SciGames posts 7% revenue growth in 2012
Lottery supplier sees net loss in Q4 widen as $1.4bn WMS acquisition completion draws closer.
Scientific Games recorded a 7% increase in revenues last year and is edging closer to completing its proposed acquisition of gaming supplier WMS Industries, the company has announced in its results for the year ended 31 December 2012.
Due to US lottery retail sales increasing 5%, Scientific Games achieved a 4.3% rise in revenue in the fourth quarter ended 31 December 2012 compared to Q4 2011, with attributable EBITDA increasing 13% from $80.3m to $90.6m year-on-year.
The lottery specialist’s net loss in Q4 increased however from $8.5m in the same 2011 period to $24.7m, attributable to increased depreciation and amortization expenses. Revenue from gaming, meanwhile, decreased after losing a William Hill contract and closing its Austrian over-the-counter business in 2011.
The Federal Trade Commission has granted SciGames and WMS early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, a pre-requisite for the US$26 a share acquisition announced in January. At the time Scientific Games said the $1.5bn acquisition should officially close by the end of this year and highlighted the significant boost he anticipated to the company’s earnings per share by creating a company “with the ability to offer an extensive range of products and services to public and private sector lottery and gaming customers around the world”.
In an analyst call discussing the results, CEO Lorne Weil said the acquisition of WMS would be “special” for SciGames once completed. “We believe it leverages the strategic dimensions about the broad scale and scope – scale through the integration of functional resources like engineering, manufacturing and content development, and scope through the application of the core competencies of each partner to generate new revenue streams in the markets of the other,” he said.
The company was part of the consortium led by OPAP awarded the contract to manage the Greek lottery in December for 12 years, with SciGames set to be the exclusive instant ticket supplier.
SciGames has also agreed a deal to supply the Maryland Lottery with its Properties Plus loyalty rewards programme, bringing the total to eight, which the supplier stating in its results that this programme “will help lead the way for states to begin providing internet-based offerings”.