Gamesys Q1 revenue climbs 27% as board approves Bally’s deal

Gamesys Group has continued to report strong financials in Q1 2021 after total revenue rose 27% year-on-year to £197.8m.

In a trading update, the FTSE 250 operator highlighted ongoing “strong growth” across its two most significant operational markets of the UK and Asia.

“Cash generation continues to be a standout feature and deleveraging has continued into 2021 to further underpin our robust balance sheet,” Gamesys said.

Addressing Gamesys Group’s growth trajectory, CEO Lee Fenton commented: “Our ongoing focus on operational execution, product innovation and enhanced safer gambling has continued into 2021, culminating in another strong performance in Q1.

“Our talent base continues to grow, our technology continues to evolve and we are always learning how to serve our players with a better, fully personalised customer experience, all of which gives the board confidence in our ability to drive long-term sustainable growth,” Fenton added.

Elsewhere, Gamesys Group’s board of directors will unanimously recommend the approval of a £2bn takeover offer from US casino giant Bally’s Corporation, as first revealed in March.

Fenton, who will become CEO of the combined group, voiced his support for the deal as the operator looks to make significant inroads in the high-growth US gambling market.

“After more than two decades honing our craft in online gaming, this combination would give all at Gamesys an opportunity to fully leverage the technology, product and know-how we have developed in what will become the largest regulated online gambling market in the world,” he explained.

“I believe the highly complementary nature of our companies and the common history of being highly cash generative will leave us uniquely positioned for success,” Fenton added.

The board highlighted the “compelling strategic and financial rationale” behind the deal, as well as the long-term benefits of combining resources.

“Gamesys would benefit from Bally’s fast-growing land-based and online platform in the US, providing market access through Bally’s operations in key states as the nascent igaming and sports betting opportunity develops in the US,” said the Gamesys board.

“Bally’s would benefit from Gamesys’ proven technology platform, expertise and highly respected and experienced management team across the online gaming field.

“The combined group would be well positioned to capitalise on the full range of opportunities available both in the US and beyond,” the board added.

Under the terms of the deal, Gamesys shareholders can receive either 1,850p in cash for each Gamesys share or 0.343 in new Bally’s shares.

In support of the bid, Gamesys directors and senior shareholders accounting for 33.3% of the firm’s issued share capital have irrevocably undertaken to vote in favour of the Bally’s deal at the forthcoming shareholder vote.

A positive vote of 75% is required to push the deal over the line.