Providing an update on its first-half performance and current trading, Playtech has revealed that despite the pandemic severely impacting some of the groups business, it had a resilient H1 2020 with adjusted EBITDA of more than €160m.
In the update, the firm highlighted that its online casino, bingo and poker businesses performed ‘very well’ in H1 2020. The ‘significantly heightened’ levels of activity in these segments it said to have begun to normalise as government lockdown restrictions were eased, however it states that activity remains above pre-COVID-19 levels.
Additionally, the ‘exceptional performance’ of TradeTech significantly benefited from increased market volatility and trading volumes during much of H1.
Mor Weizer, CEO, Playtech, commented: “Thanks to the outstanding response from our people and the early actions taken to protect the business, Playtech has demonstrated outstanding operational resilience during this challenging period.
“In addition to navigating near-term headwinds, we’ve continued to focus on setting up the business for success in the long-term. During the period, we’ve worked hard to add new brands, expand relationships with our existing customers and entered the New Jersey market with our long-standing strategic partner bet365.
“It is pleasing to see the impacted parts of the business starting to demonstrate positive momentum and I am confident the actions we have taken will help us emerge stronger and cement our market-leading position.”
Nevertheless, it wasn’t all positive in H1 with Playtech’s B2B sports business, which was heavily weighted towards retail, ‘severely impacted’ by closures in its main markets of the UK and Greece. This was intensified alongside the cancellation or postponement of major sporting events during the period.
Revenues have recovered slightly since the vast majority of betting shops in both regions, along with many sporting events, have returned albeit at a lower figure than pre-COVID-19 levels.
Snaitech was another part of the company which had a negative impact from the pandemic. Coming off a strong start to 2020 it lost ‘significant’ revenue in H1 due to retail closures and the lack of sporting events.
Yet due to the low fixed costs in the business and the revenues generated from online, as well as certain mitigating actions, the report highlights that Snaitech was able to minimise its wide impact.
Snaitech reported a very strong performance in July following the reopening of retail outs from June 15 as local governments across Italy began to ease restrictions. By early July, the majority of Snaitech’s retail locations had reopened.
Playtech’s business in Asia was negatively impacted in H1 by government restrictions put in place in the region due to the response to the outbreak, however, the firm has been benefiting since late March from a contract with a provider of live casino in the region.
The company previously announced that, due to the ongoing current circumstances related to COVID-19, it was appropriate to maximise liquidity within the company and suspended shareholder distributions until further notice.
The report highlighted that the share repurchase programme announced at the postponement of the FY 2019 results with immediate effect and the 2019 final dividend not being proposed at the AGM saved the company over €65m of cash outflows.
As of June 30, Playtech has over €600m of available liquidity including its revolving credit facility. In early Q3, Playtech received the remaining €36m from the sale of Snaitech land in Italy.