Playtech Q1 results boosted by higher trading volumes

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Online gaming provider Playtech plc reported strong results during the Jan 1 to Apr 30 period, with its businesses, particularly TradeTech benefitting from increased market volatility and trading volumes.

Despite the impact of Covid-19 on the group’s businesses, the results for March were in line with the company’s pre-Covid-19 expectations, with a strong performance from the company’s online businesses including Live Casinos and TradeTech. 

On the live casino front, Playtech said that the forced closure of live casino facilities in Manila has proven to be beneficial for Playtech, after securing a contract with a leading provider of live casino in the region and thus shifting all of its traffic to Playtech’s Riga facility. 

The temporary contract resulted in revenues of GBP 8 million (US$9.7 million) in April and is expected to reach GBP6 million in May, due to the Asian provider resuming normal operations this month. 

The adjusted EBITDA for 20Q1 reached GBP117 million. 

Despite the positive results, the company, like many others, has had to make some cuts to expenditure to weather the Covid-19 storm. 

According to latest trading update, Playtech said 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 the timing of cash outflows including contingent consideration payments due in 2020.

Most of their staff had moved to work-from-home conditions since February. 

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.”