Playtech 2019 revenue growth outdone by costs & duties 

FTSE250-listed Playtech Plc will continue to review its corporate divisions and underlining strategy after full-year results for 2019 showed core unit growth subdued by further Asian market impacts and severe declines across its TradeTech financial services unit.

Playtech recorded a 22% increase in corporate revenues to €1.5 billion (FY2018: €1.25bn), as the technology group’s ‘Core B2B’ division delivered a 15% revenue increase of €440 million (FY2018: €383m). 

Nevertheless, a series of discontinued costs, impairment charges and higher taxation duties registered across core markets saw Playtech report a 50% decline in adjusted net profits to €133 million (FY2018: €260m).

Following a lacklustre 2018, the group underlined that it has revived its ‘B2B commercial pipeline’, in which it has added a further 50 new brands as customers during the year. 

Playtech’s strong revenue performance was further supported by a B2C boost delivered by Snaitech Italia, which governance praised for an ‘outstanding performance’ after recording a 62% increase in revenues to €830 million (FY2018: €511m) and contributing an EBITDA of €162 million FY2018: €93m). 

Despite its core units recording strong topline metrics, Playtech performance was dragged back by a number of costs attached to its TradeTech unit and Asian market presence.

The FTSE250 technology group absorbed a €90 million impairment charge on intangible assets and discontinued services related to its ‘under review’ TradeTech division.

Playtech governance has separated reporting on its Asia B2B presence, as the company detailed that its Asian market activity (primarily in China and Malaysia) had declined in revenues to €113 million (FY2018: €183m).

Further to TradeTech costs and Asian declines, during the course of 2019 Playtech booked a €28 million one-off Israeli tax settlement fee, and a further €24 million impairment charge for winding down its Casual Games subsidiary.

Meanwhile in Europe, despite recording a significant revenue increase in its B2C make-up, Playtech saw the unit’s operational trading costs increase 44% to €720 million (FY2018: €515m).  

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.” 

 

 

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