Sparks - Bally’s Intralot

evoke, which is subject to a recommended acquisition by Bally’s Intralot, has released H126 results. The results show the impact of increases in gaming duties in a number of countries, notably the UK and Italy, which led to a £15.7m or 10% decline in adjusted EBITDA. Management was able to mitigate the higher gaming duties of £46m, which were in line with their expectations, with marketing efficiencies and cost savings.

Group revenue grew by 2% on an underlying basis or was flat on a reported basis. Online grew by 1%, with all of the growth coming from UK and Ireland, while International declined overall. The performance in International markets was mixed with strong growth in Italy and Denmark offset by declines in Spain (more competitive market following regulation changes in FY25 that have necessitated investment), Romania (attributed to weak macroeconomic backdrop, duty increase and leakage to unregulated markets) and Rest of World. Retail revenue declined by 4% on a reported basis as a result of store closures; however, management believes the rollout of new machines etc helped to drive above-market underlying growth of 4%.

Adjusted EBITDA declined by 10% to c £150m. Online was broadly flat despite the increase in gaming duties. There was a broad divergence in performance, with the UK and Ireland increasing by 28% and International declining by 20%. Management claims to have offset more than half of the increase in gaming duty in the UK, which came into effect on 1 April, so H126 doesn’t reflect the full impact of the duty increase. International profits fell as a result of the mixed revenue trends between the countries, higher duties and mix shifts to lower margin countries. The positive effect of closing lossmaking stores is reflected in the 5% increase in Retail’s adjusted EBITDA. There was a significant increase in central costs from c £9m in H125 to £26m in H126, primarily due to staff bonus accruals versus none in the previous year as well as timing of balance sheet movements.

There was no comment on current trading beyond stating the FIFA Word Cup had exceeded expectations. The group knockout games, which fell in the period, were described as customer friendly, whereas the later stages were described as more operator friendly.

The recommended acquisition remains subject to relevant shareholder, regulatory and other approvals. Completion is expected for Q426/Q127.