Playtech Trading Update
The online gaming provider Playtech has announced its latest trading update and response to the global pandemic:
Summary:
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.
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