International Game Technology PLC (IGT) stock prices were up by 4.76% shortly after market trading commenced on May 11th, 2021, bringing the price per share up to USD$18.28 early in the trading day.
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IGT reported achieving one of the highest revenue and profit levels in the history of the company, thanks largely to Global Lottery. Driven by strong performance and invested capital discipline, the company also reported strong cash flow, with a return to pre-pandemic levels expected for later in the fiscal year 2021. The achievement of roughly a third of the USD$200 million + 2021 OPtiMa targets during the first quarter of 2021 further supports the company’s forecasts of a promising year.
Continued Recovery During Pandemic
Global Gaming has seen a sequential improvement in performance as the industry as a whole recover from restrictions and regulations enforced because of the proliferation of the global Covid-19 pandemic. Digital & Betting revenue continues to grow as it reports an 85% year-over-year increase. The company also successfully refinanced almost USD$1 billion in 6.25% Notes that are due in 2022with USD$750 million in 4.125% Notes that are due in 2026, which the company draws on revolving credit facilities.
Contract Extensions
IGT has been consolidating its footprint in the industry with the signing of several multi-year contracts. A seven-year contract extension was signed with Jamaica Lottery, while Kentucky Lottery committed to a four-year extension to the existing contract. The existing contract with Mexico Lottery was also extended by two years.
Revenue Reports
IGT reported consolidated revenues of USD1.015 million, indicating a 25% increase from the previous year. Global Lottery revenue was up 48% to hit USD$749 million, largely as a result of the 32.4% increase in same-store sales. Global Gaming Revenues came out to USD$266 million, as compared to the USD$310 million reported in the prior year, largely a result of gaming markets having suffered during the outbreak of the coronavirus. Nevertheless, Global Gaming Revenue is up sequentially from the USD4255 million reported in the fourth quarter of 2020.
Solid Liquidity Position
The company has seen a reduction in its net debt as of the reporting of its Q1 2021 financial statements. The financial reports indicate a net debt of USD$7.07 billion, whereas the company reported USD$7.32 billion as of December 31st, 2020. IGT also reported that as of March 31st, 2021, the company had unrestricted cash amounting to USD$748 million, with USD$1.4 billion in additional borrowing capacity.
Future Outlook for IGT
The highly promising financial reports for the first quarter of the fiscal year 2021 set the company up for a strong trajectory of growth. Current and potential investors are confident that IGT can leverage the resources at its disposal to usher in significant and sustained increases in shareholder value.
