The recently-formed London-listed online bingo and casino operator Gamesys Group has reported a gaming revenue increase of 23% in the third quarter of 2019. The rise in revenue to £92.4 million is said to have been driven by the strong performance of the group’s Vera&John brand in international markets.
The brand posted a 57% year-on-year growth to reach £40.2 million, up from £25.7 million in the same quarter last year. The revenue increase is also said to have resulted from high organic growth in markets outside the United Kingdom, along with four days of trading from the recently-acquired Gamesys brands, which contributed revenue of £2.3 million.
In September of this year, JPJ Group acquired Gamesys Holdings Ltd in a deal that was worth £250 million. The acquisition subsequently created the new Gamesys Group. Due to higher gaming taxes in the UK, an increase in marketing spend, and regulatory changes in Sweden, the group ended up with an adjusted EBITDA of £25.5 million. This reflected a 4% drop and led to a 20% fall in adjusted net income, which was at £17.7 million.
Brands that have been previously acquired by Gamesys, which include Heart Bingo, Monopoly Casino, Virgin Casino, and Virgin Games recorded a 22% total revenue growth. Other than the strong international performance of the Vera&John brand, the operator also attributed its significant revenue increase to the re-emergence and renewed growth of Jackpotjoy as a result of “enhanced responsible gambling measures.” The bingo website managed to generate 56% of the group’s total revenue for Q3.
Gamesys CEO Lee Fenton says, “It is a very exciting time for all involved at Gamesys. The successful combination of two leading and complementary businesses with a unique technology offering, a strong pool of talent, and an enhanced portfolio of brands, ensures the group is in a strong position to take advantage of future growth possibilities and we are already reaping the benefits in terms of operating performance.”
The group’s Q3 results came with a whole lot of asterisks, including the sale of the Mandalay bingo brands last spring to 888 Holdings, along with the pricey addition of more original Gamesys online gambling brands. Another significant development involving the company was the withdrawal of the online casino unit of Vera&John from the tax-heavy UK market, which may have been instrumental in the growth of their Q3 sales, although profits did fall by 22% to £10.2 million.
The success of Vera&John is said to have been mainly brought about by its push into so-called grey markets such as Brazil, Germany, and Japan. The brand’s impact on Japanese shores, in particular, cannot be understated. After all, the market was responsible for 28% of Gamesys Group’s total revenue in the first nine months of the year, compared to only 12% in the same period last year. This year’s contribution from the UK market went down by ten points to 47% over the same period, while the new regulated Swedish market fell by over half to 4%.