starting point. Total income for this segment reached £9.3 million, more than doubling year-over-year, but expanded by 2.2% on an adjusted basis.
Gamesys stated that the New Jersey business accounted for the majority of revenue within the segment in the first half, experiencing double-digit growth, although overall performance was hindered by the inclusion of terminated markets in the equivalent period last year.
“It’s incredibly gratifying to observe another strong six-month performance with group gaming revenue doubling year-over-year,” remarked Gamesys Group CEO Lee Fenton (pictured). “Our robust brands, operational control, and proprietary technology have empowered us to propel growth in mature markets such as the United Kingdom, while concurrently delivering strong performance in rapidly expanding markets in Asia and [the remainder of the world].”
“At the core of it all is our dedication to responsible gambling, which has been essential during a period when many of our players have been confined to their homes,” he added.
Consequently, we took decisive action during this time frame to bolster player protection by allocating funds to new abilities and resources, as well as decreasing certain marketing endeavors.
We are confident that this expanded and highly engaged clientele will be crucial in driving future sustainable growth, allowing us to capitalize on upcoming opportunities.
Shifting our focus to H1 expenditures, following the Gamesys acquisition, spending increased considerably, leading to a significant expansion of the business. Total costs and expenses rose by 97.0% year-over-year to £300.4 million, primarily driven by a substantial increase in distribution costs (to £181.3 million) and administrative expenses (to £107.1 million).
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached £103.2 million, an increase of 19.2%, encompassing revenue less a £3 million impairment charge on allocation costs, and administrative expenses less £46.4 million for depreciation and amortization.
Finance costs amounted to £12.9 million, and subsequently, net income from continuing operations rose to £26.7 million from £6.3 million in H1 2019. After paying £3.4 million in taxes, and taking into account a £6.6 million currency exchange loss, as well as a £4.4 million currency swap gain and a £1.5 million interest rate swap loss, Gamesys Group’s net profit for the period was £20 million. This signifies a substantial improvement from the £4 million total in the preceding year.
Moving forward, the firm stated that the amalgamation of its Gamesys division with the JPJ Group has made “substantial progress,” with its transitional leader Simon Wykes concluding his responsibilities on September 30 and resigning from the operator’s board.
Gamesys declared: “Simon has been an essential member of the team that finalized the Gamesys takeover and molded the merger of the two enterprises since completion. The board expresses gratitude for his tremendous contribution over the past three years and wishes him well in the future.”
In the meantime, Executive Chairman Neil Goulden will revert to the position of Non-Executive Chairman from October 1. He clarified that after guiding the company through a “transitional” phase, he believes it’s time to step back.
Goulden explained: “Following the acquisition of Gamesys in September 2019, we now possess an exceptionally robust management team and have successfully incorporated the two businesses, attaining strong, sustainable outcomes. The company is currently in a very favorable position, and I anticipate supporting Lee and his team in the future.”
Looking toward the third quarter, Gamesys stated that robust H1 performance persists in key markets.
Despite the ongoing economic instability caused by the COVID-19 outbreak, we remain alert. Our robust brand lineup, efficient operations, and cutting-edge technology platform empower us to capitalize on future growth prospects. The operator stated that due to these strengths, the company anticipates its annual revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to surpass prior projections considerably.
Picture: Gamesys Group
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