The Stars Group Posts the Latest Figures, Revealing an Interesting Q1
This amount represents an increase of 47.7% when compared to the corresponding period of 2018.
However, the operator’s operating income dropped by 46% to $61.5 million, while net earnings went down by 62.8% to $27.6 million.
Numbers Could Have Been Better
The Stars Group cited a number of factors as the main reason for these shortfalls – from unfavourable exchange rates to negative growths in markets such as Russia, where payment-blocking measures have been in effect for some time now. In addition to this, the company also blamed player-friendly results in the UK-based Sky Betting & Gaming, whose acquisition was completed last year.
These “margin swings” do occur from time to time, but it looks like the people at The Stars Group are worried by the long-term effect it could have on their business. Furthermore, Sky Betting & Gaming’s betting margins dropped by 4.2 points to 5%, although the number of stakes jumped by 16.3%. All in all, the company’s betting revenue in the UK dropped by nearly 40% to £57.9 million.
Poker vertical in the UK also recorded a decrease, dropping by 10.6% to £2.5 million. At the same time, casino revenue reached £69.3 million, which is an improvement of 23% over the same period of 2018. Overall revenue in the first three months of this year fell by 12.2% to £138.1 million, which in turn resulted in an operating loss of £19.7 million.
Another important news from the UK market was the announcement that Richard Flint was going to leave Sky Betting & Gaming at the end of June. Flint spent 18 years at the company and played a significant role in the last year’s acquisition made by The Stars Group.
International Segment Almost the Same
The Stars Group also announced it had spent substantial funds in order to promote its UK-based business before the Cheltenham Festival, which in turn had given excellent results. According to the company, around 90% of targeted customers have remained active in Q2.
The company’s international segment saw margins remain virtually unchanged, with stakes jumped by 23.4%. This increased betting revenue by 20% to $20 million. Unfortunately, poker revenue recorded a drop of around 13% to $214.1 million. Gaming dropped – by 7.3% to $98.9 million, while “other” revenue also went down – by 40% – to $7.5 million.
The company blamed the latest international results on currency fluctuations and on locally-imposed restrictions on certain methods of payment processing in countries such as Russia, Norway, Switzerland, and Poland.
When it comes to Australia, where The Stars Group significantly increased its presence, the BetEasy brand generated revenue of $61.2 million, which represents a stunning year-on-year increase of 459%. Gross profit climbed by 388% to $37.3 million, while the costs of market consolidation lead to an operating loss of $1.14 million in the three-month period ending on March 31.