Gaming content and solutions provider Inspired announced that Fitch Ratings has affirmed the company’s Long-Term Issuer Default Rating at ‘B’. The outlook for the rating is stable. In addition, Fitch has also affirmed Inspired’s senior secured instrument rating at ‘BB-’ with a Recovery Rating of ‘RR2’.
Fitch noted: “The Stable Outlook reflects our assumptions that Inspired’s organic deleveraging in the upcoming years will be followed by timely addressing its upcoming debt maturities through refinancing.”
According to Fitch Ratings, the ‘B’ IDR reflects Inspired’s business profile characteristics, with niche and geographically concentrated core business positioning balanced by a solid financial profile for its current rating that “exhibits strong profitability translating into free cash flow (FCF) generation capacity.”
Fitch also detailed the key rating drivers for the rating. Among them was “Profitability defined by growing segments”: Fitch estimates that the virtuals and interactive segments will have contributed around 67% of Inspired’s EBITDA in 2023, up from 59% in 2022.
Both segments are “highly profitable and have higher structural growth,” which should contribute positively to group profitability. Fitch forecasts their contribution to EBITDA will exceed 70% by 2026, helping the group-level EBITDA margin to increase to 30% in 2026 from around 26% in 2023.