Asian growth boosts Gamesys Group revenue by 29% in 2020

Gamesys Group has reported a 29% year-on-year rise in pro forma revenue to £727.7m for 2020. Company adjusted EBITDA increased by 30% from £158.4m in 2019 to a 2020 high of £206.2m, a rise which Gamesys attributed to strong growth predominantly in Asia and the UK. Hailing Asia as the standout territory in the business, Gamesys confirmed a 78% full-year revenue boost to £218.3m in the region, due in part to the launch of the InterCasino in the region. The operator also highlighted an increased investment in content, marketing and customer service in the region. Meanwhile, UK revenue grew by 19% during 2020 to £423.3m on a pro forma basis, buoyed by a 24% uptick in monthly active players. Gamesys revenue from the Rest of the World segment rose 6% to £18.1m, an increase in part derived from a 25% year-on-year uptick in revenue from the firm’s US business in New Jersey. European revenue slipped 1% compared to 2019, with Gamesys referencing “continued challenges” in the Nordics and especially Sweden, where new bonus restrictions had a negative impact on performance.

The company hailed the positive launch of its Monopoly Casino brand in Spain during H1 2020, suggesting growth was “faster than we have seen from any other venture we have ever launched globally.” Following the strong performance of the business in 2020, Gamesys has committed to giving its employees a one-off grant of free shares in the business, worth an estimated £1.8m. “Despite 2020 being a year like no other, our ongoing focus on operational execution, product innovation and responsible gambling underpinned a strong performance,” Gamesys Group CEO Lee Fenton said. “We continue to go from strength to strength in Asia, while the UK delivered strong double-digit revenue growth, all set against the backdrop of ongoing enhancements to our responsible gambling approach. We also remain excited by our prospects in North America, both in the US and Canada. “Our focus on recreational customers, our differentiated brands, proprietary technology and established market positions, have attracted record numbers of players in 2020 and we believe this foundation will allow us to continue to deliver sustainable and long-term growth in the year ahead and beyond,” Fenton added. The Covid-19 pandemic saw Gamesys Group focus its efforts on responsible gambling and player protection, including a decision to cease untargeted marketing in the UK while suspending TV and radio ad campaigns. To reinforce these efforts, Gamesys has implemented a global sustainability commitment, as well as new global KPIs, known as ‘STRIPEs’. In a note, Regulus Partners analyst Paul Leyland wrote: “Creating ‘another Japan’ will be challenging (given that Japan is the world’s third-largest economy but has hitherto been serviced from an online gambling standpoint rather poorly). “Equally, the UK has both digital maturity and regulatory headwinds, although we believe that Gamesys is as well positioned as any business to manage them (mass market, strong and considered focus on social responsibility). “In this context, Gamesys’s strategic future is an interesting open question: it has all the in-house capabilities to generate global gaming growth but is currently only firing strategically on two geographic cylinders in one broad product group (casino and slots-led bingo). “In the meantime, it at least has the luxury of generating considerable cash flow; a position which might make it look increasingly attractive to businesses with a topline plan but a burning cashflow hole,” he added. Gamesys shares were largely flat this morning in early trading at 1,440p at the time of writing. In addition to the 2020 results, Gamesys chief people officer Tina Southall has been appointed to the group’s board of directors with effect from 9 March.