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Inspire revenue increases in Q4 while business losses increase

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In Q4 2021, Inspired generated $67.0m in revenue (PS51.2m/EUR61.0m), with all segments experiencing growth greater than 25%. However, the company’s bottom line in 2020 shifted to a deficit after receiving a tax rebate.

The revenue was 70.9% higher than the 2020 ordinary operating revenue, however it was lower by 6.6% when the VAT refund during the same period was included.

Gaming segment, which includes land-based slots, was the biggest contributor of revenue. It brought in 26.8m dollars, up by 49.3%.

The fastest growth was in the leisure sector, where revenue grew by 183.4%, to $23.5m.

The virtual sports revenue was up by 26.1%, to $11.0m. Interactive gaming revenue was also up, growing 35.8%, to $5.7m.

The gaming division received an additional $32,5m in value added tax (VAT), after a ruling by a federal court determined that the operators were not required to pay the VAT over and above the taxes on gaming machines. This amount was not included as revenue during the Q4 2020 quarter. The business stated that if this amount had been added to the 2020 numbers, revenue might have decreased slightly.

The fourth quarter of 2018 was a good one for Inspired. We were able, organically, to grow our top and bottom lines by double digits, without the VAT impact.

Our results for the past year demonstrate our capability to achieve sustainable growth and profitability.

The consistent growth we have seen throughout the year 2021, the demand for each of our product lines and industry forecasts from Covid-19, as well as the sustainable online growth trend, all support the confidence that the company has in its long-term prospects.

It did not disclose its costs, but stated that the business’s earnings (EBITDA for Q4) were $22.0m – 37.0% lower than Q4 2020. The total was $8.5m, with $8.5m coming from gaming. Another $8.5m comes from virtual sports. $2.6m is interactive, and the remaining $6.3m is leisure.

Inspired’s net loss was $1.2m after a depreciation charge of $10.8m, interest costs of $6.4m, stock-based compensation of $4.4m, and $2.9m on the fair value change of warrants. This loss is partially offset by an $1.5m benefit from tax. The Q4 profit for 2020 was $3.1 million.

In 2021, the total revenue was $208.9m. This is 4.6% higher than it was in 2020.

It did not break out its revenue by type, but it did mention that virtuals and igaming accounted for $26.0m of the total.

EBITDA was $64.0m with virtual sports as the leading contributor.

Depreciation, amortisation and interest costs totaled $47.0m. Stock-based compensation costed $13.0m. The business, along with a few smaller, non-operating expenses, made a loss of $36.7m.

In Q4, Inspired entered the lottery world by purchasing Sportech’s Lottery Technology Division for a consideration of $12,5m (£9.3m/€11.1m).

Weil revealed the company has been granted a license to sell its games when Ontario opens up its online gaming market, which is scheduled for 4 April.

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