Every week, CasinoBeats breaks down the numbers behind some of the industry’s most fascinating stories. A heap of financial results from the likes of Flutter, evoke and Mohegan feature in this week’s round-up, alongside an update from Evolution on the strikes in Georgia.
$3.6bn
Flutter Entertainment declared total group revenue for Q2 of $3.6bn in its latest financial results, up 20% YoY and 22% in constant currency (Q2 2023: $3bn).
The operator also noted that the addition of MaxBet in Q1 added $52m to group revenue growth YoY, while average monthly players grew by 17% YoY to 14.3 million (2023: 12.2 million).
Excluding US operations, group revenue improved by 10% in comparison to the same period the previous year and by 11% in constant currency to $2.1bn (2023: $1.9bn).
Net income rose by 364% YoY to $297m (2023: $64m) with a margin of 8.2% (2023: 2.1%). This was also a rebound from a net loss of $177m reported by the operator in Q1.
Flutter attributed the growth to the aforementioned segment performances, as well as “after the non-cash impacts of a gain in the fair value of the Fox Option liability of $91m (Q2 2023: $53m loss) and a charge relating to the amortisation of acquired intangibles of $147m (Q2 2023: $195m)”.
The group’s adjusted EBITDA rose by 17% YoY and 19% in constant currency to $738m (2023: $633m) with a margin of 20.4% (2023: 21.1%), reflecting “strong revenue performance and ongoing adjusted EBITDA margin expansion in the US”.
Excluding US operations, adjusted EBITDA grew by 4% YoY and 6% in constant currency to $478m (2023: $461m), primarily driven by a “weaker racing market in Australia”.
Net cash provided by operating activities improved by 688% YoY to $323m (2023: $41m), while free cash flow rose as well in comparison to the same period last year to $171m (2023: negative $95m).
Flutter noted that the improvements were due to the continuation of a “good conversion of operational performance to cash” as well as a “lower cash flow during Q2 2023 driven by the large payout within player deposits relating to the record Sisal lottery jackpot, which was partly offset by a cash receipt on settlement of derivatives in the same period”.
£143m
Challenging UK retail headwinds were cited by evoke as the reason for its year on year decline in Q2 of 2024 as overall H1 losses increased to £143m (Q22023: £32m).
Meanwhile, the organisation reported revenue of £862m for H2 as a whole, showing a decline of 2% year-over-year but up 4% sequentially on H2 2023.
UK retail falling by 8% was largely cited as a key contributing factor behind the decline, as the firm admitted the retail gaming offering of William Hill had fallen behind competition.
Furthermore, management expectations were met when it came to H1 Group revenues, which amounted to £862m (H1 2022: £881m). However, group accounts detailed double-digit adjusted EBITDA declines across all core business segments.
Group CEO, Per Widerström, stated: “The return on our marketing – primarily in UK Online – was lower than expected, leading to an online marketing ratio of 25%, which was higher than planned. We have put in place a new and experienced commercial leadership team and marketing leadership team, and we are transforming the way we plan and undertake our marketing.
“The corrective actions we have already taken give us even more confidence that our strategic approach is sound and that we will achieve sustainable success.”
21.4%
Mohegan reported its “highest quarterly net revenues after witnessing a 21.4% YoY increase in net revenues to $504.2m (Q3 2023: $415.4m).
CFO Ari Glazer attributed the improvement primarily “to continued growth in Mohegan Digital and revenue from Mohegan INSPIRE”.
Income from operations dropped by 12.1% in comparison to the same period the previous year to $72.4m (2023: $82.4m). The operator also reported a net loss of $29.9m (2023: $50.6m net income) and an adjusted EBITDA of $104.7m, down 3.6% YoY (2023: $108.7m).
As of 30 June, Mohegan held cash and cash equivalents of $180.9m (30 September 2023: $217.3m).
Glazer commented: “Consolidated adjusted EBITDA of $104.7m decreased $3.9m compared with the prior-year period, primarily due to operating costs related to the opening of Mohegan INSPIRE and non-controlling interest adjustments at Niagara Resorts, offset by strong growth in our digital operations.’
£734m
Rank Group’s 2023/24 financial results revealed that it is delivering on its strategic plan as underlying net gaming revenue rose by 9% year-over-year to £734.4m (2022/23: £671.4m).
Both venues and digital NGR improved year-over-year. Venue underlying NGR improved by 8% in comparison to the previous year to £508.4m (2022: £468.8m) while digital underlying NGR increased by 12% to £226m (2022: £202.6m). In Q4, NGR improved by 14% YoY.
As a result, underlying operating profit had a 131% uptick YoY to £46.5m (2022: £20.1m), which Rank says was “slightly ahead of analysts’ consensus” and reflected “significant operating leverage in the business”. Operating profit improved in H2 to £24.8m compared to £21.7m in H1.
Employment costs increased by 11% YoY too for the group due to “wage inflation and the reinstatement of colleague bonuses”. The firm expects this to continue to be a key headwind in 2024/25 and rise by a further 7%.
Net free cash flow stood at £26.6m (2022: £17.9m loss) and net cash pre-IFRS 16 was £20.9m (2022: £5.9m debt). Following investments in venues and proprietary technology, total capital expenditure was £46.7m, while the group expects the figure to be around £60m for 2024/25.
1,000
Ongoing strikes at Evolution’s Georgia offices have caused the igaming supplier to respond by laying off 1,000 employees.
“This regretful decision was not taken lightly,” Evolution said when announcing the redundancies via its Facebook page.
“It is a direct consequence of the union’s unlawful actions and its negative impact on Evolution’s operations in Georgia, and the damage it has caused on Evolution customers’ view of Georgia.
“The recent illegal actions initiated by one of the local unions have hindered Evolution’s ability to operate in Georgia and has hurt Evolution’s customers, many of which now no longer wish to operate their tables from Georgia,” Evolution’s statement read.
Evolution referred to the impact strike action has had on the company’s relationship with clients as “permanent damage”, specifically naming the strikers’ illegal blockade as a reason for the permanent workforce reduction.
In a reassessment of its presence in Georgia’s capital, Evolution will move “most of its customer-specific tables to its other studios worldwide”, with the dismantling and removal of its clients’ tables having already begun.
