Playtech beats H1 expectations after Snaitech success
According to its H1 report for the six months to 30 June, revenue for the the gaming group was up 73% year-on-year to €792.3m. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was up 64% to €203.8m, with adjusted post-tax profit up 73% to €94.3m.
While reported post-tax profit was an encouraging €71.4m, this was down considerably on the €401.9m accrued in the first half of 2021 when the business saw a significant gain realised on options embedded in its agreements in the Americas.
Mor Weizer, Playtech’s chief executive, said: “I am delighted with the positive start that the group has made in the first half of 2022, delivering a financial performance ahead of our expectations with significant strategic and operational progress made against our objectives.
“Our success in the period was powered by our B2B business in the Americas and Europe, alongside yet another excellent contribution from Snaitech. We continue to make great strides in executing our US strategy, launching with Parx Casino in Pennsylvania, signing several exciting deals with leading global and US brands and progressing additional licence applications. The Americas remain one of the group’s biggest growth drivers, with continued strong revenue growth in Mexico as well as Brazil complemented by new launches and partnerships in the US, Canada and Peru.”
Snaitech revenue was up 182% year-on-year to €446.0m, which was also an increase on the most recent pre-Covid year of 2019. While online was down 5% to €117.5m, Playtech said that this was still a “resilient online performance” with retail premises now fully open. Retail and gaming machines took in revenue of €312.7m, compared to just €23.4m during the Covid-impacted start to 2021.
Adding in its white-label B2C offering, including Sun Bingo, total B2C gaming revenue was up 148% to €487.3m. Adjusted EBITDA was up 143% to €126.6m.
Playtech said very strong growth within regulated markets helped to deliver B2B revenue of €312.0m in the first half of the year, growing 17% (13% at constant currency).
Europe, excluding the UK, grew 39% at constant currency to €92.2m driven primarily by an impressive start at Holland Casino within the newly regulated Netherlands market. Americas continued to perform well with revenues of €69.8m and 37% constant currency revenue growth. Playtech said Caliente in Mexico remains a key driver for strong revenue growth in the Americas, and it is also excited by the significant opportunities afforded by the soon-to-be-regulated Brazil market.
Asia revenue declined 22% due to competitive pressures and the impact of lockdowns in parts of the region in the period, while the group incurred a bad debt provision of €15.4 million in H1 due to collection delays.
B2B gambling generated EBITDA of €77.2m, which was up 7% on H1 2021.
Weizer added: “We have navigated significant disruption and uncertainty in the period due to well-reported geopolitical tensions and inflationary pressures. For this, I would like to extend my sincere thanks to all of my Playtech colleagues for their hard work in the face of adversity.
“The macroeconomic outlook remains uncertain given geopolitical tensions and inflationary pressures, however we have seen our excellent performance in H1 continue into H2 and expect to see continued strong results from both our B2B and B2C businesses. As such, we are confident about Playtech’s prospects for the remainder of 2022 and beyond.”
Following the reporting period, Playtech completed the sale of its financial trading division Finalto to Gopher Investments for an enterprise value of US$250m. This sale is part of the group’s simplification strategy, as it focuses on the B2B and B2C gambling.
During the year, Playtech itself had also appeared as if it could be sold, as Asia-based investment group TTB Partners considered a bid following the collapse of an offer from Aristocrat. However, despite the support of Weizer, TTB declined to submit a formal offer.