Playtech evaluating Tradetech future as division struggles
Playtech has said that it is evaluating all options for its TradeTech Group after it revealed that struggles within the financials division during the 17 weeks to 31 October meant the business is set to miss its full-year earnings projections.
TradeTech Group saw a positive start to the second half followed by struggles in September and October, due to "highly challenging" trading conditions. This meant its full-year contribution is to fall below projections, with Playtech now evaluating all options for this area of the business.
Since publishing its interim results in August, Playtech said that trading within its core B2B gambling and Snaitech businesses continued to exceed management expectations, while trading in Asia remained stable. However, it did not release any top or bottom line figures for the period.
Regulated B2B gambling revenue for the four months was up 12% on a year-on-year and at constant currency basis, excluding acquisitions, aided by growth in hardware sales. Playtech noted that when excluding the impact of the increase in remote gaming duty in the UK, revenue was up 13%. The B2B division has today announced a new partnership with Colombian operator Aquila Global Group, operator of the Wplay brand in the country's regulated igaming market.
Playtech added that B2B operations had been strengthened by the business leveraging its private cloud infrastructure to make its products and services available to more than 1,000 brands and customers with which it had no existing relationship. Launched at the start of 2019, this new service gained momentum in Q3, with the supplier now expecting to launch with 40 brands in total during the six months to 31 December.
Snaitech, which Playtech acquired in August 2018, reported a strong operational performance for the four-month period. The business exceeded expectations, Playtech said, driven by its online offering.
The new advertising ban in Italy that came into effect in July of this year actually allowed Snaitech to increase its market share, with Snaitech achieving the largest market share across online betting and gaming for the first time in September and October.
Turning to Asia, Playtech said the current run rate in the region will contribute approximately €115m (£98.5m/$127.2m) to group revenue in 2019. However, it added, despite the ongoing implementation of an incentivisation programme designed to protect its market position, the region remains highly competitive.
Elsewhere, in terms of non-core assets, Playtech said it is reviewing options for its casual and social gaming business, including a possible sale of all or part of this division.
In related news, Playtech said it has successfully extended its revolving credit facility and increased the amount available to €317m. The facility is for a term of four years with a one-year extension option.
A €297m convertible bond issue matured on 19 November and was repaid from the proceeds of €350m 4.25% senior notes issued in March 2019. In addition, a €25m share buyback programme, that launched in August has been successfully completed, with Playtech returning €121m to shareholders in 2019 through dividends and buybacks.