This week, Q1 financials for Inspired Entertainment were posted, showing an increase in revenue despite disruption from the ongoing COVID-19 pandemic.
Total revenue in Q1 increased from $33.7 m year-on-year to $52.3 m, mainly driven by revenue of $27.4 m from the recently acquired Novomatic Gaming Technology group. Due to the ongoing COVID-19 global pandemic and a fall in revenue on the UK LBO market, the increase was significantly offset by a lag in sales and temporary suspension of the company’s land-based operations.
The adjusted EBITDA declined from $13.7 m to $10.1mn in Q1. The impact of the global COVID-19 pandemic was greater on the adjusted EBITDA than on revenue due to the abrupt nature of the closures which, the firm said, caused it to incur substantial costs that had no associated revenue.
Lorne Weil, executive chairman, noted: “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 realized in the fourth quarter of 2019.
“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.”
A breakdown of Inspired’s key figures shows that SBG Service Revenue declined by $7.5 million, or 35.8 percent, during Q1, which is estimated to have resulted from the UK Triennial implementation and about $2.1 million from COVID-19 Closures.
SBG Hardware Revenue rose by $0.5 m, or 16.4%, led by North America’s $2.3 m volume cabinet sales. Digital sports sales dropped by $1 m or 10.1 percent, led largely by a decrease of $1 m in recurring retail revenue due to COVID-19 closures.
An increase of $0.5 million in recurring revenue from planned online virtuals and an increase of $0.4 million in recurring revenue from digital were largely balanced by a one-time change of $0.7 million for a reimbursement of traditionally underreported revenue share in the prior year.