Playtech reports €73m loss for 2020
Mexican market and Sun Bingo achieve double-digit growth despite B2B and B2C segments being severely impacted by Covid-19
Playtech recorded a €73m loss in 2020 as its B2B and B2C arms were severely impacted by the coronavirus pandemic.
The London-listed supplier posted an 11% year-on-year (YoY) decrease in B2B revenue from €553.9m to €494.8m, with a 26% reduction in UK-derived revenue and a 28% drop in Asian revenue cited as core drivers.
In terms of B2C operations, Playtech recorded a 34% YoY decrease in revenue, primarily driven by retail closures thanks to the pandemic.
Overall B2C revenue fell from €900.5m to €596.3m, with Snaitech accounting for €522m of this total.
Despite the retail closures in Italy, Snaitech was able to grow 2020 online revenue by 58% YoY as customers migrated to digital.
Elsewhere, Playtech’s EBITDA (including financial trading platform Finalto) decreased by 19% from €383.1m to €310.0m, while the €73m post-tax loss represents a 231% downturn from 2019.
Despite the strong financial performance of Finalto, with revenue growing 80% YoY, Playtech has discontinued the division preceding a sale as it is considered a non-core asset.
The supplier is in discussions with an Israeli consortium regarding the sale of Finalto, formerly known as TradeTech, for more than $200m.
Additionally, an impairment charge of €221.3 million was recognised against Finalto when “comparing its carrying value to expected proceeds”.
Elsewhere, Playtech noted the US was a key target market moving forward, after securing a partnership with Greenwood Gaming and Entertainment-owned Parx Casino in early 2021 to launch in Michigan, Indiana, New Jersey and Pennsylvania.
Playtech said its “comprehensive product offering is ideally placed to capture significant US market opportunity”.
In Latam, the group secured strategic partnerships in Guatemala, Costa Rica and Panama as it looks to increase its footprint in the region.
Indeed, Mexico was the star performer for Playtech, with full-year revenue up 85% to €56m.
Mor Weizer, Playtech CEO, labelled the group’s financial results as “robust” as he looked towards the future and away from the difficulties of the past year.
Weizer said: “The attitude and skill of our people, and the strength and diversification of our technology-led business model has enabled us to deliver a robust financial performance in spite of the challenging backdrop.
“The significant strategic and operational progress we achieved in 2020 has placed us in a strong position to capture the exciting market opportunities ahead,” he added.
In the UK, Sun Bingo was the standout B2C performer as revenue climbed 32% to €54m due to increased marketing of the brand during lockdown.
Peel Hunt’s Ivor Jones said the eventual sale of Finalto would no longer be able to buoy Playtech’s finances.
Jones said: “Our forecasts, which we are not changing today, are looking a little stretched because of the prolonged retail closures and there will be no further outperformance from Finalto to cushion the reported numbers.
“Playtech’s results show where the group is heading. Eventually it could be a major B2B supplier in the US, an online focused B2C market leader in Italy and a solid B2B content supply business to major online gambling companies around the world.
“We believe the share price is taking too much of this on faith and not paying attention to the challenges en route. We reiterate our reduce recommendation and 435p target price,” he added.
Playtech shares slipped 2% to 500p in early trading.