The Stars Group reported a series of financial rises across key segments as the company lauds the impacts of past acquisitions and an ever-growing US footprint, with its PokerStars brand set for additional attention over the next 12 months.
Emerging from a difficult Q4 for the group’s poker business across the international and UK reporting segments, the closure of PokerStars in Switzerland in July 2019, along with tougher operating conditions in other markets, such as Spain and Sweden, resulted in significant regulatory changes in both.
The company claims, however, that poker “remains an important driver” with strategies in place for a deep pipeline of new product releases and marketing plans, as well as expected new market expansion plans, which it believes will support the development of its international poker business during 2020 and 2021.
Rafi Ashkenazi, CEO of The Stars Group, backed the plans: “In 2020, we plan to further enhance the global appeal of the PokerStars brand, including by launching the PokerStars sports brand, leveraging the operational capabilities of our Sky Betting & Gaming business and launching television advertising for PokerStars Casino.”
Overall group-wide Q4 revenue increased from $2.02 billion to $687.962 million (2018: $652.852 million), with full-year estimates increasing from $2.02 billion to $2.52 billion by 24.6 percent. Quarterly increases came primarily as a result of revenue growth in the UK and Australia segments, with the acquisitions of Sky Betting & Gaming and BetEasy boosting full-year figures.
Online sports betting was the main vertical commodity of The Stars Group during the quarter (39.1% versus 34.3% in 2018), followed by online casino (30.8% versus 30.1% in 2018), and online poker (27.5% versus 32.8% in 2018).
Q4 adjusted EBITDA was announced as $249.1 million ($239.4 million), ahead by 4.1%, with the company’s full-year results rising 17.9% to $921.1 million (2018: $781 million).
The US also formed a major part of the company’s latest financial statement, with the Fox Bet sector being conducted alongside Fox Sports showing an in-line financial performance with forecasts previously disclosed and a recorded loss of around $40 m for the year.
Ashkenazi added: “In 2019, we continued to execute on our strategy to deliver long-term sustainable growth and become the world’s favourite igaming destination. We not only began to see the full-year benefits of our transformative 2018 acquisitions, but executed on delivering a landmark media partnership in the US, with the launch of Fox Bet, strengthening our position in this emerging market. We also focused on creating shareholder value through efficient capital allocation, prepaying over $450m of debt during the year.
“In-line with our expectations, we exited 2019 with a strong fourth quarter with constant currency revenue growth of seven per cent year-over-year driven primarily by the continued impressive underlying performance of our primary sports betting brands.
“With sports betting now our largest product vertical and 81 per cent of our revenues coming from locally regulated or taxed markets, we are well positioned for diversified growth in 2020 and beyond.
“We entered 2020 with the full $100m run-rate of expected cost synergies from our 2018 Sky Betting & Gaming acquisition and earlier this month prepaid an additional $100m of debt, underpinning our ability to execute on complex integrations and the highly cash-generative nature of our business model.
“In addition to cost synergies, we have detailed plans in place to continue driving revenue synergies and to increase investments in product and marketing, giving us confidence in continued revenue growth in the years ahead.”