Playtech upbeat after strong first half
By Josh White
Date: Monday 30 Sep 2024
(Sharecast News) - Playtech posted a strong first-half performance on Monday, with revenue increasing 5% to €906.8m and adjusted EBITDA rising 11% to €243m, driven by robust growth in its B2B division.
The FTSE 250 company's post-tax profit on an adjusted basis surged 23% to €105.4m, while net debt narrowed by 9% to €225.5m, resulting in a healthy leverage ratio of 0.5x.
It said its B2B segment continued to deliver exceptional results, with revenue up 14% to €382.2m, aided by growth in the Americas, where revenue surged 42%.
The division benefitted from a high operating leverage, leading to a 38% rise in adjusted EBITDA to €112.3m.
Playtech also made progress in the US and Canada, where revenue increased by over 200% year-on-year, driven by partnerships with major operators such as Rush Street, BetMGM, and DraftKings.
In the B2C segment, revenue remained flat at €532.4m, with Snaitech - its largest contributor - posting a slight 1% decline in revenue to €483.6m due to challenging market conditions and customer-friendly sporting results.
Despite the challenges, the Snai brand maintained its leading position in the Italian betting market.
Playtech recently reached a definitive agreement to sell its Snaitech business to Flutter for an enterprise value of €2.3bn.
On completion, expected by the second quarter of 2025, Playtech was planning to return €1.7bn to €1.8bn to shareholders through a special dividend.
The company said it also intended to use part of the proceeds to repay €350m in outstanding bonds, further strengthening its balance sheet.
Looking ahead, Playtech said it was on track to deliver full-year adjusted EBITDA slightly ahead of expectations, and was set to achieve its medium-term B2B EBITDA target range of €200m to €250m by the end of 2024, earlier than anticipated.
The company said its strong balance sheet and cash flow generation provided flexibility for future growth, both organically and through acquisitions.
"This set of results is further proof of the excellent progress we've made this year," said chief executive officer Mor Weizer.
"We've executed our strategy to grow and improve the B2B business, delivering broad-based growth with strong contributions across our key markets, high operating leverage and tight cost control.
"We're also delighted to have agreed a revised strategic agreement with Caliplay, our partner in Mexico, which ensures we are well placed to capture significant growth in the coming years."
Weizer said Playtech's plan to accelerate its presence in the US and Canada was already delivering, with revenues trebling in the period.
"We see a huge opportunity in this market and are pleased to have supported multiple customers with their own growth plans, while also delivering the first major milestone in our partnership with Hard Rock Digital.
"With US customers now able to experience Playtech-powered games in multiple states, soon our customers outside the US will get the opportunity to play games streamed direct from Las Vegas as part of our new agreement with MGM Resorts.
"A couple of weeks ago, we announced the sale of Snaitech to Flutter for €2.3bn and our plan to return €1.7bn to €1.8bn to shareholders."
Snaitech had been a key part of Playtech's growth in recent years, Mor Weizer said, delivering another solid performance in the first half, despite the impact of customer-friendly sporting results.
"We are excited about what the future holds for the remaining Playtech business and we see plenty of opportunities ahead of us.
"We have started the second half of the year well and are on track to be within our B2B adjusted EBITDA medium-term target range in 2024, earlier than expected.
"With a clear strategy, a strong balance sheet and a great team behind us, we remain very confident in Playtech's future prospects."
At 0941 BST, shares in Playtech were down 0.4% at 756p.
Reporting by Josh White for Sharecast.com.
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