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Positive fourth-quarter trading has helped Inspired Gaming rebound from COVID-19 headwinds, but the group continues to track market-by-market trends that affect its commercial pipeline.
Inspired disclosed in its Q4 trading statement that ‘Peak October’ trading had resulted in group sales of $72 million, up 8 percent from the equivalent Q4 2019 performance of $66 million.
Lorne Weil, Executive Chairman of Inspired Gaming said: “October was a stellar month, achieving a revenue of $21.2 million and Adjusted EBITDA of $6.8 million (32% of total revenues), results 20 percent above October 2019 and the highest monthly levels we experienced in 2020, excluding the VAT-related income.
In addition, the Nasdaq group benefited from a ‘UK LBO customer payment’ relating to a tax refund in Q4, doubling its adjusted EBITDA to $35 million (Q4 2019: $17.5 million).
Despite its strong fourth-quarter success, Inspired noted that the company’s performance was hampered by the resumption of COVID-19 venue closures, which began in November and continued into December.
UK VAT customer compensation
Inspired’s ‘Gaming’ division saw a 52 percent rise in sales to $33 million, owing largely to its UK VAT customer compensation.
Inspired, like its industry peers, was unable to stop COVID-19 headwinds, as sales from its land-based ‘Gaming Product’ unit dropped to $6 million (Q4: $11 m).
Owing to COVID-related location constraints on bars, clubs, and other entertainment companies, Inspired’s “Leisure Gaming” segment was lowered to $7.7 million (Q42019: $22 million).
Cutting group-wide operating costs
Inspired highlighted that it had cut its group-wide operating costs by $7.2 million by enforcing stringent cost management during 2020 trading.
Based on its full-year performance, Inspired’s operating sales increased by 33 percent to $200 million (FY2019: $153 million).
Meanwhile, Inspired’s Q4 performance helped the firm reverse its $13 million loss for the fiscal year, resulting in a $6 million profit.
Inspired cuts its group-wide corporate losses to $29 million (FY2019: $37 million) by closing its 2020 accounts.
Future financial accounts from Influenced will include a new ‘Segment Reporting Reclassification,’ which will give customers a clearer view of the firm’s unit results.
Weil added: “While the UK is expected to remain in lockdown through the first quarter 2021 based on the UK Prime Minister’s public statement on February 22nd, assuming achievement of key goalposts the UK will ease lockdown restrictions in stages with LBOs reopening in April, pubs and holiday parks reopening in May and an end of the lockdown by June 21st.
“By the end of the second quarter 2021, assuming the UK ends its lockdown, we would expect our UK business to be on a run rate similar to where we were in the third quarter 2020 when we generated $17.1 million6 in Adjusted EBITDA, excluding VAT-related income, at current exchange rates.”