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(Alliance News) - Playtech PLC on Thursday warned the coronavirus outbreak is expected to hit results for 2020, as it reported a fall in profit for 2019 on impairments.
Shares in the online gambling and sports betting software firm were down 12% at 270.90 pence in London on Thursday.
Revenue for 2019 rose 23% to EUR1.51 billion, up 22% at constant currency.
Adjusted earnings before interest, tax, depreciation and amortisation was up 11% to EUR383.1 million, but pretax profit slumped to EUR48.2 million from EUR187.7 million.
Profit was hit by the impairment of intangible assets of the Markets and Alpha cash generating units, totalling EUR90.1 million. In addition, depreciation and amortisation costs grew to EUR215.7 million from EUR150.7 million.
"Our Core B2B Gambling business reported strong growth in 2019. In addition we made further strategic progress by entering newly regulated markets, signing new customers, expanding existing relationships and continuing to innovate with new product launches. Together these are laying the foundations for our future growth. In our B2C Gambling business, Snaitech had a fantastic 2019 and continues to gain market share and reached the number one market share position for online betting and gaming in Italy in second-half 2019," said Chair Alan Jackson.
Playtech paid a dividend of 18.1 cents for 2019, down a quarter on 24.1 cents the year before, though it has also approved a share repurchase programme of EUR40 million. Total shareholder returns for the year amounted to EUR120.4 million, up 4% on EUR115.7 million in 2018.
Turning to current trading, core B2B Gambling revenue was up 5% on a year ago for the first 55 days of 2020. Snaitech, its B2C business in Italy, has seen strong start to 2020, the firm said, though the coronavirus outbreak has hit recent trading.
Around 40 countries have now been affected by the virus which is believed to have originated in a market in Wuhan, China and the global death toll now stands at about 2,800 with more than 80,000 infected.
Asia revenue in February is expected to be EUR7 million due to Covid-19, said Playtech.
"Playtech continues to monitor developments in Asia closely including the negative impact of Covid-19 in February. While operating at a lower run rate than before, Playtech's Asia business remains high margin and highly cash generative," the company said.
The FTSE 250 constituent is also monitoring the virus in Italy.
For 2020 as a whole, Playtech warned results are likely to be below market expectations, having seen a "material impact" in the last two weeks from changes in normal customer patterns due to Covid-19. The virus is "significantly affecting" two of its largest markets, it added.
By Lucy Heming; lucyheming@alliancenews.com
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