The Stars Group shares drop 12% on lowered profit and revenue guidance
Q2 revenues hampered by currency exchange and continued disruption in grey markets
The Stars Group saw its share price drop 12% in early trading this morning after the operator lowered its profit and revenue guidance for 2019.
In its H1 update today, Stars warned FY19 revenues could come in up to $200m below previous estimates, with a new range of to $2.5bn-$2.75bn.
FY19 EBITDA forecasts were also lowered from $960m-$1010m to $905m-$930m
The downward revision was prompted by several factors including negative foreign exchange fluctuations, a historically low margin in the UK in Q1, “slower than planned” recovery in certain disrupted markets like Russia and delays in launching newly licensed operations in certain jurisdictions, such as Switzerland.
The PokerStars segment of the business saw Q2 revenues fall 2.5%cc to $322m with declines in poker, while Sky Betting and Gaming saw revenues climb 13% in the period to £196m.
Australia (BetEasy) grew year-on-year 5% to $64m.
Stars CEO Rafi Ashkenazi said: “The second quarter underpinned the success of last year’s acquisitions, particularly with the record performance of Sky Betting & Gaming and our increasing product and geographic diversification, as we continue to transform and position the business to execute on our strategy for strong, sustainable future growth.”
“2019 has been and remains a year of integration, execution and debt reduction.
“We are committed to those key strategic priorities for the rest of the year while we also build our foundation and momentum to become a market leader in the US.”
Ashkenazi added: “We are confident that the actions we have taken over the last year, and are pursuing now, including to reassess our fixed cost base, put us in a strong position to deliver our mid-term growth targets from the end of 2019.”
For more information on TSG’s results, read the EGR live blog.