Gamesys annual profits drop 16% following US and poker investment
Operator's financial report for year ended 31 March 2014 shows profits dip despite 10% increase in turnover to £199.3m
Gamesys said operating profit for the year ended 31 March 2014 fell 16% to £48.5m as the firm continues to invest in new verticals and growing its US business, according to the group’s annual accounts.
The 12-month filing showed Gamesys’ turnover increased 10% to £199.3m from £181m in 2012-2013, driven by growth in both the UK and Sweden, with both Virgin Games and it new slots-focused brand Starspins showing a “pleasing performance”.
Wagering rose 10% year-on-year to £4.9bn respectively, but EBITDA dropped 11% to £53.1m as the firm felt the impact of both its loss making US business and investment in new verticals and technology.
“Our top line revenue continued to grow and the decline in profits is a result of our continued commitment to develop new and unique ways to entertain our players and grow our geographic footprint by launching in the US,” Gamesys COO Lee Fenton, told eGaming Review.
Staff numbers increased 27% to 822 during the period, with 108 new technical staff, as the firm continues to invest in new verticals including poker and its growing social gaming business.
In the US, where the firm has partnered with land-based operator Tropicana in New Jersey, Gamesys said it expected to make a loss up to the year ended 31 March 2015 despite claiming around 20% of the total online market.
While its online casino brands – including VirginCasino.com and TropicanaCasino.com – are said to be performing well, Gamesys has yet to launch its hotly anticipated poker platform in the US market and Fenton said a launch in the short term was unlikely.
“We have been pleased with our progress there [New Jersey] where we have grown through 2014 to command a healthy share of the Casino market,” he said.
“We have no current plans to launch poker in New Jersey as the market size for poker does not look attractive today. We continue to invest in the product and will deploy in markets as and when they are looking attractive to enter,” he added.
The firm also noted its decision to close its real-money Facebook platform in May following a “disappointing performance” while the report confirmed it had shuttered its Italy-facing business in September.
But the firm added its operations in Spain continued to perform “satisfactorily” despite the absence of slots, which are set to be licensed later this year.
Gamesys is currently in talks to sell “key assets” of the business to Toronto-based Intertain, as revealed by eGaming Review in December.
Fenton declined to comment on the prospective deal.