Internet betting software developer Playtech plc has released their first half 2016 financial results, noting a surge in growth in most verticals.
Key financial indicators for the half ending June 30th, 2016 were:
- Total revenues up 18% year-on-year at Euro 337.7 million;
- 24% revenue growth on a constant currency basis;
- Adjusted EBITDA up 27% y-o-y at Euro 143.8 million and up 40% on a constant currency basis;
- But Adjusted Net Profit and Adjusted EPS materially impacted by foreign exchange movements - down 31% at Euro 79.5 million; on a constant currency basis up 54% and 40% respectively;
- Significant translation impact on sterling cash balances
- Gross cash at period end of Euro 778 million (c.Euro 640 million after acquisition of BGT);
Corporate highlights for the period were:
- Acquisition of Quickspin for Euro 24 million announced in May 2016;
- Acquisition of 90% of BGT for Euro 138 million in July 2016;
- Current high cash balances enable company to return capital to shareholders without hampering its M&A capabilities; 57 Euro cents a share being returned;
- Interim dividend increased by 15% to 11 Euro cents, and the award of a special dividend of Euro 150 million (46 Euro cents a share) to be paid on 6 December 2016;
Operational highlights in the gaming division:
- Strong revenue performance with 18% growth at constant currency
- Good contribution from both existing and new licensees;
- Strong performance from structured agreements;
- Revenues from mobile of 29% in H1 2016 (H1 2015: 20 percent), with 54% of UK revenues from mobile;
- New licensees announced in 2016 including PokerStars and SunBets;
- Omni-channel agreement, including Sports and Casino, with Fortuna announced today for Czech Republic, Poland and Slovakia with other regulated markets to follow;
- Significant contracts renewed, with seven of top 10 licensees now on contracts which have at least three years remaining;
- Pipeline of new licensees and new structured agreements remains strong;
Financials division highlights
- Revenue of Euro 31.3 million in H1 2016 with Adjusted EBITDA of Euro 5.9 million;
- H1 2016 results reflect full impact of the business transition and improvements made due to regulatory changes;
- Markets Limited subsidiary now has the right platform for sustainable growth;
Current trading and outlook
- Average daily revenue in the Gaming division for the first 55 days of Q3 2016 was up 12% on Q3 2015 (19% at constant currency) and up 3% on Q2 2016 (6% at constant currency)
- Improvements made to Markets Limited have resulted in an improved performance in July and August to date;
- Management remains confident of strong growth in 2016 and beyond
Commenting on his company's performance Playtech Chairman Alan Johnson said, "Playtech has made significant progress in 2016 as we have delivered on our strategic objectives.
"The Gaming division continues to deliver strong growth, driven by our industry-leading Casino offering. We have "locked-in" future growth with important new licensees signed and significant contracts renewed. Seven of our top 10 licensees are now on contracts which have at least three years remaining and our pipeline of new licensees and structured agreements remains strong.
"First half results from our Financials division reflect the full-impact of the transitioning of the business and improvements made due to regulatory changes with Markets now having the right platform for sustainable growth.
"We have continued to execute on our M&A strategy with the acquisitions of BGT and Quickspin announced so far in 2016.
"We are pleased to announce the adoption of a progressive dividend policy, reflecting our confidence in the Group's anticipated growth and cash generation. We are also pleased to announce the return of Euro 150 million to shareholders through a special dividend with no impact on our M&A capabilities, enabled by our high cash balances and strong cash generation, whilst maintaining an efficient and flexible balance sheet.
"Given this progress, we remain confident of strong growth in 2016 and beyond."