Following a group-wide consolidation of its pan-European operations, Allwyn International has reported positive trading during Q3, particularly in the UK.
Publishing its quarterly trading update for July-September, the company outlined Q3 revenue growth of 11% to €958.6m (2021: €867.4m) and adjusted EBITDA of €319.9m (€290.4m), a growth rate of 10%, although the margin was down from 55% to 54%..
Meanwhile, year-to-date revenue stood at €2.7m, rising by 28% on year prior income of €2.1bn, whilst EBITDA was recorded at €875.7m, up 30% on 2021’s €674.1m but again the margin declined from 54% to 52%, albeit only slightly.
“This quarter has seen Allwyn deliver yet another set of strong financial results,” said Robert Chvatal, Allwyn CEO. “We have also continued to deliver on our inorganic growth strategies, with some exciting developments in the UK in particular.”
Commenting further, Chvatal highlighted Allwyn’s ‘free cashflows’ as reflecting its cost structure and focus on cost and capital efficiency, whilst also pinpointing the firm’s success in the UK’s lottery space.
In September, Allwyn secured a major milestone as it was officially awarded the fourth National Lottery licence, having been chosen as the UK Gambling Commission’s (UKGC) preferred operator at the start of the year.
The company did face some hurdles in its path, however, as incumbent licence holder Camelot – which has been the sole operator of the Lottery since 1994 – mounted legal challenges against the Commission’s decision.
Overcoming these challenges, Allwyn was able to achieve its second major milestone by agreeing to acquire Camelot this month. Financial terms have not been disclosed, but Allwyn expects to complete the takeover in Q1 2023.
“Common ownership of the operators of both the Third and Fourth Licences will help ensure the successful delivery of the National Lottery both in 2023 and over the next decade,” Chvatal continued.
“Allwyn is committed to making the National Lottery better, raising more for good causes and improving player protection. This deal strengthens the transition process and helps support Allwyn in achieving its vision for the National Lottery.”
On a wider scale, the group reported record online sales in the Czech Republic, where its online revenue rose by 7% year-on-year, providing a bedrock for its €1.6bn with an international banking syndicate, alongside support from existing lenders and new banks.
The firm added that its operations have been largely unaffected by widespread economic uncertainty, particularly amid the War in Ukraine, due to low energy costs in its operations.
Additionally, low price points of its products, lower average spends per customer and a large number of regular players were also cited as key reasons for continued profitability.
Lastly, Allwyn completed another major milestone in Q3 regarding its general operations by increasing its shareholding in Greek multinational operator OPAP to 49% through open market purchases and participation in the latter’s scrip dividend programme.
Conducted at a cost of 327m, the share purchases make Allwyn the largest shareholder in OPAP, as the group seeks to scale its operations, technologies and systems to support expansion in the US lottery space, building on its plans to list on the NYSE.
“With a significant extension of our maturity profile, a further increase in the size of our RCF, and term funding for the up-front costs of the UK National Lottery, on attractive terms, the financing positions us well for the next chapters of our growth story.”