Company Announcements

Trading and COVID-19 update

Source: RNS
RNS Number : 4590N
Playtech PLC
20 May 2020

Playtech plc

('Playtech' or the 'Company')

Trading and COVID-19 update

Strong Q1 performance & actions taken to ensure Playtech remains well placed

Playtech plc ("Playtech") today reports trading for the period from 1 January to 30 April 2020 and provides a further update on the impact of COVID-19 following the Company's previous announcements of 9 March and 19 March 2020.


§ Playtech took early and decisive action in response to COVID-19 and has performed better than envisaged in its update on 19 March 2020


§ Strong Q1 with Adjusted EBITDA of €117 million

§ In April 2020 Adjusted EBITDA was €23 million driven by TradeTech in addition to cash preservation measures

§ Monthly cash flow remained positive in March and April (excluding contingent consideration payments and cash from land sale)


§ Significant operational progress with existing and new Tier-1 licensees and over 20 new brands added

§ Over €600 million of cash available including fully drawn RCF; covenant light debt

§ Further €14 million received from Snaitech land sale with remaining €36 million expected in early Q3

§ Claire Milne appointed as Interim Chairman to provide continuity and stability

Response to COVID-19

As COVID-19 continues to impact the global economy, Playtech is doing everything it can to mitigate the effects of the outbreak on its staff, its partners and its business. Management has taken decisive action to ensure the health and wellbeing of its employees and to preserve cash flow, while continuing to provide customers with Playtech's leading technology to deliver what they need. Actions taken include the deferral or cancellation of capital expenditure, strict working capital management, suspension of shareholder distributions, salary reductions across the Company (including 20% for all members of the Board and the executive management team), reduced working hours in certain locations, significant reduction of marketing spending, reduced office and maintenance costs, and the renegotiation of timing of cash outflows including contingent consideration payments due in 2020.

Playtech enacted its business continuity plan in the early stages of the COVID-19 pandemic with many of its offices moving to remote working during February to protect employees' health and safety, while remaining locations transitioned in early March. Playtech has managed this transition while maintaining productivity levels and delivery deadlines.

Playtech has also made its Safer Gambling engagement tools and data analytics technology, including BetBuddy, available to all operators across the industry for free during the crisis.

Results for period 1 January 2020 to 30 April 2020

Overall, Playtech had an extremely strong Q1 2020 with Adjusted EBITDA of €117 million. This was in large part driven by the exceptional performance of TradeTech which, as stated on 19 March 2020, benefitted significantly from increased market volatility and trading volumes. In addition, the Group benefitted in January and February from a very strong performance from Snaitech and favourable sporting results.

Despite COVID-19 starting to severely impact some of the Group's businesses, the results for March as a whole were in line with the Company's original pre-COVID-19 expectations with strong performance from the Company's online business including Live Casino, its JV partners as well as a particularly strong performance from TradeTech. These positive trends have continued which has resulted in Adjusted EBITDA of €23 million for April, with Adjusted EBITDA for the first four months of 2020 totalling €140 million.

Safer Gambling

Playtech recognises that at this unprecedented time, the industry needs to provide an increased level of player engagement and data analysis to identify, support and protect customers who may be experiencing increased levels of risk. As a result, Playtech has made its Safer Gambling engagement tools and data analytics technology, including BetBuddy, available to all licensees during the COVID-19 pandemic.

Playtech is supporting its licensees and partners to ensure that pre-COVID Safer Gambling commitments and industry codes of conduct to further safeguard consumers during the crisis are met and are effective. Across our B2B and B2C businesses we are actively reviewing advertising and operational procedures and are strengthening safeguards to account for the changing environment and new risks arising during the crisis, for the benefit of our licensees and end consumers.

