Attention Seeking Stock: Inspired Entertainment, Inc. (NASDAQ: INSE)
On 20 Jan 2020, Inspired Entertainment, Inc. stock identified change of 21.60% away from 52-week low price and recently located move of -30.93% off 52-week high price. INSE stock has been recorded -4.18% away from 50 day moving average and -10.04% away from 200 day moving average. Moving closer, we can see that shares have been trading -0.31% off 20-day moving average.
Inspired Entertainment, Inc (INSE) recently stated financial results for the three-month period ended September 30, 2019.
Total Revenue for the three months ended September 30, 2019 was $26.6M, a year-over-year decrease of $9.0M, or 25.3%, on a stated basis, and $7.5M, or 21.0%, on a functional currency (£) at constant rate basis. Adjusted EBITDA1 for the three months ended September 30, 2019 was $8.7M, a year-over-year decrease of 46.5% on a stated basis and 43.4% on a functional currency (£) at constant rate basis. The Company’s Revenue and Adjusted EBITDA were negatively influenced by the reduction in maximum B2 stakes to £2 in the UK LBO market implemented on April 1, 2019 (the “Triennial Implementation”). The Company completed its acquisition of Novomatic’s Gaming Technology Group on October 1st and third quarter results are not reflective of the acquisition.
Overview of Third Quarter Results
SBG service revenue declined by $6.9M, or 29.5%, on a functional currency at constant rate basis, driven mainly by the decrease in revenue in the UK LBO market caused by the Triennial Implementation, which resulted in a 37.5% year-over-year decline in UK LBO Consumer Gross Win per unit per day. The decline in Gross Win per unit per day improved by 360 basis points from the previous quarter. Additionally, revenue in the Italian market reduced by $1.1M primarily Because of a 1.8% increase in the tax rate on gross stakes and a decrease in the Greek market of $0.4M driven by a reduction in software license sales of $1.3M partly offset by the rollout of terminals, which drove additional income of $0.9M.
SBG hardware revenue increased by $0.2M, on a functional currency at constant rate basis, Because of higher SSBT sales in the UK of $1.9M and higher Flex terminal sales of $0.9M, partly offset by lower Electronic Table Game (“ETG”) sales of the Sabre Hydra™ terminal of $2.0M and lower Italy sales of $0.4M.
Virtual Sports revenue reduced by $0.8M, or 8.8%, on a functional currency at constant rate basis, primarily driven by a $0.3M reduction in revenue Because of a rephasing of the yearly contract with a major consumer, $0.3M decrease Because of the expiration of a fixed term contract and $0.3M from one-time revenue received in the previous year. The rephasing of the yearly contract has been extended for a further two-year term and the Company expects to see some benefit starting in the fourth quarter. Revenue was also influenced by a decline in revenue from $0.2M of long-term Virtual Sports licenses that have now been fully amortized and $0.2M of Interactive content sales. This was partly offset by revenue growth in the UK of $0.3M from the migration of B2 players Because of the Triennial Implementation and growth in in the rest of the world of $0.2M, Because of the launch of the Moroccan Lottery.
SG&A expenses reduced by $1.3M, or 10.3%, on a stated basis, to $11.5M., comprised of a decrease of $0.7M on a functional currency at constant rate basis and $0.6M attributable to favorable currency movements. This decrease was driven by staff-related cost savings of $1.5M, $1.8M of which were cost savings in conjunction with the Triennial Implementation, and facilities cost savings of $0.2M. This was partly offset by a raise in the costs of group restructure of $0.4M (excluded from Adjusted EBITDA) and a decrease in labor capitalization and manufacturing recoveries of $0.4MBecause of lower headcount, mix of projects and lower factory throughput.
Adjusted EBITDA for the three months ended September 30, 2019 was $8.7M, a year-over-year decrease of 46.5% on a stated basis and 43.4% on a functional currency at constant rate basis, primarily Because of the decrease caused by the Triennial Implementation, a decrease in software license sales in Greece, a raise in the tax rate in Italy and a decline Because of the rephasing of a Virtual Sports contract for a major consumer.
On a stated basis, net loss improved to a loss of $8.5M from a loss of $11.9M in the previous period, mainly Because of the $10.3M reduction in the change in fair value of derivative liability and the reduction in impairment expenses of $7.7M. This was partly offset by the reduction in revenue, the increase in acquisition and integration related transaction expenses and other finance expense.
Net Cash Provided by Operating Activities Less Cash from Investing Activities during the quarter reduced to an outflow of $4.0M from an inflow of $1.7M in the previous year period. This was partly offset by the reduction in revenue, the increase in acquisition and integration related transaction expenses and other finance expense.
Inspired Entertainment, Inc. noticed change of 14.92% to $6.7 along volume of 33213 shares in recent session compared to an average volume of 9.7K. INSE’s shares are at -8.72% for the quarter and driving a 18.17% return over the course of the past year and is now at -0.74% since this point in 2018. The average volatility for the week at 7.74% and for month was at 4.78%. There are 24.34M shares outstanding and 14.38M shares are floated in market. Right now the stock beta is 0.75.
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