The Stars Group has reported a series of financial increases across key segments as the firm praises the impacts of past acquisitions and an ever-growing US footprint, with its PokerStars brand set for added attention during the next 12 months.
Emerging from a tough Q4 for the group’s poker business across the international and UK reporting segments, significant impacts were due to the closure of PokerStars in Switzerland in July 2019, together with tougher operating conditions in other markets, such as Spain and Sweden, following regulatory changes in both
However, the company asserts that poker “remains an important driver,” with strategies in place regarding a deep pipeline of new product launches and marketing plans, in addition to expected new market expansion plans, which it believes will support the development of its international poker business throughout 2020 and into 2021.
Rafi Ashkenazi, The Stars Group’s CEO, backed up the plans: “In 2020, we plan to further enhance the global appeal of the PokerStars brand, including by launching the PokerStars sports brand, leveraging the operational capabilities of our Sky Betting & Gaming business and launching television advertising for PokerStars Casino.”
Total group-wide Q4 revenue increased 5.4 per cent to $687,962m (2018: $652,852m), with full-year figures soaring 24.6 per cent from $2.02bn to $2.52bn. Quarterly increases came primarily as a result of revenue growth within the United Kingdom and Australia segments, with the Sky Betting & Gaming and BetEasy acquisitions boosting full-year figures.
During the quarter, online sports betting was The Stars Group’s largest product vertical (39.1 per cent versus 34.3 per cent in 2018), followed by online casino (30.8 per cent versus 30.1 per cent in 2018) and online poker (27.5 per cent versus 32.8 per cent in 2018).
Q4 adjusted EBITDA was reported as $249.1m ($239.4m), ahead by 4.1 per cent, with its full-year performance seeing the firm grow 17.9 per cent to $921.1m (2018: $781m).
The US also formed a significant part of the company’s latest financial update, with the Fox Bet business, undertaken alongside Fox Sports, showing a financial performance in-line with previously disclosed expectations and reporting loss of approximately $40m for the year.
Ashkenazi continued: “In 2019, we continued to execute on our strategy to deliver long-term sustainable growth and become the world’s favourite igaming destination. We not only began to see the full-year benefits of our transformative 2018 acquisitions, but executed on delivering a landmark media partnership in the US, with the launch of Fox Bet, strengthening our position in this emerging market. We also focused on creating shareholder value through efficient capital allocation, prepaying over $450m of debt during the year.”
“In-line with our expectations, we exited 2019 with a strong fourth quarter with constant currency revenue growth of seven per cent year-over-year driven primarily by the continued impressive underlying performance of our primary sports betting brands.
“With sports betting now our largest product vertical and 81 per cent of our revenues coming from locally regulated or taxed markets, we are well positioned for diversified growth in 2020 and beyond.
“We entered 2020 with the full $100m run-rate of expected cost synergies from our 2018 Sky Betting & Gaming acquisition and earlier this month prepaid an additional $100m of debt, underpinning our ability to execute on complex integrations and the highly cash-generative nature of our business model.
“In addition to cost synergies, we have detailed plans in place to continue driving revenue synergies and to increase investments in product and marketing, giving us confidence in continued revenue growth in the years ahead.”