Playtech announced total revenues of H1 2016 up 18%
Playtech (LSE: PTEC) announces its results for the six months ended 30 June 2016, together with a trading update for the period to 24 August 2016.
Financial summary
| H1 2016 | H1 2015 | Change(reported) | Change (const.currency)3 | |
| Revenues | €337.7m | €286.0m | +18% | +24% |
| Adjusted EBITDA1 | €143.8m | €112.9m | +27% | +40% |
| Adjusted Net Profit1/2 | €79.5m | €115.0m | -31% | +54% |
| Reported Net Profit2 | €48.8m | €83.9m | -42% | +84% |
| Adjusted diluted EPS4 | 22.9 €c | 36.1 €c | -37% | +40% |
| Interim dividend per share | 11.0 €c | 9.6 €c | +15% | NA |
Group financial highlights
| · | Total revenues up 18% vs H1 2015 on a reported basis:
– 24% revenue growth at constant currency – 17% revenue growth excluding acquisitions and at constant currency |
| · | Adjusted EBITDA up 27% on a reported basis and 40% at constant currency |
| · | Adjusted Net Profit and Adjusted EPS materially impacted by foreign exchange movements
– significant translation impact on sterling cash balances |
| · | Adjusted Net Profit and Adjusted EPS up 54% and 40% respectively on constant currency basis |
| · | Gross cash at period end of €778m (c.€640m after acquisition of BGT) |
Group corporate highlights
| · | Continued implementation of the Group’s M&A strategy
– acquisition of Quickspin for €24m announced in May 2016 – acquisition of 90% of BGT for €138m in July 2016 |
| · | Further strengthening of the Board with appointment of Claire Milne after the period end |
Dividend
| · | Cognisant of need for efficient balance sheet
– current high cash balances are consistently augmented by cash from operations – able to return capital to shareholders with no impact on M&A capabilities |
| · | 57 €c (or 50p at the current exchange rate) being returned to shareholders
– interim dividend increased by 15% to 11.0 €c as well as adoption of a progressive dividend policy to provide shareholders with more certainty and consistency of dividend payments special dividend of €150m (46 €c / 40p per share) to be paid on 6 December 2016 |
Operational highlights
Gaming division
| · | Strong revenue performance with 18% growth at constant currency
– good contribution from both existing and new licensees – strong performance from structured agreements |
| · | Revenues from mobile of 29% in H1 2016 (H1 2015: 20%), with 54% of UK revenues from mobile |
| “Locking-in” future growth
– important new licensees announced in 2016 including PokerStars and SunBets – omni-channel agreement, including Sports and Casino, with Fortuna announced today for Czech Republic, Poland and Slovakia with other regulated markets to follow significant contracts renewed, with seven of top 10 licensees now on contracts which have at least three years remaining |
|
| · | Pipeline of new licensees and new structured agreements remains strong |
Financials division
| · | Revenue of €31.3m in H1 2016 with Adjusted EBITDA of €5.9m |
| · | H1 2016 results reflect full impact of the business transition and improvements made due to regulatory changes |
| · | B2B momentum building with good KPIs in H1 2016 and a good pipeline of B2B business |
| · | Markets now has the right platform for sustainable growth
– moved from salesperson based approach to automated funnels for customer acquisition – further reductions in the cost base from June onwards |
Current trading and outlook
| · | Average daily revenue in the Gaming division for the first 55 days of Q3 2016 was up 12% on Q3 2015 (19% at constant currency) and up 3% on Q2 2016 (6% at constant currency) |
| · | Excluding acquisitions, average daily revenue in the Gaming division for the first 55 days of Q3 2016 was up 2% on Q3 2015 (10% at constant currency) and down 6% on Q2 2016 (down 2% at constant currency) |
| · | Improvements made to Markets Limited have resulted in an improved performance in July and August to date |
| · | Management remains confident of strong growth in 2016 and beyond |
Alan Jackson, Chairman of Playtech, commented:
“Playtech has made significant progress in 2016 as we have delivered on our strategic objectives.
“The Gaming division continues to deliver strong growth, driven by our industry-leading Casino offering. We have “locked-in” future growth with important new licensees signed and significant contracts renewed. Seven of our top 10 licensees are now on contracts which have at least three years remaining and our pipeline of new licensees and structured agreements remains strong. First half results from our Financials division reflect the full-impact of the transitioning of the business and improvements made due to regulatory changes with Markets now having the right platform for sustainable growth.
“We have continued to execute on our M&A strategy with the acquisitions of BGT and Quickspin announced so far in 2016. We are pleased to announce the adoption of a progressive dividend policy, reflecting our confidence in the Group’s anticipated growth and cash generation. We are also pleased to announce the return of €150m to shareholders through a special dividend with no impact on our M&A capabilities, enabled by our high cash balances and strong cash generation, whilst maintaining an efficient and flexible balance sheet.
“Given this progress, we remain confident of strong growth in 2016 and beyond.”
Source: Playtech
