The Stars Group 2019 revenue up 24.6% on back of heavyweight M&A strategy
Sky Betting & Gaming acquisition triggers triple-digit rise in UK business to offset international market decline
The Stars Group has posted a 24.6% year-on-year (YoY) rise in its full year 2019 revenue, with total revenue hitting $2.5bn (£1.9bn).
The Toronto-listed operator attributed the rise in revenue growth within its UK and Australian business segments to the acquisition of Sky Betting & Gaming (SBG) in the UK and Bet Easy in Australia.
The Sky Bet purchase saw UK full-year 2019 revenue shoot up by 140.2% YoY during 2019, hitting $946.6m (£734.7m) from a prior 2018 high of $394.1m.
Triple-digit annual increases were reported in the group’s gaming and revenue businesses, with UK poker revenue rising 96.4% on a constant currency basis during 2019.
Australian full-year 2019 revenues increased by 39.3% during 2019 to $274.4m (£212.9m), from a prior 2018 high of $196.9m.
Overall international revenue fell 8.9% during 2019 to $1.31bn (£1bn) from a 2018 high of $1.44bn.
To improve international revenue heading into 2020, TSG intends to expand the range of products and marketing campaigns for its international betting business by leveraging increased expertise from the UK segment and leveraging the Sky Bet brand in Italy and Germany.
The operator is also planning to launch a new PokerStars sports brand in several global markets.
Meanwhile, gross profit rose by 16.9% to $1.8bn (£1.3bn) during 2019, with a 1.6% rise in operating income hitting $264m (£204.9m). Company net earnings climbed 156.8% from a $108m loss during 2018, to a positive net earnings figure of $61.8m (£47.9m).
Adjusted EBITDA increased 17.9% during 2019 from $780m last year to $921m (£714.9m). However, adjusted EBITDA margin fell from 38.5% in 2018 to 36.4% during 2019.
Stars Group CEO Rafi Ashkenazi said: “We’ve not only begun to see the full-year benefits of our transformative 2018 acquisitions but executed on delivering a landmark media partnership in the US, with the launch of Fox Bet, strengthening our position in this emerging market.”
Ashkenazi also confirmed the group would look to debut television advertising for PokerStars Casino during 2020.
Flutter Entertainment CEO Peter Jackson this week confirmed the company expects to complete its multi-million-dollar merger with The Stars Group by the end of Q3 2020.
Analyst firm Regulus Partners said the merger between the two heavyweights would create a group with “very strong positioning” across core markets and a manageable portfolio of regulatory risk.
“The Australian Competition Commission has given its informal approval, but this is probably the ‘easiest’ of the key markets,” the firm wrote.