Gamesys lifts outlook, declares maiden dividend

Gamesys declared a maiden dividend on Tuesday as it said full-year gaming revenue and adjusted earnings were set to be ahead of its previous expectations following a strong performance in the first seven months of the year despite Covid-19.

In an update for the six months to the end of June, the online software development and gaming company said net income rose to £26.7m from £6.3m in the first half of last year, with gaming revenue doubling to £340m. Adjusted earnings before interest, tax, depreciation and amortisation rose 75% to £95m.

Revenues in the UK were up 16% year-on-year, reflecting a strong performance across all of the company’s major brands, with an acceleration of growth in the second quarter.

It also hailed a "record" performance in Asia, where revenues rose 92% year-on-year, driven by new customer growth, sustained momentum in Japan and the successful launch of the InterCasino brand.

Revenues in the rest of the world were up 2%, with the US growth of 37% through Virgin Casino and the B2B contract with Tropicana Casino. However, the company said the overall performance in ROW was impacted by the inclusion of discontinued markets, where it ceased trading in 2019.

In Europe, revenues were down 4%, with steady growth in Spain despite the introduction of restrictions on advertising and bonusing due to the Covid-19 pandemic. Germany performed strongly but the Nordics remain challenging, the company said.

Gamesys declared an inaugural interim dividend of 12p a share to be paid in October.

The company said "good" trading had continued into the early part of the third quarter across its major markets and it now expects to report FY20 gaming revenue and adjusted earnings before interest, tax, depreciation and amortisation "comfortably ahead" of its prior expectations.

Chief executive officer Lee Fenton said: "It has been very pleasing to oversee another strong half-year performance, with reported gaming revenues doubling across the group year-on-year. Our strong brands, operational control and proprietary technology have allowed us to drive growth in established markets such as the UK, while also delivering strong results in fast-growing markets in Asia and ROW.

"At the heart of this has been our commitment to responsible gambling, which was vital during a period in which many of our players were living in lockdown. As a result, we took decisive action during the period to enhance our player protection, both through investing in new capabilities and resources, and also ceasing certain marketing activities. We believe that this enlarged and highly engaged customer base will be key to driving sustainable growth in the future, positioning us well for the exciting opportunities ahead."