Divisional review - Current trading

Core B2B Gambling

In B2B, Playtech's online businesses have performed very well so far in 2020 while the retail elements of B2B have been severely impacted by retail closures in various countries. Playtech's online Casino (including Live), Bingo and Poker businesses have seen significant increases in activity. Playtech's largest Live Casino facility, which is in Riga, has remained open throughout the pandemic. As a result, not only has the Live Casino business experienced strong growth, it has been able to take on traffic from one of the most significant providers of Live Casino in Asia that was forced to close its main facility in Manila (see further details below).

Playtech's B2B Sport business is predominantly retail focused, through SSBTs, with its biggest markets being the UK and Greece. Betting shops in the UK currently remain closed. In Greece, the majority of retail locations have reopened, however the business remains impacted by the lack of major sporting events and competitions globally. The B2B Sport business is currently generating a loss of €3 million Adjusted EBITDA per month.

Despite the transition to remote working during the period, Playtech has continued to deliver on its operational objectives for 2020. Playtech has added new Tier 1 licensees including Betsson, Kindred and Svenska Spel. Playtech has added more than 20 new brands so far in 2020 and is on track to surpass its target of 50 for the year.

Playtech has extended its relationships to new products and/or geographies with existing customers including GVC and Fortuna while renewing contracts with licensees including Betfred and Mansion. Its structured agreement with Wplay in Colombia is progressing as planned with the next phase due to launch later in 2020. Playtech remains very excited about the opportunity this market presents. Live Casino has seen exceptional operational progress during the period with new customer signings and the launching of further tables and markets with existing customers such as GVC and PokerStars amongst others. In Poker, Playtech has seen a significant increase in activity and has added several major operators to its network so far in 2020.

B2C Gambling

Snaitech is currently performing better than was anticipated in the Company's announcement on 19 March 2020. While Snaitech continues to lose significant revenue from retail closures and the lack of sporting events, given the low fixed costs in this business and the revenues generated from online, as well as certain mitigating actions, Snaitech was only slightly loss making on an Adjusted EBITDA basis in April. The timing of the reopening of retail locations in Italy currently remains unclear. Snaitech achieved the number one market share position in the Italian sports betting market (retail and online combined) in Q1 2020, up from the number two position in 2019, showing its operational and brand strength.

As previously indicated, Playtech's white label business (predominantly Sun Bingo) has seen a strong performance so far in 2020.

Playtech's Retail B2C Sport business (HPYBET) is seeing restrictions eased with shops beginning to reopen in Germany and Austria.


Since Playtech's last trading update on 19 March, Playtech's revenues from Asia have been negatively impacted by government restrictions in China, Malaysia and the Philippines.

However, since late March these negative impacts have been more than offset by a contract with the leading provider of Live Casino in the region. The Philippines government's strict lockdown measures in Manila have forced many POGO license holders as well as Live Casino facilities to cease operating including Playtech's Live Casino facility in Manila. Playtech was not impacted by this closure as it was able to shift all traffic to its Riga facility. Playtech's ability to offer seamless integration to its facilities led to an agreement with the leading Asian provider of Live Casino. The provider integrated into Playtech's Live Casino feed to ensure that it could continue to provide its product to its customers, resulting in an increase in Playtech's revenue for April. The integration to Playtech's facility in Riga was completed within days giving Playtech access to the Asian provider's extensive distribution channel highlighting the strength of Playtech's Live Casino offering in being able to integrate a major new customer in a very short timescale. 

This temporary contract materially increased Playtech's revenues and EBITDA from Asia in April resulting in revenues of €8 million for the month. Playtech's revenue from Asia in May is expected to be approximately €6 million including a lower benefit from the Asian provider which began resuming its normal operations this month.


TradeTech continues to benefit from the recent increase in market volatility and generated Adjusted EBITDA of over €45 million in the period from 1 January 2020 to 30 April 2020. As mentioned in the Company's announcement on 19 March 2020, this performance already exceeds Playtech's FY 2020 expectations for this business.

TradeTech has also taken initial steps towards a more efficient balance sheet, which has released €10 million of cash that was previously tied up.

