Playtech reports 22% revenue dip in H1 2020

Playtech has reported a 22% year-on-year drop in H1 revenue to €564m (£513m) as the business looks to rebound from the challenge of Covid-19. Company adjusted EBITDA fell by 15% for H1 2020 to €162.3m (£147.9m), punctuated by a 36% decline in adjusted profits, which dropped to €44.3m (£40.3m). Revenue from Playtech’s B2B operations decreased by 12% during the first half to €229.7m (£209.4m), but the bigger decline was in B2C, where revenue plummeted 41% to €253.5m (£231.1m). The decrease in B2B gambling revenue was driven by a 30% downturn in UK revenue. This was partially offset by an 8% increase in non-UK regulated market revenue and a 33% increase in unregulated market revenue excluding Asia. Revenue from retail activities fell by 54% in the reporting period, narrowing to 43% when excluding the one-off hardware sales within the sports business in H1 2019. Playtech signed B2B deals with 50 new brands during H1 including Betsson, Stoiximan and Kindred, as well as rolling out with B2B partners in Greece, Spain, Bulgaria, Slovakia and Sweden.

In the B2C arena, Snaitech revenue fell by 46% annually to €215.5m (£196.4m) in H1 due to the closure of retail betting shops in Italy and the absence of sporting events. However, Snaitech online revenue jumped by 37% during the period, with a 41% increase in online bets when compared to H1 2019. White-label revenue increased by 21%, buoyed by a 61% increase in Playtech’s Sun Bingo brand, where revenue rose to €28.2m (£25.7m). Retail sport B2C revenue fell by 14% to €8.5m predominantly due to retail closures as a result of Covid-19. Playtech’s TradeTech business, which is up for sale, enjoyed a stellar H1, with revenue rising 123% to €87.3m, as well as a 130% increase in revenue from its B2C activities. Playtech CEO Mor Weizer said the “extraordinary trading conditions” encountered during the pandemic had brought the business closer to its licensees, while also increasing demand for the supplier’s portfolio of products. “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,” said Weizer. “These strengths, combined with early decisive action to focus on the safety of our employees and protect the group’s cashflow, 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,” he added. Peel Hunt analyst Ivor Jones said Playtech’s improving performance was down to the firm’s SaaS (software as a service) model beginning to pay off, highlighting the 50 clients recruited in H1. “In addition, Playtech went live in New Jersey after period end. However, in our view, these positives are offset by continued pressure on B2B sports, the B2C businesses and revenue from Asia. We reiterate our Hold recommendation,” Jones added. Playtech’s share price dipped by 7% in early trading on the London Stock Exchange to 363p.