Playtech Records Growth Despite Problems in Asia
The Isle of Man-based supplier of online gaming and sports betting software Playtech has announced the company’s financial results for the first half of this year, revealing a 4% increase in revenue.
The positive result was achieved despite the problems the firm was experiencing with its Asian operation.
The gaming giant posted a 13% reduction in its EBITDA to $168.5 million, while its adjusted profit was at $97.9 million, which represents a drop of 34% when compared to the corresponding period of 2018. It should be noted that the Asian market had a significant impact on these numbers.
Exclude Asia And the Numbers Look Just Fine
But, once Asia is out of the picture, Playtech’s figures tell a different story. Excluding the world’s most populous continent, the company’s revenues were up by 35%, with regulated markets bringing 69% of the earnings. According to Playtech, its regulated business should account for 80% of its revenues by the time the year ends.
During the six-month period ending on June 30, 2018, Playtech made several important moves, including the completion of the Snaitech acquisition. The purchase was completed on June 5, while the company’s 100% ownership of the Italian operator was taken from August 3. The company doesn’t plan to stop here and is likely to continue its acquisitions strategy in the coming period.
Playtech BGT Sport division recorded a yearly rise in revenue of 27%, while Sun Bingo took home 28% more money than in the same period of 2018. During this period, Playtech signed a number of new agreements, most notably the one with Gala Leisure Buzz Bingo.
Problems in Asia came as no surprise, bearing in mind July’s profit warning when the company stated that average daily revenue on the continent would continue to be impacted by an increasingly competitive backdrop.
An aggressive pricing environment caused by an influx of new market entrants has affected the company’s figure, while the results in Malaysia – one of the key markets for Playtech in Asia – haven’t been encouraging.
Away from Asia, average daily revenue in the B2B Gaming Division went 6% up, which was cited as the main driving factor in this period.
Is the Company’s Governance Satisfied?
Commenting on the company’s latest financial results, Playtech’s chairman Alan Jackson said the company had had an extremely busy first half of the year with important operational progress and new licensee wins in key strategic markets, the United Kingdom, Europe and Latin America.
Jackson stated the continued progress was resulting in higher quality earnings for Playtech with group revenue now 69% regulated, and added regulated revenue should increase to circa 80% in this year.
He pointed out the progress was marked against the disappointing market conditions in Asia, but he stressed the headwinds in the Asian market were not reflective of the core strength of the Playtech model as the regulated segment continued to report organic growth and encouraging momentum.
He also stated the Snaitech purchase had been extremely important for Playtech, delivering a cornerstone presence in the largest, and one of the fasted growing gambling markets in Europe.