Inspired Entertainment recently saw profits fall $10.2m (£8.4m/€9.1m) in the second quarter of its monetary year, with the failure responsible on the UK government’s verdict to decrease maximum B2 machine stakes to £2.

Inspired reported that the decision affected its revenue. The cut, effective in April, was responsible for $5.5m of the company’s profits waning. Total revenue for the three months completed 30 June fell 27.6% by the year to $26.7m.

“The impact of the Triennial Implementation (which began on April 1, 2019) was in line with our expectations,” said Lorne Weil, Executive Chairman of Inspired. “We believe we’ve taken much of the hit on the loss of revenue in the second quarter with very little mitigation so far.  We’ve actually begun to see the revenue creep back up, with Gross win per unit per day improving from 44.5% decline in April to a 38.0% decline in June.  This trend has continued thus far in the third quarter and we anticipate the trend will be more pronounced with the acceleration of shop closures and the restructuring mitigation. We remain confident in our plan to manage the effect of this regulatory change and we believe the ultimate projected impact on our Adjusted EBITDA should be at the lower end of the range of our guidance of approximately $10 million to $11 million annually on a steady state basis.”

Weil continued, “Looking forward, we are extremely focused and encouraged by our business development opportunities across a number of key territories that we believe will help offset the impact of the Triennial Implementation. We have recently signed an extension with William Hill, our largest customer, through 2022, and were awarded 580 additional terminals in Greece, 380 of which will be our brand new Valor™ VIP cabinet, which is getting rave reviews. We continue to see positive momentum in our North American business with new Virtual Sports and Interactive agreements in Canada and progress on our initial terminal placements anticipated in the fourth quarter.  We have also deployed several interactive content launches, all while generating significant free cash flow.”

“We also see our pending transformational acquisition of NTG, which is on track to close in the third quarter, subject to regulatory approval, as a huge catalyst in our business, dramatically increasing our size, scope and scale and augmenting the existing growth trends for our Company. 

In summary, we believe that by the end of 2019/beginning of 2020 we should have mitigated the impact of the Triennial Implementation to a level at or below our earlier forecasts, added new organic Adjusted EBITDA at least equal to the Triennial Implementation impact, completed the NTG acquisition and begun to realize the benefits of synergy. This would take our profitability to an entirely new level and provide a platform for continued growth thereafter,” concluded Mr. Weil.