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(Alliance News) - Playtech PLC on Thursday reported a weaker performance in the first half of 2020, mostly as a result of disruption caused by the Covid-19 pandemic, and the lockdown implemented to curb its spread.
Shares in the online gaming and sports betting firm were down 6.1% at 367.80 pence on Thursday in London.
For the six months to the end of June, pretax profit fell by 71% to EUR10.5 million from the restated EUR36.0 million the year before.
Even on an adjusted basis, pretax profit still declined by 45% to EUR52.4 million from EUR96.1 million. Playtech's profit performance was hurt by a rise in interest expenses on bond loans, leading to finance costs for the period increasing by 18% to EUR35.2 million.
In addition, revenue declined by 23% to EUR564.0 million from EUR727.8 million, as a strong performance in January and February from Snaitech in Italy and favourable sporting results were more than offset by the effects of the pandemic from mid-March to June, when most sporting events were cancelled.
Revenue from the B2B Gambling business fell by 13% due to a 54% fall in revenue from retail activity and also a fall in Asian revenue a constant current due to government restrictions in response to the pandemic.
Within B2C Gambling, Snaitech revenue fell by 46% to EUR215.5 million and Retail Sport B2C's revenue dropped by 14% to EUR8.5 million, both divisions being weaker as a result of retail closures.
To preserve cash flow, Playtech suspended shareholder distributions in February until further notice and postponed its share repurchase programme indefinitely.
Looking ahead, Playtech said its business is performing well, with stronger trading in July and August. Online trading is expected to continue to perform strongly, but management remains cautious on its outlook for retail.
"The attitude of our people coupled with the resilience and diversification of our technology-led business model has delivered a strong first half performance during an extremely challenging period for the industry. These strengths, combined with early decisive action to focus on the safety of our employees and protect the group's cash flow, has placed us in a strong position to benefit from the recovery and to capture the exciting market opportunity in the US and Latin America," said Chief Executive Officer Mor Weizer.
"The extraordinary trading conditions during the pandemic have brought us closer than ever to our licensees and we have seen even greater demand for our products, with an increased focus across the globe on intelligent software and personalised player journeys and protection tools," Weizer added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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