Lack-lustre half-yearly from Playtech plc

News on 23 Aug 2018

Major online gambling group Playtech plc posted rather lack-lustre H1-2018 results Thursday, reporting:

* Overall revenue up just 4 percent at Euro 436.5 million. However the company noted that excluding the troubled Asian operations revenue was up 35 percent on a reported basis;

* Adjusted EBITDA down 15 percent on a reported basis at Euro 145 million;

* Adjusted net profit down 34 percent at Euro 83.3 million;

* Reported net profit down 25 percent at E uro 112.4 million;

* Dividend flat at 12.1 euro cents.

* 69 percent of group revenues were regulated in H1 (H1 2017: 50 percent), with around 80 percent of regulated revenues forecast for FY 2018 at current run rate;

” Strong cash generation: net cash from operations up 51 percent to Euro 222.5 million;

* Completion of Snaitech acquisition; consolidated from 5 June and now fully owned. This gives the company a strong presence in Europe’s largest regulated market by GGR;

Operational highlights

B2B Gaming Division

* Regulated Gaming revenues of 53 percent (H1 2017: 38 percent);

* Organic growth in regulated B2B Gaming revenue 16 percent at constant currency;

* Playtech BGT Sports continues to win new clients and deliver growth, with 27 percent growth in revenue, 8 percent growth in retail machine footprint globally;

* New licensees include Gala Leisure Buzz Bingo UK omni-channel deal, Casino: Polish National Lottery Totalizator, Sports: SAS in Portugal, Sportium in Columbia;

* Pipeline strong across key geographies;

* GVC negotiations progressing to benefit of both parties.

B2C Gaming Division

* Sun Bingo 28 percent revenue growth at constant currency.

TradeTech Group

* 16 percent revenue growth to Euro 52.3 million and 58 percent Adjusted EBITDA growth to Euro 25.2 million.

Current trading and outlook

* Average daily revenue in the B2B Gaming Division for the first 52 days of Q3 2018 was down 13 percent y-o-y;

* Excluding Asia, average daily revenue in the B2B Gaming Division for the first 52 days of Q3 2018 was up 6 percent;

* Snaitech saw a strong performance at the start of H2 2018 driven by the closing weeks of the World Cup following which the business has continued to trade in line with expectations;

* B2C gaming excluding Snaitech is performing in line with expectations with the Sun Bingo contract continuing to see revenue momentum;

* TradeTech’s positive momentum reported for the first half of 2018 has continued into the second half.

Alan Jackson, chairman of Playtech, reported:

‘Playtech has had an extremely busy first half of the year with important operational progress and new licensee wins in key strategic markets, the UK, Europe and Latin America. This continued progress is resulting in higher quality earnings for Playtech with Group revenue now 69 percent regulated. Following headwinds in Asia and a full year contribution from the landmark Snaitech acquisition, regulated revenue at current run rate is expected to be c. 80 percent in 2018.

“This progress is marked against the disappointing market conditions in Asia. However, it should be noted the headwinds in the Asian market are not reflective of the core strength of the Playtech model as the regulated segment continues to report organic growth and encouraging momentum.

“Looking to the future, the delivery of the Snaitech acquisition in the period has not only delivered geographical diversification of the Group’s revenue profile but more importantly delivered a cornerstone presence in the largest, and one of the fastest growing gambling markets in Europe.”

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