Playtech hoping to hit €300m EBITDA for 2020

Playtech has reported “significant strategic and operational progress” during 2020 despite the impact of the coronavirus pandemic. In a full-year trading update, the London-listed supplier noted that its expects to achieve an adjusted EBTIDA of at least €300m following strong performance from its core B2B, Snaitech and TradeTech (Finalto) segments. The €300m, if reached, would represent a 20.5% year-on-year decrease from the €377.2m in adjusted EBITDA the group recorded for full-year 2019. Playtech detailed how its expansion strategy in the Americas has served the group well, with both US and Latam ventures having launched. The group secured regulatory approval in December to launch in Michigan to add to its partnerships with bet365 and Entain in New Jersey. Playtech said new agreements in Colombia, Guatemala, Costa Rica and Panama, as well as continued growth in Mexico with Caliente, meant the group had “furthered its leadership in Latin America”. The group went on to detail that its core B2B products across online casino, bingo and poker had performed well throughout the year, while it had inked an agreement with a new distributer in Asia to add more flexibility in the region moving forward. In a statement, the group said: “While the Covid-19 pandemic continues to pose challenges and the macroeconomic outlook remains highly uncertain, Playtech remains well placed to make further strategic and operational progress in 2021.” Playtech also made significant progress in its attempts to offload non-core assets during the year. The group confirmed the sale of YoYo Games for around $10m to an undisclosed buyer. The offloading of YoYo Games means that Playtech has now disposed of all its previously owned casual and social gaming assets. The supplier is still looking to sell its TradeTech subsidiary, which has been renamed Finalto, despite its continued strong performance. In September, CEO Mor Weizer told EGR that he didn’t feel a need to sell TradeTech, although he regarded it as a non-core asset. Weizer said: “I don’t feel under any pressure to sell the business. Obviously, it performed strongly during the pandemic and during the first nine months of the year. “We believe it is our duty as the board that we should consider and have such discussions with interested parties. I wouldn’t jump to any conclusions; it may be the case that the offers are not high enough or we may want to keep this business in light of its growth potential,” he added. Playtech’s share price jumped 7% to 480.6p in early trading following the announcement. Peel Hunt analyst Ivor Jones said: “Enthusiasm for the gambling subsector has pushed the share price well ahead of our previous target price. “However, in our view, Playtech does not play to the key themes of the US gold rush or M&A and we believe that the share price has overshot. ​”We are lowering our recommendation from Hold to Reduce, while raising our target price from 340p to 435p,” he added. Playtech will release its full-year results for 2020 on 11 March.