Inspired Entertainment Inc has published its financial results for the first quarter of 2021, with Executive Chairman Lorne Weil noting the company will continue to grow in the North American market despite the impact of the COVID-19 pandemic.
Weil was also ‘encouraged’ by recent trends following the lifting of COVID restrictions despite the company reporting a net loss in the period.
Inspired has announced total revenue of $22.8m in the three-month period ending March 31, down 56.4% when compared to 2020’s Q1 revenue of $52.3m.
The company also declared a net operating loss of $12.2m (Q1 2020: $7.2m), as well as a net loss of $16.7m (Q1 2020: $9.8m). It also recorded an adjusted EBITDA of $3.9 m, down 61.5% when compared to the previous year’s $10.1m.
Inspired noted that its worldwide land-based businesses were almost entirely closed during the financial period due to the ongoing pandemic. However, its interactive and online virtuals channels continue to show growth, experiencing revenues of $10.7m, a 90.0% increase year-on-year.
Executive Chairman Lorne Weil stated: “North America continues to be a key focus of our growth strategy and our footprint there continues to expand notwithstanding COVID. We placed our first Valor terminals with Western Canada Lottery Corporation (WCLC) in March 2021 and to date, they have performed well above estate average. This stellar performance mirrors what we have seen in Illinois, where Valor continues to gain popularity.
“Our Interactive business has continued its outstanding momentum into the second quarter where our entry into Michigan demonstrates the further progress we have made in our strategic expansion into new markets. We believe we are well-positioned to bring our products to customers in the US igaming market with an impressive roadmap of game launches and high-profile partners already in place.”
Gaming revenue came in at $10.8m, a drop when compared to the $24.9m achieved in Q1 2020, while its virtual sports revenue, which no longer includes interactive but does include online virtual sports, decreased to $6.3m when compared to 2020’s Q1 of $7.8m.
Its Interactive revenue increased by 143.2% to $5.2m (Q1 2020: $2.1m) which it attributed to “the addition of new customers and territories” such as BetMGM, Gamesys, and Interwetten, and “the consistent launch of new high-quality content as well as the growing migration of end users to online platforms”.
Diving further into its interactive channel, Inspired reported the channel’s net income increased from $0.1m to $2.6m year-over-year, with operating margin growing from 2.7% to 50.0% year-over-year. Its adjusted EBITDA increased from $0.7m to $3.4m year-over-year, with its adjusted EBITDA margin increasing from 34.6% to 65.1% year-over-year.
The company’s Q1 2021 leisure revenue came in at $0.5m, down drastically compared to $17.5m achieved in Q1 2020, which it noted was due to the closure of all major sectors of the leisure segment in the UK due to the pandemic.
Weil commented: “We continue to be encouraged by the trends we are seeing across our business with the recent easing of COVID restrictions. While it has only been a couple of weeks since English betting shops reopened and we are restricted to two out of four machines per shop, our gross gaming revenue per operational machine in betting shops has performed above December 2020 levels when they were operating under the same conditions. In addition, we understand bookings for the UK holiday park business are at record levels and outdoor sales in UK pubs have been robust since reopening.”
Executive VP and CFO Stewart Baker added: “We have weathered the COVID-19 period to date and see the light at the end of the tunnel. We have effectively managed our liquidity position to be well prepared for our land-based businesses to return with a more streamlined operating structure and improved overall cost structure.
“We believe we are well-positioned to execute on our strategic plan to deliver profitable growth, increase cash flows and maximize shareholder value.”