Online gaming and financial trading giant Playtech PLC (LON:PTEC) has released its results for the year ended 31 December 2019. The company reported significant decrease in revenue in its financial division TradeTech Group (which includes CFH, Alpha, Markets.com), due to challenging market conditions in 2019.
Group highlights include:
- Core B2B Gambling revenue growth of 15% vs. 2018 driven by Sports and Live Casino
- Snaitech had an outstanding 2019 with 24% growth in Underlying Adjusted EBITDA on an annualised basis (EBITDA after excluding gambling tax headwinds and 2018 World Cup impact)
- Asia remained broadly stable through H2 2019
- TradeTech restructuring underway and business under review
- Business rationalisation in progress with Casual Gaming now a discontinued operation
- €350 million bond raised, convertible bond repaid on maturity; revolving credit facility increased and extended including new Tier 1 lender joining syndicate
- Shareholder returns up 4% vs. 2018 with new €40 million share repurchase programme announced today and final dividend declared of 12 €c per share.
TradeTech Group reported a 30% YoY drop in 2019 revenue – €67.9 million (2018: €92.9 million). Adjusted EBITDA of €7.8 million (2018: €29.5 million) decreased significantly. Impairment of intangible assets of €90.1 million leading to a loss for the overall Group of €19.0 million including the discontinued operation. The financial division was also negatively impacted by ESMA’s product intervention measures.
TradeTech had a challenging 2019 due to record low volatility in Q1. LeapRate reminds that back in November, the company noted that it expects the division’s results for 2019 to be well below management’s expectations.
The CFH business performed well in 2019 and continues to grow by increasing customers and volumes and enters 2020 with a strong pipeline.
Alan Jackson, Chairman of Playtech, 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 €40 million 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.
Playtech started the year strongly against material headwinds, however, in the last two weeks it has started to see a material impact from changes in normal customer patterns due to COVID-19 which is significantly affecting two of its largest markets. According to the company, the results for 2020 are likely to be below existing market expectations.
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