Lightweight Fantasy (L&W) has once again established new benchmarks for its wagering and SciPlay ventures in the second quarter, while also proclaiming that its complete takeover of SciPlay will be finalized by year’s end.
L&W attained record highs in the second quarter, with the SciPlay acquisition nearing completion.
Following record highs across all departments in the initial quarter, both enterprises witnessed revenue growth in the second quarter. L&W also emphasized that its core gaming enterprise experienced revenue growth in the second quarter due to amplified sales in North America and Australia.
Concerning Australia, L&W obtained a secondary listing on the Australian Securities Exchange (ASX) in the second quarter. Thus far, L&W shares traded on the ASX have a value exceeding A$1 billion (£514 million/€598 million/$656 million).
SciPlay acquisition to be finalized in the fourth quarter?
All gaming departments observed growth in the second quarter.
Lottery sales influenced year-on-year comparisons.
How did Lightweight Fantasy perform in the initial six months of the year?
Chief Financial Officer handover is impending.
The SciPlay transaction is anticipated to be completed in the fourth quarter.
Additionally, in the second quarter, L&W formulated plans to capitalize on SciPlay’s expansion by acquiring the remaining publicly traded shares of SciPlay. The agreement, announced in May, is valued at $422 million (£331 million/€385 million) and will fully integrate SciPlay into L&W’s operations.
The group presently holds an 83% economic stake and 98% voting authority in the social gaming enterprise.
Matt Wilson, the chief executive officer of L&W, stated that the transaction is nearing completion and is anticipated to be finalized by the end of the year.
“We are thrilled about this news,” Wilson expressed during L&W’s earnings conference call. “We have signed a definitive agreement and anticipate closing in the fourth quarter, but this is truly the final significant milestone in streamlining our platform.
“There aren’t many organizations within the industry that possess a distinctive portfolio like ours, encompassing land-based operations, a leading online gaming position, and the fastest-growing social casino enterprise. Consequently, unlocking that full potential, developing the best product globally, is pivotal to reintegrating SciPlay into L&W.”
Light and Wonder witnessed revenue growth across all business divisions in its second-quarter financial results.
Group revenue for the three-month period concluding on June 30 amounted to $731 million, representing a 19.8% year-over-year increase. This growth was fueled by widespread expansion across L&W’s three business divisions.
Approximately $496 million of the total revenue originated from service activities, while the remaining $235 million stemmed from product sales.
The gaming business continued to spearhead growth, with revenue rising 20.8% to $471 million. L&W highlighted that gaming machine sales surged by 41%, while gaming systems and table product revenue climbed 20.0% and 34.0%, respectively.
Shifting focus to SciPlay, revenue attained a record $190 million, reflecting an 18.8% year-over-year increase. L&W attributed this to its core social casino business, which it asserted delivered robust paying metrics, outperforming the market and gaining market share.
Online gaming revenue also experienced growth, rising by 16%.
L&Ws earnings climbed by 7% to $70 million, a record peak. The organization attributed this to persistent expansion in the American market, where income rose by 32.0%. Income is anticipated to rise further as L&W prepares to launch its online live gambling establishment in Michigan in the second quarter, subject to regulatory approval.
Lottery sales influenced the year-on-year comparison for the second quarter. On the expenditure side, operational expenses climbed by 9.6% to $618 million in the second quarter. Excluding restructuring, L&W boosted spending in all areas. Sales, general, and administrative costs remained the largest expense at $203 million.
L&W also recorded $93 million in other finance-related expenses, resulting in a pre-tax profit from continuing operations of €20 million. This contrasts with a loss of $140 million in the same period in 2022.
The organization paid $15 million in income tax, resulting in a net profit from continuing operations of $5 million, compared to a loss of $150 million in the same period last year. Adjusted EBITDA also climbed by 32.6% to $281 million.
However, the outcomes would be different if discontinued operations were included. L&W finalized the sale of its lottery business to Brookfield Business Partners for $5.8 billion in April of last year.
Net profit from discontinued operations in the second quarter last year was $3.26 billion. Therefore, after subtracting the net profit from non-controlling interests of $6 million this quarter, the year-on-year comparison for 2023 resulted in a net loss of $1 million, compared to a profit of $3.29 billion in the same period last year.
Income for the first half of the year reached $1.4 billion.
During the six-month period ending on June 30th, the second quarter’s performance had a substantial effect on L&W, with earnings reaching $1.4 billion. This signifies an 18.3% rise in comparison to the same period in the previous year, which was $1.18 billion.
Gaming income expanded by 19.5% to $890 million, while SciPlay income climbed by 18.2% to $376 million, and iGaming income grew by 11.7% to $134 million. Overall, service earnings were $973 million, and product sales earnings were $427 million.
Operational expenses increased by 8.0% to $1.19 billion, and financial expenses reached $169 million. Consequently, pre-tax profit from ongoing operations was $46 million, compared to a loss of $213 million in the same period last year.
L&W paid $14 million in taxes, resulting in a total net profit from ongoing operations of $32 million, a substantial improvement compared to the loss of $217 million in the same period last year. Adjusted EBITDA also increased by 22.8% to $529 million.
Concerning discontinued operations, net profit last year was $3.54 billion. After subtracting the net profit of $11 million from non-controlling interests this quarter, net profit for 2023 was $21 million, compared to $3.32 billion in the same period last year.
Wilson stated, “Our published figures continue to demonstrate the investment we’ve made in our business and reflect the significant progress we’ve made in achieving our long-term goals.”
“We have achieved double-digit revenue and profit growth in all three of our business segments, generated strong cash flow, and reduced leverage, which has led to an exceptional second quarter performance.”
James is set to leave his position as Chief Financial Officer of Light & Wonder.
Connie James’ final full quarter as Chief Financial Officer of L&W was the second quarter. Last month, the news of her exit at the end of August was made official.
Oliver Zhou, L&W’s Senior Vice President of Finance, will take on the role of temporary CFO. He will hold the position until a permanent replacement is identified, a search that is currently in progress.
“It has been an honor to be part of such a diverse and skilled team, and I am proud of the many achievements we have accomplished during this period,” stated James. “We have reached numerous significant milestones in transforming the company and are now in a strong position with a robust financial statement and a strategic capital allocation plan.”
“Our ongoing growth in the second quarter reflects the focused execution that is ingrained in our core values. With abundant talent, a solid financial standing, and a remarkable portfolio of assets, L&W continues to advance steadily as a leading cross-platform global gaming enterprise.”
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