Inspired Q1 up due to gaming acquisition

Inspired Entertainment yesterday reported financial results for the first quarter ended March 31, 2020.

Total revenue increased to $52.3m, from $33.7m during the first quarter of 2019, primarily driven by $27.4m in revenue from the recently acquired Novomatic Gaming Technology Group.

However, this increase was significantly offset by the lag in sales and temporary suspension of the company’s land-based business due to the ongoing Covid-19 global pandemic and the decrease in revenue in the UK licensed betting office market primarily caused by the reduction in maximum B2 stakes to £2 implemented on April 1, 201.9 

Adjusted EBITDA1 decreased to $10.1m from $13.7m during the first quarter of 2019. First quarter 2020 results included $2.8m from the acquired businesses (in its seasonally weakest quarter as leisure parks are closed in the winter months throughout the UK estate). 

The impact of the Covid-19 global pandemic was greater on adjusted EBITDA than it was on revenue due to the abrupt nature of the closures, which caused the company to incur significant costs which had no associated revenues.

“The year got off to a strong start, building on the momentum from outstanding organic growth, increased profitability across our businesses and better-than-expected initial results from our transformative acquisition which we realised in the fourth quarter of 2019,” said Lorne Weil, executive chairman of Inspired. 

“However, the Covid-19 global pandemic resulted in the temporary closure of the land-based retail businesses of our customers with continuation of many of the associated expenses, which had a material negative impact on our first quarter results.”