The Stars Group has praised success across its Australia and UK divisions as well as “rapid progress” across its US interests as a third-quarter financial performance meets the goals of the group.
Group revenue increased by 8.8% to $622.4 million (2018: $571.9 million), led by strong customer engagement and business patterns across the UK and Australia.
Online sports gambling was the main vertical service of The Stars Group during the period, 35% vs. 27.7% in 2018, followed by online casino, 31.3% vs. 31.6%, and online poker, which fell to 30.9% (2018: 37.7%).
The UK and Australia increased significantly, with the former posting revenue of $226.9 m, up 34.8 percent from $168.3 m, owing to a combination of factors including strong operating momentum across the segment’s betting and gaming products and the timing of Sky Betting and Gaming acquisition.
An increase of 36.4 percent from $71.1 million to $52.1 million was reported in the latter, driven primarily by higher betting net win margin, partially offset by a decrease in stakes as a result of the 2018 World Cup and adverse foreign exchange fluctuations.
This balanced falling sales in the global division of Stars, with a slight increase in gaming hindered by a fall in poker and gambling as their total figure hit $325.4 m, down from $352.4 m by 7.7 percent.
The group states that the drop results from adverse foreign exchange fluctuations and continued disruptions and regulatory headwinds in certain markets, due to reduced customer deposits due to local restrictions on certain payment processing methods and on certain download methods.
Group profit increased 3.1 per cent to $456.4 million (2018: $442.7 million) and adjusted EBITDA increased to $239.9 million, up 21 per cent from $198.2 million, but net loss swung to $51.7 million from a gain of $9.7 million as operating income fell to $16.3 million ($71.1 million).
“Our third quarter results were robust and in-line with our expectations, supported by strong revenue growth in our United Kingdom and Australia segments, which helped offset both the ongoing disruption in certain of our lower-priority international markets and continued foreign exchange headwinds across the business,” explained Rafi Ashkenazi, The Stars Group’s CEO.
“We have also made rapid progress in the US following our landmark Fox Sports deal in May, with the launch of our Fox Bet products at the start of the professional football season in New Jersey and Pennsylvania, and some very encouraging early signs from our Fox Sports Super 6 nationwide free-to-play games.”
The group also received an update on its merger with Flutter Entertainment, which will see Stars own about 45.36 percent of the share capital and is expected to be completed in the second or third quarter of 2020, subject to investor, court and relevant regulatory approvals.
According to Ashkenazi: “We remain excited about the opportunities in front of us as the combination will enhance and accelerate each company’s growth strategy by providing a diverse portfolio of leading brands and complementary best-in-class products with a broad geographic reach.”