Gamesys Group Reports Record Revenue Growth in First Half of 2020

Gamesys Group experienced a substantial surge in gaming income during the initial six months concluding on June 30th, with a doubling of earnings compared to the preceding year. This growth was primarily fueled by record-breaking revenue generated in the Asian market.

The company’s financial performance for the first half of the year demonstrated a significant increase of 100.6%, resulting in a total revenue of £340 million. Concurrently, adjusted revenue experienced a notable rise of 27.2%.

A geographical breakdown of revenue reveals that the United Kingdom contributed the most substantial share, exhibiting a year-on-year growth of 153.1%, reaching £197.4 million. Despite the impact of enhanced responsible gambling regulations implemented in 2019, Gamesys emphasized that the acquired business was bolstered by organic growth during the first half of 2020, reflected in a 15.6% increase in revenue.

The group’s revenue continued to expand despite the operator’s decision to cease non-targeted customer marketing activities in the United Kingdom at the commencement of the second quarter, encompassing all television and radio advertising. The operator transferred the sponsorship of ITV’s daily talk show “Loose Women” to Women’s Aid and made a charitable donation of £200,000 to the organization.

Gamesys has asserted that it has satisfied or surpassed the minimum standards established by the UK Gambling Commission despite a series of new rules covering player oversight, rewards, affordability, and withdrawals.

The business stated that its emphasis on providing an enjoyable experience for players has resulted in a 28% rise in chat room participation and a 53% increase in non-betting activities. During this period, the number of players setting deposit limits increased by 34%, while proactive interventions rose by 44%.

Gamesys added that on its UK website, over half of the discussions in the first half did not involve any wagering.

While Gamesys’s UK operations are performing well, Asia is the outstanding region, with revenue increasing by 92.0% year-on-year to a record £98.9 million. This was driven by new customer growth and sustained strong momentum in the Japanese market, boosted by the successful launch of InterCasino.

Gamesys develops custom products through its in-house game studio Golden Hero, while its B2B content aggregation and services division Solid Gaming continues to expand significantly.

However, Europe experienced a year-on-year decrease in revenue in the first half. The region’s contribution fell 4.4% to £34.4 million, despite stricter advertising and bonus limitations in Spain during the Covid-19 pandemic.

Gamesys launched its second brand, Monopoly Casino, in the market in June, and the company said it has witnessed “encouraging” early indicators.

Germany also experienced robust expansion during the reporting period, though Scandinavia, especially Sweden, continues to encounter difficulties. Consequently, operators are no longer investing heavily in acquiring new customers in the Nordic region.

In the end, the rest of the globe, including the New Jersey online casino industry, witnessed a substantial rise in earnings, despite a low starting point. Total revenue in this sector reached £9.3 million, more than doubling year-over-year, but grew by 2.2% on a comparable basis.

Gamesys stated that the New Jersey business accounted for the majority of revenue in the sector during the first six months of the year, achieving double-digit growth, although overall performance was hindered by the inclusion of a discontinued market in the same period last year.

Gamesys Group CEO Lee Fenton (pictured) remarked: “It is truly gratifying to observe the Group’s first-half performance once again being strong, with gaming revenue doubling year-on-year. Our robust brands, operational control, and proprietary technology have allowed us to drive growth in mature markets like the UK, while delivering strong performance in rapidly expanding markets like Asia and [the rest of the world].”

He continued: “At the core of this is our dedication to responsible gambling, which has been essential during a time when many of our players have been confined to their homes.”

As a result, to safeguard player rights, we have taken strong measures in this stage by investing in new abilities and resources, and by suspending certain marketing activities to fortify player protection.

We believe that this growing and highly involved customer base will be vital to driving future sustainable growth, allowing us to grasp opportunities in the future.

Shifting to H1 spending, following the acquisition of Gamesys, spending increased considerably, significantly expanding the scale of the business. Total cost and expenses rose by 97.0% year-over-year to £300.4 million, primarily due to a substantial increase in distribution expenses (reaching £181.3 million) and administrative expenses (reaching £107.1 million).

Adjusted EBITDA, including revenue less distribution costs impairment charges of £3 million, and administrative expenses less depreciation and amortization charges of £46.4 million, reached £103.2 million, an increase of 19.2%.

Finance costs totaled £12.9 million, after which net income from continuing operations climbed to £26.7 million from £6.3 million in H1 2019. After paying £3.4 million in taxes, and considering £6.6 million in foreign exchange losses, as well as £4.4 million in currency swap gains and £1.5 million in interest rate swap losses, the Gamesys Group’s net profit for the period was £20 million. This is a significant improvement from the total of £4 million in the previous year.

Moving forward, the enterprise stated that the combination of the Gamesys business with the JPJ Group has made “significant headway,” with its transition leader, Simon Wykes, finishing his responsibilities on September 30 and stepping down from the operator’s board.

Gamesys stated: “Simon has been a vital member of the team that finalized the Gamesys acquisition and formed the merger of the two enterprises since completion. The board expresses gratitude for his considerable contribution over the past three years and extends best wishes for the future.”

In the meantime, Executive Chairman Neil Goulden will revert to the position of Non-Executive Chairman effective October 1. He clarified that after guiding the company through a “transformative” period, he believes it is now appropriate to take a step back.

Goulden explained: “Following the acquisition of Gamesys in September 2019, we now have a very robust executive team and have successfully integrated the two businesses, delivering strong, enduring results. The company is currently in a very favorable position and I anticipate supporting Lee and his team in the future.”

Looking ahead to the third quarter, Gamesys stated that the robust first-half performance has persisted in key markets.

Despite the ongoing economic unpredictability stemming from the COVID-19 outbreak, our robust brand lineup, operational efficiency, and unique technological foundation empower us to effectively seize future growth prospects. The company anticipates that its full-year revenue and adjusted EBITDA will substantially surpass previous projections.