Playtech’s ‘interrupted Snaitech’ bears brunt of COVID-19 disruptions

Playtech Plc will trade with caution for the remainder of 2020, as its business units emerge from a ‘disrupted period’, with its corporate outlook dependent on further COVID-19 outcomes.   

Publishing its 2020 interim results (period ending 30 June), Playtech recorded a 23% drop in corporate revenues to €564 million, (H1 2019: €728m) as the FTSE250 technology group absorbed a series of trading shocks reported by its B2C unit.

Trading with the absence of sports and the enforced closure of its entire retail portfolio, an ‘interrupted Snaitech’ – Playtech’s Italian Sportsbook and core B2C asset – recorded a 46% decline in period revenues.

Snaitech impairments have seen Playtech record a 41% decline in B2C revenues to €253 million (H1 2019: €430m), leading to a 38% drop in B2C adjusted EBITDA to €46 million (H1 2019: €75m). 

Commenting on the results, Playtech CEO Mor Weizer stated: “The attitude of our people coupled with the resilience and diversification of our technology-led business model has delivered a strong first-half performance during an extremely challenging period for the industry. 

“These strengths, combined with early decisive action to focus on the safety of our employees and protect the Group’s cash flow, has placed us in a strong position to benefit from the recovery and to capture the exciting market opportunity in the US and Latin America.  

“The extraordinary trading conditions during the pandemic have brought us closer than ever to our licensees and we have seen even greater demand for our products, with an increased focus across the globe on intelligent software and personalised player journeys and protection tools.”

The Group’s adjusted EBITDA totalled €162.3 million (H1 2019: €192.9m), marking a 15% decline compared to last year. Playtech implied that this figure ‘exceeded expectations’, attributing the figures to the company’s expansion of online businesses outside of Asia, namely via its Casino (including Live), Bingo, Poker and its TradeTech subsidiaries.

Playtech has highlighted that it is continuing to ‘evaluate all options for TradeTech’, stating that the Group is in early-stage discussions with a number of parties regarding a potential sale of the subsidiary. 

Despite the doom and gloom of the pandemic, Playtech reported that its White label brands (including Sun Bingo) saw 22% revenue growth when compared to H1 2019, recording €29.5 million in revenues (H1 2019: €24.3m).

Closing its interim statement, Playtech declared group adjusted profits of €44 million (H1 2019 €78m) with corporate management stating that profits had been secured by early decisive actions lowering the firm’s fixed cost base across all trading units.

Targeting further regulated European markets, Playtech has set its eyes on Ukraine, the Netherlands and Germany, adding that it is ‘well-positioned to enter each of these markets’.

The US and Latin American markets remain a key priority for Playtech, with the group outlining its intention to ‘increase its scale and distribution in these markets by leveraging its range of products and services across the gambling value chain’.

Weizer concluded: “As well as increasing our work with existing tier one licensees and adding more than 50 new brands to our SaaS model, we have also continued to execute our expansion into strategically important markets such as the US with our first launch in New Jersey and further structured agreements in Latin America. 

“The scale of our technology and the breadth of our product offering mean Playtech can capture commercial opportunities in the fast-growing US and Latin America markets outside the remit of traditional B2B suppliers and we are investing in accelerating this strategy.” 

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