Playtech halves dividend as interim profits slide

(Sharecast News) - Playtech on Thursday halved its dividend as it reported that interim profits plummeted by almost €100m on the back of rocketing distribution costs, though revenue was boosted by its SnaiTech SpA acquisition
The online gaming and sports betting firm posted a profit before tax of €28.0m for the six months ended 30 June, down 77% from the same period last year, as distribution costs doubled from €246.0m to €492.8m.

Adjusted profit before tax, which remove one-off costs such as acquisition costs, dropped from €98.1m to €88.5m.

Consequently, the FTSE 250-listed company halved its interim dividend from 12.1 euro cents per share to 6.1 cents.

However, revenue increased by 69% to €736.1m after being boosted by SnaiTech, which was acquired in July 2018 and recorded 26% growth in adjusted EBITDA to €74.7m during the first half of the year.

With adjusted EBITDA having increased by 31% to €190.6m, Playtech reiterated its full year guidance for adjusted EBITDA to fall in the range of €390m to €415m, but added that its Asian business is on course to contribute revenue of approximately €115m against the €150m expected at the start of the year.

Alan Jackson, chairman of Playtech, said: "Playtech's combination of scale and leadership in technology continues to deliver growth and strategic progress in our core gambling businesses. In H1 this continued progress has driven group regulated revenue to a new high of 87% (H1 2018: 69%). In our B2B business double digit growth in regulated markets outside of the UK has been accompanied by landmark new licensee wins in key regulated markets, laying the foundations for future growth."

Analysts at Peel Hunt left their forecast of full year adjusted EBITDA unchanged at €399m, stating that SnaiTech had been their expectations and adding that underperformance from the Asian business was clearly being offset by stronger performance elsewhere.

Playtech shares were down 0.13% at 384.40p at 1144 BST.