Playtech (LON: PTEC) today announced its results for the six months ended 30 June 2019, together with a trading update for the period to 20 August 2019.
Financial Highlights
| H1 2019 | H1 2018 | Change(reported) | Change (const.currency)4 | |
| Revenue | €736.1m | €436.5m | 69% | 68% |
| Adjusted EBITDA2 | €190.6m | €145.0m | 31% | 31% |
| Adjusted Net Profit3 | €70.7m | €83.3m | -15% | -13% |
| Reported Net Profit3 | €16.8m | €112.4m | -85% | -84% |
| Adjusted diluted EPS | 20.5 €c | 23.9 €c | -14% | -12% |
| Reported diluted EPS | 5.5 €c | 33.7 €c | -84% | -82% |
| Total dividend per share5 | 6.1 €c | 12.1 €c | -50% | -50% |
| Total shareholder return6 | €43.9m | €38.1m | 15% | 15% |
Group highlights
· Core B2B Gambling7 revenue growth of 9% in regulated markets versus H1 2018
· Revenue growth and strong cost control drives Core B2B Gambling margin of 29% (H1 2018: 19%, H1 2018 restated to include impact of IFRS 16: 24%)
· Snaitech is the Group’s standout performer in H1 with 26% growth in adjusted EBITDA (from €59.3 million in H1 2018 after excluding gambling tax headwinds and 2018 World Cup impact, to €74.7 million in H1 2019)
· Total shareholder returns increased 15% vs. H1 2018 including €25 million share buyback and interim dividend declared of 6.1 €c per share
· Land sale agreed in Italy for €55 million, pending approvals; €5 million received in July 2019
· €350 million bond raised in H1 2019 securing long term financing requirements
Divisional highlights
· B2B Gambling Division
- Very strong momentum with over 10 brands added through July 2019
- Expanded business with existing customers including beginning rollout across GVC network, launch of Playtech customers in Sweden on Day 1 of market regulating
- Core B2B Gambling revenue growth of 11% vs. H1 2018 in regulated markets outside UK
- Core B2B Gambling revenue growth of 7% vs. H1 2018 in UK
- Strong growth of 27% in Sport, aided by hardware sales
- Pipeline strong across key geographies including further structured agreements
- Asia remains volatile with low visibility; launching incentivization programme
· B2C Gambling Division
- Snaitech H1 2019 adjusted EBITDA of €74.7 million driven by strong online revenue growth of 22%
- Snaitech achieved no. 1 market share in retail and online combined in June and July 2019
- Snaitech growth in Online stakes of 36% in H1 2019 versus H1 2018
- Sun Bingo saw 20% revenue growth at constant currency from €14.6 million in H1 2018 to €17.5 million in H1 2019; positive EBITDA contribution following renegotiation of contract
· TradeTech Group
- Strong Q2 performance following highly challenging conditions across the industry in Q1
- Revenue of €39.1 million (H1 2018: €52.3 million) and Adjusted EBITDA of €8.2 million (H1 2018: €25.2 million) decreased significantly due to low market volatility in Q1 2019 and a very strong H1 2018 performance during favorable market conditions
Current trading
· Regulated B2B Gambling revenue for the first 51 days of H2 2019 was up 4% on the same period in 2018 at constant currency and excluding acquisitions and the impact of increased RGD
· Non-regulated B2B Gambling revenue for the first 51 days of H2 2019 was down 26% on the same period in 2018 at constant currency and excluding acquisitions
· Snaitech has continued to show strong underlying business trends into H2, with no impact thus far from the advertising ban which came into effect on 14 July 2019
· TradeTech has had a good start to H2 2019 continuing its momentum from Q2
Outlook
· Playtech reiterates its 2019 Adjusted EBITDA range of €390 million to €415 million
· Core B2B and Snaitech continue strong performance
· At the current run rate, Asia will contribute approximately €115 million revenue in 2019 vs €150 million expected at the start of the year
Alan Jackson, Chairman of Playtech, commented:
“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.”
