Gamesys hails “tremendous” 2020 in trading update as analysts raise estimates
FTSE-listed operator predicts full-year earnings at upper end of market expectations
Gamesys Group has revealed full-year 2020 revenue and adjusted EBITDA are on course to reach the “upper end” of market expectations after continued strong performance during Q4.
The FTSE-listed operator hailed an “outstanding operational performance” during the prior 12 months, as well as a renewed focus on responsible gambling and player protection during the lockdown period.
Gamesys confirmed the integration of former JPJ Group operations had not been hindered by the coronavirus pandemic, with the process completed on schedule during 2020.
“Gamesys has delivered a tremendous performance during 2020,” Gamesys Group CEO Lee Fenton said.
“Against the backdrop of a global pandemic, our relentless focus on the sustainability of our revenue streams, coupled with ensuring player and staff well-being, has positioned us well to carry our considerable forward momentum into 2021.
“We maintained strong and sustainable growth during 2020; a period in which we completed the integration of our enlarged Group, entertained record numbers of active players, and significantly enhanced our propositions and technology platforms.
“During the year, we also delivered a maiden dividend and as we enter 2021, we are in a strong position to continue to deliver growth in the business and create value for our shareholders,” he added.
City analyst firm Numis suggested upper end growth could see Gamesys revenue increase by as much as 30% during Q4.
Reiterating its Buy recommendation, Numis analyst Richard Stuber said: “With a strong, sustainable foundation for continued growth, we are confident Gamesys can sustain market-leading growth rates.
“We therefore upgrade FY21 revenue by 5% and FY22 by 8% to reflect the new FY20 base and 10% growth forecast for FY21 and FY22 (from +7%),” Stuber added.
Numis also suggested that given the consecutive above estimate growth, Gamesys would be in an advantageous position to “execute accretive bolt-on acquisitions” over the coming 12 months.
Echoing Numis comments, Peel Hunt’s Ivor Jones said he was optimistic about the firm’s potential performance during 2021 with Peel Hunt increasing its estimated FY21 EBITDA forecast to £223m (5%) and FY22 to £239m (7%).
“We believe H2 2020 initiatives such as a second brand in Japan (InterCasino) and the launch of Monopoly Casino in Spain are beginning to bear fruit,” Jones explained.
“In 2021, we expect recent investments in upgrading the technology platform for North America to begin to pay off, with market entry into Ontario a potentially important prize,” he added.
In addition, Jones suggested Gamesys would be relatively “well insulated” from forthcoming changes in UK regulation due to its low-staking, low-spending customer base.