Playtech Survives Tough Year But Confident Of Strong 2020

Playtech has praised “another important year” in the company’s development, as strong performance across its core B2C and B2B businesses has been offset by Asian results and TradeTech struggles.

Originally indicating a “well below management expectations” full-year result for the latter, revenue fell 26.9 percent from € 67.9 m (2018: € 92.9 m) with adjusted EBITDA dropping 73.5 percent to € 7.8 m (2018: € 29.5 m).

The substantial declines are due to tough market conditions in 2019 and depreciation of € 90.1 million in intangible assets leading to a loss for the overall group of € 19 million, including the discontinued activity.

Playtech president Alan Jackson commented: “TradeTech had a challenging 2019 but the team has made several changes to the business and starts 2020 in a stronger position. As we announced at our interim results, we are reviewing the longer-term options for this business and will update as the year progresses.”

The company’s Group revenue grew 23% to € 1,5 billion (2018: € 1,22 billion), with the adjusted EBITDA increasing to € 383,1 million, an 11% rise from € 345,1 million. Snaitech is lauded as having “outstanding 2019” with significant growth in underlying net profit and adjusted EBITDA, on a pro forma basis, when excluding impact of increased taxation from legislative changes in 2019”.

Adjusted pre-tax income from continuing operations decreased by 49 percent to € 133 million (2018: € 259.8 million). The estimated income before tax from continuing operations was € 13.2 million, down 90% compared to a recorded net profit of € 128.1 million in 2018, and the company incurred a net loss of € 19.6 million in 2019, including discontinued operations and taxes.

Notwithstanding adjusted EBITDA growth, the group’s adjusted pre-tax income from continuing operations dropped primarily due to increased depreciation, amortisation, interest costs and taxes following the Snaitech acquisition as well as increased company financing costs arising from bond loans, in addition to substantial dividend increases and the disposal of equity investments in 2018.

Jackson commented: “Our core B2B gambling business reported strong growth in 2019. In addition we made further strategic progress by entering newly regulated markets, signing new customers, expanding existing relationships and continuing to innovate with new product launches.

“Together these are laying the foundations for our future growth. In our B2C Gambling business, Snaitech had a fantastic 2019 and continues to gain market share and reached the number one market share position for online betting and gaming in Italy in H2 2019.

“The strength of our diversified business model, focus on cash flows and strong balance sheet has allowed Playtech to announce today further shareholder returns with a new €40m share buyback programme alongside our final dividend.

“Playtech has taken steps to improve its corporate governance with two new non-executive directors appointed in 2019 and I will in due course be announcing my successor as chairman who will lead the board during the next phase of Playtech’s exciting future.”