North America and Caliplay boost Playtech revenue gains in H1
Revenue for the six months to 30 June was 5.5% higher than the previous year at €906.8m (£756.1m/$1.01bn). Also in H1, Playtech saw earnings grow, while it turned a net loss last year into a profit.
B2B growth is clear to see. Total B2B revenue for the half was 14.3% higher year-on-year at €382.2m.
Much of this success, CEO Mor Weizer said, was down to a focus on driving the B2B business. Echoing comments made in a trading update earlier this month, Weizer said the H1 results are “further proof” of the progress Playtech has made.
“We’ve executed our strategy to grow and improve the B2B business, delivering broad-based growth with strong contributions across our key markets, high operating leverage and tight cost control,” Weizer said.
North America growth and Caliplay agreement
Weizer also made reference to growth across North America. B2B revenue in both the US and Canada was up over 230% year-on-year in H1. This only makes up a small portion of B2B revenue but Weizer said there is “huge opportunity” for more growth.
“Our plan to accelerate our presence in the US and Canada is already delivering, with revenue trebling in the period,” Weizer said. “We see a huge opportunity in this market and are pleased to have supported multiple customers with their own growth plans, while also delivering the first major milestone in our partnership with Hard Rock Digital.
“With US customers now able to experience Playtech-powered games in multiple states, soon our customers outside the US will get the opportunity to play games streamed direct from Las Vegas as part of our new agreement with MGM Resorts.”
In addition, Weizer welcomed the news that Playtech has ended its dispute with Caliplay. On 16 September Playtech confirmed a revised strategic agreement with Mexico-facing operator Caliente over their Caliplay joint venture. The deal ending the two parties’ years-long legal dispute.
“We’re also delighted to have agreed a revised strategic agreement with Caliplay, our partner in Mexico, which ensures we are well placed to capture significant growth in the coming years.”
“Exciting” future with Playtech selling Snaitech to Flutter
Its sale of Snaitech to Flutter for €2.3bn will transition Playtech into an “exciting” position as an almost entirely B2B provider.
“Snaitech has been a key part of Playtech’s growth in recent years,” Weizer said. “The team delivered another solid performance in H1, despite the impact of customer-friendly sporting results.
“We are excited about what the future holds for the remaining Playtech business. We see plenty of opportunities ahead of us.”
The transaction is not due to close until Q2 of next year.
Breaking down B2B growth H1 at Playtech
Taking a closer look at how Playtech performed in H1, additional B2B highlights include a 34% increase in Latin America, buoyed by the performance of Caliplay, with the €128.3m generated being the largest revenue source for B2B. Total Americas B2B revenue increased 42% to €141.6m.
Elsewhere, revenue in Europe, excluding the UK, remained level at €97.8m. Here, Playtech said the loss of the OPAP contract in Greece and change in commercial terms with a Polish operator were offset by growth in Spain, Ireland and Italy.
As for the UK, revenue edged up 4.9% to €66m. Playtech says the UK is showing growth across existing and new licensees, mainly in live, but growth was slightly offset by a drop in revenue from Entain, as it continues to insource its SSBTs.
A further €5.2m in B2B revenue came from operations across the rest of the world, a rise of 57.8%.
What about Snaitech and the B2C business?
Looking at B2C, total revenue in H1 was level with last year at €532.4m. This was despite a 1.0% drop in Snaitech revenue to €483.6m, with retail declines offsetting growth in online.
Elsewhere within the B2C business, Sun Bingo and other B2C operations drew €39.9m in revenue, up 17.0%.
An additional €9.6m in revenue came from the HappyBet business, down 6.8%. Playtech put this down to the rationalisation of retail outlets in Austria and Germany.
Playtech back in the black
In terms of costs, spending was – overall – higher across the business. However, the rise in revenue meant pre-tax profit increased by 17.5% to €93.5m in H1.
Playtech paid €83.5m in tax, leaving a net profit of €10m, up 222.6% from €3.1m last year.
On top of this, Playtech benefited from €5m in foreign exchange gains, whereas last year this impacted the business negatively. As such, total comprehensive net profit for H1 hit €15.4m, in contrast to a €1.9m loss in 2023.
In addition, Playtech noted a 10.5% increase in adjusted EBITDA to €243m.
“We have started the second half of the year well,” Weizer said. “We are on track to be within our B2B adjusted EBITDA medium-term target range in FY 2024, earlier than expected.
“With a clear strategy, a strong balance sheet and a great team behind us, we remain very confident in Playtech’s future prospects.”