Playtech has upgraded its earnings forecast due to impressive growth in its B2B sector. The gambling software firm plans to return €1.7bn (£1.42bn) to shareholders following the sale of its Italian division, Snaitech.
The company’s revenue rose by 5% in the first half of the year. Meanwhile, adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 11%.
Playtech’s Financial Performance
Playtech has reported an impressive uplift in its financial performance. The gambling software company saw a notable increase in earnings and revenue in the first half of the year. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 11 per cent to €243m (£202m). This growth is attributed to robust performance across its business-to-business (B2B) segment.
Revenue increased by five per cent, reaching €906.8m, up from €859.6m. The company’s post-tax profit experienced a significant rise of 23 per cent, climbing to €105.4m. Additionally, Playtech reported an improvement in diluted earnings per share, which went up by 22 per cent to 33.6 cents from 17.5 cents. CEO Mor Weizer noted, “This set of results is further proof of the excellent progress we’ve made this year.”
B2B Segment Growth
Playtech’s strategic emphasis on its B2B operations has yielded excellent results. The B2B business has shown widespread growth, with substantial contributions from major markets. Playtech’s strategy included achieving high operating leverage and maintaining tight cost controls, which has significantly boosted its profitability.
The company has been actively expanding its presence in the United States and Canada. Revenues in these regions have tripled during the period under review, demonstrating the effectiveness of Playtech’s market penetration strategy. Weizer commented, “Our plan to accelerate our presence in the US and Canada is already delivering exceptional results.”
Snaitech Sale
Playtech has finalised the sale of its Italian division, Snaitech, to Flutter for €2.3 billion. The deal is expected to close by mid-2025. This strategic move is projected to return €1.7 billion to shareholders and pay off €350 million of an outstanding bond.
CEO Mor Weizer praised Snaitech’s role in Playtech’s growth. He stated, “Snaitech has been a key part of Playtech’s growth in recent years.” Despite a slight dip in Snaitech’s revenues by 1 percent, from €488.4 million to €483.6 million, the division performed solidly in the first half.
Playtech experienced “good growth in wagers against a tough comparative in the first half of 2023,” although this was moderated by customer-friendly sporting results at the year’s start. Weizer remains optimistic, saying, “We are excited about what the future holds for the remaining Playtech business.”
Shareholder Returns
The sale of Snaitech will lead to significant returns for Playtech’s shareholders. The company has outlined a plan to distribute €1.7 billion to shareholders from this transaction. This move demonstrates Playtech’s commitment to enhancing shareholder value.
In addition to the shareholder returns, €350 million from the sale will be allocated to paying down an existing bond. This strategic financial management is expected to strengthen Playtech’s balance sheet, contributing to its long-term financial stability.
Market Potential and Future Prospects
Playtech’s strategic focus on expanding its market reach has opened new opportunities. The company sees significant potential in the North American market, particularly in the US and Canada. Weizer indicated that the company’s revenues in these regions have already shown a threefold increase.
The firm is well-positioned with a robust balance sheet and a skilled team. Weizer expressed confidence in the company’s future, saying, “With a clear strategy, a strong balance sheet and a great team behind us, we remain very confident in Playtech’s future prospects.”
Playtech’s vision includes further market expansion, innovation in product offerings, and leveraging its strong financial position to achieve sustained growth.
CEO’s Vision
CEO Mor Weizer has a clear and strategic vision for Playtech’s future. He aims to consolidate the company’s market position while also exploring new growth avenues.
Weizer’s confidence stems from Playtech’s strong financial health and strategic initiatives. He emphasised the importance of a skilled team and a robust operating strategy in driving the company’s success.
Weizer remarked, “We see a huge opportunity in this market.”
Playtech’s financial performance and strategic decisions highlight its robust market position. The planned shareholder returns following the Snaitech sale demonstrate the company’s focus on delivering value.
With a clear vision and strong financials, Playtech is well-prepared for future growth and opportunities.
