Playtech is remaining cautious on current trading and its future outlook as the adverse effects of the COVID-19 pandemic shut down “an extremely strong start” to the year, with the group reporting a series of declines across H1 trading.
Lauding the group’s US momentum, with Playtech stating the further licence applications are underway and increased investment is planned, it is said that a “resilient” first half of the year was driven by online and an exceptional TradeTech performance together with early and decisive actions taken in response to COVID-19.
Revenue during the first half of the year declined 23 per cent to €564m, (2019: €727.8m), with the adverse impacts of COVID-19 between mid-March and June halting a strong start led by TradeTech, Snaitech and favourable sporting results.
Group adjusted EBITDA declined 16 per cent to €162.3m (2019: €192.9m), a performance which Playtech says could have painted a bleaker picture had it not been for the strength of online casino, live casino, bingo, poker and the aforementioned TradeTech showing.
Adjusted profit during the first half of the year dropped 44 per cent to €44.3m (2019: €78.4m), with reported profit declining 81 per cent from €24.8m to €4.6m.
“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,” noted Mor Weizer, CEO of Playtech.
“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.”
Overall, B2B gambling revenues decreased by 13 per cent during the period to €229.7m (2019: €265.5m), largely due to the decline in revenues from retail activity and Asia. Revenues from retail activities fell by 54 per cent.
Playtech says that excluding online sport, which declined significantly due to the suspension of sporting events worldwide due to COVID-19, every other online business within its B2B gambling division achieved strong revenue growth versus H1 2019.
B2C revenue dropped 41 per cent to €253.5m (2019: €430m), primarily driven by a 46 per cent decline at Snaitech to €215.5m (2019: €395.8m) brought on by the closure of retail betting shops in Italy and the absence of sporting events for large parts of H1.
Snaitech’s revenue was supported by a 37 per cent increase in online revenues, which was driven by a 41 per cent increase in online wagers year-on-year.
TradeTech, which Playtech recently confirmed it is in talks to sell, is hailed as boasting an “outstanding period” both before and during the months of the pandemic, with revenue increasing by 123 per cent to €87.3m (2019: €39.1m).
The business benefited significantly from increased market volatility and trading volumes during much of the period, particularly in March and April as the effects of the pandemic created large price movements in major instruments.
The performance through the first half of the year is not expected to be repeated during the remainder of 2020, with market volatility currently significantly lower.
Weizer continued: “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.
“As the leading technology company in the gambling industry, our licensees look to us to deliver innovation that changes the way players experience gambling entertainment. Key to this approach is sustainable success, our new ESG strategy launched in H1, which aims to consolidate our position as a global leader in safer products, data analytics and player engagement solutions and build a safe and sustainable gambling industry for the benefit of all stakeholders.”
Adding: “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.”