Balance sheet & liquidity

As announced on 19 March 2020, given the ongoing current circumstances related to COVID-19 the Board determined that it was appropriate to maximise liquidity within the Company and suspended shareholder distributions until further notice. The share repurchase programme announced at the FY 2019 results was postponed with immediate effect and the 2019 final dividend of €0.12 is not being proposed at today's AGM. Together these measures have saved the Company over €65 million of cash outflows.

Playtech has also renegotiated the payment terms of the contingent consideration payable related to the Playtech BGT Sports business. The total payment of €36.9 million was originally payable in H1 2020 but it was agreed that 50% will be deferred with 30% payable on 1 July 2020 and the remaining 20% on 1 October 2020.

Playtech has a 3x net debt / Adjusted EBITDA covenant and a 4x Adjusted EBITDA / interest cover covenant in its revolving credit facility, and a 2x Adjusted EBITDA / interest cover covenant in its bonds with the covenants tested semi-annually. As of 30 April 2020, Playtech had over €600 million of available liquidity including its revolving credit facility which has been fully drawn down. Playtech has received a further €14 million from the sale of Snaitech land in Italy and expects to receive the remaining €36 million in early Q3.

Mor Weizer, CEO, commented 

"So far this year, alongside actions taken to protect our people and our business, Playtech demonstrated remarkable operational resilience - demonstrating the strength and flexibility of our technology and our position in the industry. We have added new Tier 1 licensees, added over 20 new brands and expanded agreements with some of our largest existing customers. Given this strategic progress and the actions we have taken, I am confident we will emerge stronger as the current restrictions related to COVID-19 ease.

"Playtech also launched its new sustainable business strategy, Sustainable Success. The strategy will consolidate Playtech's position as a global leader in safer products, data analytics and player engagement solutions. Playtech has made safer gambling a core pillar of its strategy. At this time actions being taken by Playtech and the wider industry to advance safer gambling and raise standards are more important than ever.

"Finally, today marks Alan's last day as Chairman of Playtech and I would like to take this opportunity to thank him for his tireless commitment during his time on the Board since our IPO in 2006 and as Chairman for the last 7 years.'

Alan Jackson, outgoing Chairman, said:

"It is with great pride that I look back over my time as Chairman of Playtech. During my time with the Company the gambling industry has changed dramatically and Playtech has demonstrated the strategic vision to grow into a diversified and trusted technology leader in its industry. In these uncertain times the Board and I are confident Claire's appointment as Interim Chairman will bring the required experience, industry knowledge and stability needed."


- Ends -


For further information please contact:


Playtech plc


Chris McGinnis, Director of Investor Relations & Strategic Analysis


James Newman, Director of Corporate Affairs



+44 (0) 16 2464 5954


Headland (PR adviser to Playtech)


Lucy Legh, Stephen Malthouse

+44 (0) 20 3805 4822



About Playtech

Founded in 1999 and premium listed on the Main Market of the London Stock Exchange, Playtech is a technology leader in the gambling and financial trading industries.


Playtech is the gambling industry's leading technology company delivering business intelligence driven gambling software, services, content and platform technology across the industry's most popular product verticals, including, casino, live casino, sports betting, virtual sports, bingo and poker. It is the pioneer of omni-channel gambling technology through its integrated platform technology, Playtech ONE. Playtech ONE delivers data driven marketing expertise, single wallet functionality, CRM and responsible gambling solutions across one single platform across product verticals and across retail and online.


Playtech partners with and invests in the leading brands in regulated and newly regulated markets to deliver its data driven gambling technology across the retail and online value chain. Playtech provides its technology on a B2B basis to the industry's leading retail and online operators, land-based casino groups and government sponsored entities such as lotteries. As of June 2018, through the acquisition of Snaitech, Playtech directly owns and operates a leading sports betting and gaming brand in online and retail in Italy, Snai.


Playtech's Financials Division, named TradeTech Group, is a technology leader in the CFD and financial trading industry and operates both on a B2B and B2C basis.


Playtech has in total c.6,000 employees across 21 countries and is headquartered in the Isle of Man.



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