The COVID-19 outbreak has caused a material change in customer behaviour in two of Playtech’s (PTEC) largest markets, prompting the gambling technology group to warn its 2020 results will likely be below market expectations.
The virus impacted recent trading for Snaitech, the group’s Italian business-to-consumer division, as well as pushing down revenues in Asia. In response, broker Peel Hunt downgraded its 2020 forecasts for adjusted pre-tax profit 24 per cent to £136.8m, with an EPS figure reduced 22 per cent to 36p. Prior to the disruption, Snaitech saw 31 per cent growth in online stakes through 2019, while Sun Bingo grew revenues by almost a fifth.
Higher margin areas such as sports and live casino drove sales growth in the group’s core business-to-business gambling division up 15 per cent in 2019. Here, however,‘core’ excludes the group’s operations in unregulated Asia. Include the group’s Chinese businesses and revenues, and sales fell 3 per cent in constant currency. Management believes the market is underpenetrated and has been investing in improving its technology in a bid to access it. As a result, the division delivered more than 50 new brands in 2019.
| PLAYTECH (PTEC) | ||||
| ORD PRICE: | 266p | MARKET VALUE: | £ 808m | |
| TOUCH: | 265.4-266p | 12-MONTH HIGH: | 462p | LOW: 238p |
| DIVIDEND YIELD: | 5.9% | PE RATIO: | 69 | |
| NET ASSET VALUE: | 404p* | NET DEBT**: | 29% | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
| 2015 | 0.63 | 142 | 44.5 | 28.5 |
| 2016 | 0.71 | 200 | 61.4 | 32.7 |
| 2017 | 0.81 | 267 | 78.9 | 36.0 |
| 2018 (restated) | 1.23 | 188 | 40.7 | 24.1 |
| 2019 | 1.51 | 48.2 | 4.4 | 18.1 |
| % change | +23 | -74 | -89 | -25 |
| Ex-div: | 30 Apr | |||
| Payment: | 29 May | |||
| *Includes intangible assets of €1.5bn, or 494p a share £1=€1.15 **Includes lease liabilities of £90.7m | ||||
