iGB Intelligence reports iGB-Market-Monitor-May-2020-proof4 | Page 9

Part 1: The UK – Covid-19 compounds contraction released in late April, Gamesys said that the UK had produced a “solid performance” in the first quarter. Total group revenues rose 19% over the first three months of 2020 to £155.2m; based on the 2019 share of revenues from the UK of 63% it would suggest that UK revenues in the first quarter came to approximately £98m. While the company acknowledged that the current crisis presented a “unique set of challenges”, the company pre-empted the BGC ad ban by saying it had “suspended untargeted customer marketing”, as well as ceased all TV and radio advertising until the current restrictions are eased. Gamesys gave some interesting insight into how players are reacting to the current climate. It said that since the lockdown began, player engagement in chat rooms had risen by 38%, while there had also been a 10% rise in nonwagering sessions across its UK sites. In response, the company is now providing 10 hours of free bingo every day. Analysts at Numis said Gamesys was “in a sweet spot” given its lack of exposure to retail and (at present at least) sports betting. It estimated that UK growth was mid-single digit, a trend which had continued into the second quarter despite the lockdown. Rank – material impact If it wasn’t for the recent actions of Rank’s newish chief executive John O’Reilly to turn around and augment via acquisition the digital side of the Rank business, Rank would be in a whole world of trouble right now. The largest land-based casino and bingo operator in the UK, the company has seen all of its venues closed under the current lockdown. With little prospect of there being any business as usual for the rest of this year, the company spoke in its 20 April trading statement about the various mitigation efforts designed to limit the monthly cash outflows to £10m as of May onwards. The good news from Rank came with the digital business and specifically the UK-facing Grosvenor Casinos and Mecca Bingo brands. The first saw its NGR rise 27% in the company’s third quarter, while Mecca Bingo was up 20%. The company noted that 44% of Grosvenor’s NGR came from multi-channel customers and certainly Rank will be hoping it can both keep hold of these customers and persuade them to return to its venues in the future. There was better news, as well, on the Stride acquisition that was completed in October last year. Like-for-like revenues from Stride were up 3% after revenues fell 9% in the first half. The company said at the time of its first-half results in January that it hoped a transformation of the business would see it return to growth in the second half, which it has duly achieved. Flutter Entertainment – stars aligned There are probably better times to be completing a major acquisition, but Flutter Entertainment will still have been celebrating receiving the official sign-off on its deal with the Stars Group from the Competition and Markets Authority (CMA) in the UK in late April. Table 4: Rank selected 3Q20 figures Grosvenor digital revenue growth rate (%) Mecca Bingo online revenue growth (%) Stride LFL revenue growth (%) Source: Company reports 27 20 3 Table 5: Flutter 1Q20 trading statement selected figures Sports revenue (£m) Sports yoy rise (%) Gaming revenue (£m) Gaming yoy rise (%) Source: Company report 407 13 140 25 iGB Market Monitor • The UK and Sweden • May 2020 6