Playtech Reports 25% Net Profit Rise For H1 2018

Playtech has reported a 24% increase in year-in-year net profits for the first half of 2018, and has made “significant strategic and operations progress in regulated markets.”

London-listed Playtech, one of the world’s largest online gaming software suppliers, has posted a huge 25% year-on-year net profit increase, to €112.4m ($130), for the first half of 2018.

The company claimed “significant strategic and operations progress in regulated markets” as it also reported a revenue increase of 4% to €436.5m compared to the same period a year ago.

Group financial highlights

  • Total revenues excluding Asia up 35% vs H1 2017 on a reported basis
  • 69% of group revenues were regulated in H1 (H1 2017: 50%)
  • 80% regulated revenues FY 2018 at current run rate
  • Continued progress on balance sheet efficiency with sale of holding in Ladbrokes-Coral & GVC
  • Strong cash generation: net cash from operations up 51% to €222.5 million
  • Interim dividend per share sustained at 2017 level

B2B Gaming Division

  • Regulated gaming revenues of 53%
  • Organic growth rate of 16%
  • Playtech BGT Sports 27% revenue growth
  • New licensee wins in key strategic markets (Gala Leisure Buzz Bingo UK, casino: Polish National Lottery Totalizator, sports: SAS in Portugal and Sportium in Colombia).

B2C Gaming Division

  • Completion of the Snaitech acquisition, which was 100% owned from 3rd August
  • Sun Bingo 28% revenue growth

Trade Tech Group

  • 16% revenue growth to €52.3m and 58% Adjusted EBITDA growth to €25.2m

Despite strong overall performance, “disappointing market conditions in Asia” and the expensive acquisition of Snaitech ($824m), resulted in the adjusted net profit falling 34% to €83.3m, and the adjusted EBITDA falling 15% to €145m.

Playtech Group’s Chairman, Alan Jackson, commented:

“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% 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% 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.”

After focusing on acquisitions and regulated markets, like most other industry players Playtech is now eyeing the burgeoning US market. With this in mind, Ian Penrose – who led the turnaround at Sportech PLC, and has “valuable knowledge of the US gambling market” – has recently been appointed to the group’s board.

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