Playtech announces strong growth in H1 

Playtech (LSE: PTEC) today announces its results for the six months ended 30 June 2017, together with a trading update for the period to 22 August 2017.

Financial summary

 

 

 

 

 

Group financial highlights

• Total revenues up 25% vs H1 2016 on a reported basis:
  – 30% revenue growth at constant currency
  – 10% revenue growth excluding acquisitions and at constant currency
• 50% of Group revenues were regulated in H1 2017 (FY 2016: 48%)
• Adjusted EBITDA up 19% on a reported basis and 24% at constant currency
• Adjusted Group EBITDA margin of 40.5% (H1 2016: 42.6%)
  – in line with guidance given at FY 2016 results
  – “core” Gaming margin (excluding acquisitions / white-label / Casual) of 51% (H1 2016: 49%)
• Adjusted diluted EPS up 21% at constant currency
• Gross cash at period end of €536 million (December 2016: €545 million) and €376 million when adjusted⁴ (December 2016: €392 million)
• Interim dividend per share up 10%

Operational highlights

Gaming Division

• Strong revenue performance with 28% growth at constant currency led by flagship Casino offering
  – double-digit underlying growth, with a particularly strong performance in Asia
  – recent acquisitions integrated and performing in line with expectations
• Regulated Gaming revenues of 44% (H1 2016: 39%)
• Online software revenues from mobile of 38% in H1 2017 (H1 2016: 29%)
• Significant contracts renewed including with Paddy Power Betfair, Sky Bet and Betfred in H1 2017
• Landmark Sports contract signed with Greek operator OPAP
• Industry leading LIVE offering launched with world’s largest Live Casino in Riga
• Sun Bingo contract remains challenging
• Pipeline of new licensees focussed on large, high-quality omni-channel opportunities

Financials Division

• Momentum from 2016 continued into H1 with strong performance and improved KPIs
• B2B offering further enhanced with acquisition of Alpha Capital Markets assets post period end
• TradeTech Group brand launched to reflect the full B2B and B2C capabilities of the Financials Division

Current trading and outlook

• Management is confident of a strong performance in 2017 driven by both organic growth and the acquisitions made in 2016 and 2017, albeit with normalised levels of growth in the second half from Asia following unusually high levels of activity in the first half
• Average daily revenue in the Gaming Division for the first 53 days of Q3 2017, traditionally the slowest part of the year, was up 1% on Q3 2016 (6% at constant currency) and down 9% on an unusually strong Q2 2017 (down 6% at constant currency)
• Excluding acquisitions, average daily revenue in the Gaming Division for the first 53 days of Q3 2017 was down by 1% on Q3 2016, increasing 3% at constant currency
• The Financials Division is trading in line with expectations

Alan Jackson, Chairman of Playtech, commented:

“The proven strength of the Playtech model was once again demonstrated with a strong H1 performance driven by both underlying growth and recent acquisitions. As always, Playtech’s performance has been converted into strong cash generation enabling a 10% increase in the interim dividend, in line with the progressive dividend policy.

“The first half of the year saw Playtech’s Gaming Division deliver strong growth with double-digit underlying growth and recent acquisitions integrated and performing in line with expectations. Playtech has also continued to execute on its industry leading omni-channel solution by deepening its offering in key verticals with the integration of Playtech BGT Sports creating a fully integrated best-in-class sports technology solution and the launch of the world’s largest Live Casino studio in Latvia, revolutionising the offering in a growing and dynamic channel.

“As with the Gaming Division, momentum in the Financials Division continued with improvements across all KPIs. The announced acquisition of assets from Alpha brings an important new B2B revenue stream and the creation of TradeTech Group as our operating and corporate brand for the business is an important milestone and better reflects the broadening of the division’s offering towards a full turnkey B2B financial trading solution.

“Taken all together, this proven platform for growth across the business has again delivered a strong performance and management remain confident of further strategic progress in the second half of 2017.”

¹ Adjusted numbers relate to certain non-cash and one-off items including amortisation of intangibles on acquisitions, professional costs on acquisitions, finance costs on acquisitions, deferred tax on acquisitions and additional various non-cash charges. The Directors believe that the adjusted profit measures represent more closely the consistent trading performance of the business. A full reconciliation between the actual and adjusted results is provided in Note 4 of the financial statements
² Attributable to the owners
³ Constant currency numbers exclude the exchange rate impact on the results by using previous period relevant exchange rate and exclude the total cost/income of exchange rate differences recognised in the period
⁴ Adjusted gross cash is net of cash held on behalf of clients, progressive jackpots and security deposits

Source: Playtech – Results for the six months ended 30 June 2017

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