Gamesys enjoys bumper H1 2020 as gaming revenue rockets 101%

Gamesys Group has reported an impressive 101% year-on-year rise in gaming revenue to £340m for the first six months of 2020.

The London-listed operator revealed a 340% jump in net income from continuing operations to £23.3m for H1, as well as a 75% spike in adjusted EBITDA, which climbed from £54.3m in 2019 to £95m.

Gamesys attributed the record performance to “continued exceptional growth” in its Asian operations, where revenue increased 92% year-on-year, driven by new customer growth, sustained momentum in Japan and the successful launch of its InterCasino brand.

The operator also highlighted strong growth in its UK brand portfolio, which rose by 16% annually, thanks in part to accelerated growth in Q2 and successful player retention during the period.

Revenue from rest of world operations remained relatively flat at 2%, due in part to the inclusion of “discontinued markets” in its 2019 financial results, markets where the group had ceased trading previously.

Revenue from the group’s US operations via Virgin Casino and its B2B contract with New Jersey’s Tropicana Casino improved by 37% year-on-year during H1.

However, European revenue fell by 4%, despite steady growth in the firm’s largest markets of Spain and Germany. The group highlighted a “challenging” H1 in the Nordics, blaming it on a business decision not to invest significantly in customer acquisition in the region during the period.

Strong group performance was mirrored in a 14% increase in the average active players per month and average real money gaming revenue per month, which further rose by 21%.

Gamesys Group executive chair Neil Goulden hailed the strong first half results amid 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,” said Goulden.

Goulden confirmed he would return to the role of non-executive chair of Gamesys Group with effect from 1 October, adding the business was in “very good hands” with CEO Lee Fenton.

Gamesys Group also revealed transition director Simon Wykes will step down from his role on 30 September following the successful completion of the Gamesys acquisition.

Gamesys Group confirmed increased investment in responsible gambling tools would continue over the coming period after the firm boosted its RG team by 30% during Q1 and ceased untargeted customer marketing to UK players during Q2.

Building on this work, the operator confirmed a 34% increase in the number of players setting deposit limits, while more than half (53%) of gaming sessions on its UK sites did not involve any form of wagering.

Gamesys confirmed that Q2 performance levels have continued into Q3 across major operating areas.

“While we remain very cognisant of the macro economic uncertainty created by the COVID-19 pandemic, our high-quality brand portfolio, operational control and proprietary technology platform leave us well placed to address the growth opportunities which lie ahead,” Gamesys said.

“Given the strong performance in the first seven months of the year, we now expect to report FY20 gaming revenue and adjusted EBITDA comfortably ahead of our prior expectations,” the firm concluded.

EBITDA (£95m) also came in far ahead of analyst expectations after Peel Hunt forecast a figure of £87m.

Analyst Ivor Jones said: The risk of regulatory change in Japan increases with its share of revenue. However, the risk of regulatory change in the UK is relatively low as a result of the mass-market nature of Gamesys’ activity here.

“These results demonstrate that Gamesys is continuing to deliver operational excellence and we reiterate our Buy recommendation and 1,200p target price.”

The operator’s share price increased by more than 6% in early trading to reach an all-time high following a 67% uptick in the year to date.