Isle of Man-based gambling software group Playtech has reported an impressive 69% year-on-year growth in revenue to €736.1 million for the first half of 2019.
Impressive revenue growth, but profits take a hit
The group’s performance was boosted by the acquisition of a 70.6% stake in Italian operator Snaitech in June 2018 for €291 million, with Snaitech seeing a 26% increase in adjusted EBITDA to €74.7 million (excl. tax and the 2018 FIFA World Cup). The group says that Snaitech has yet to register a negative impact from Italy’s total gambling advertising ban, which came into effect on 14th July 2019.
Playtech’s B2B gambling revenue was up 11% in regulated markets excluding the UK, and sports was up 27%, helped by hardware sales. In the UK, B2B gambling revenue was up 7%, while Playtech and News UK also agreed on a multi-year extension to operate Sun Bingo, which itself saw revenue grow 20% to €17.5m.
To put this in perspective, for H1 2018, Playtech managed revenue growth of just 4% to €436.5m.
However, despite the impressive revenue figures, adjusted net profit fell 15% to €83.3m and reported net profit plummeted 85% to €16.8m, with share dividends halving to €6.10.
Cost reductions, financing and new markets
During H1 2019 the group has been focused on reducing costs, and shoring up finances, with a €350 million bond raised to secure long term requirements.
The group has also been looking to new markets to broaden its business, extending an agreement with GVC Holdings to cover its UK, Italian, Spanish, Greek and Brazilian portfolios.
Looking ahead, expected 2019 revenues from Asia have been slashed by €35m, with the continent now expected to add around €115m for the year.
Reflecting on the figures Chairman of Playtech, Alan Jackson, said:
“Playtech’s combination of scale and leadership in technology continues to deliver growth and strategic progress in our core gambling businesses. In H1 this continued progress has driven Group regulated revenue to a new high of 87% (H1 2018: 69%).
“In our B2B business double digit growth in regulated markets outside of the UK has been accompanied by landmark new licensee wins in key regulated markets, laying the foundations for future growth. In our B2C business Snaitech continues to go from strength to strength demonstrating impressive growth momentum in a key market.
“The continued strength of the core business has allowed Playtech to continue its flexible shareholder returns policy, today declaring an additional buyback programme alongside an interim dividend.”
You can read the full report here.