Playtech Updates Market on Covid-19 Impact on Its Finances

Playtech's CEO Bonus Scheme Could Prompt New Shareholder Revolt

Gambling technology giant Playtech said today that it has suspended shareholder distributions until further notice as part of its efforts to protect its cash flow amid the global Covid-19 crisis and the impact the rapidly changing nature of the situation has.

The company said that it is working to pro-actively manage its capital expenditure and working capital as well as to identify opportunities for cost savings that will not affect its long-term success.

Providing update on the impact of the coronavirus outbreak on its B2B operations, Playtech said that it has seen limited impact on its Casino (including Live) business so far. The company recorded growth in activity in recent days in its Poker and Bingo businesses due to restrictions on people’s physical movement that were enforced in a number of countries around the world to help curb the spread of the dangerous virus.

Playtech warned that Live Casino is a gambling activity that requires a large number of employees to be present in the same location, which means that business could be disrupted as the Covid-19 crisis continues to rage.

The company’s Live Casino facility in the Philippines was shuttered earlier this week as the government of the Asian country ordered closures of gambling establishments and non-essential businesses.

Live Casino facilities in Riga and other locations are currently operational, but Playtech said that this might change in future.

The gambling technology provider said that its B2B Sport business has been significantly affected by the global coronavirus crisis due to the postponement/cancellation of most major sports events. Most recently, UEFA announced the postponement of Euro 2020 by 12 months as Covid-19 has been wreaking havoc on the global sports calendar.

Playtech estimates that its B2B Sports operation will generate monthly Adjusted EBITDA loss of €4 million before mitigation.

B2C Operations

Playtech also provides B2C gambling services through several brands and in several markets. In Italy, where its Snaitech operation was ordered to close its retail locations on March 9, business has further been impacted by the postponement of most sports events around the world.

Playtech said that Snaitech continues to generate revenue from its online operation, but online sports betting has been heavily impacted by the lack of major sporting events and competitions.

Snaitech is estimated to record Adjusted EBITDA loss of €3 million per month before mitigation. Prior the global Covid-19 crisis, the operator was expected to generate €13 million in Adjusted EBITDA per month.

Playtech’s white label businesses, mostly Sun Bingo, have seen “solid performance” so far, the company said in today’s market update.

As for its Retail B2C Sport business – HPYBET – it has been severely hit by the Covid-19 situation as its betting shops in Germany and Austria have been closed.

Playtech does not expect its performance in Asia to change in March. The company also noted that its TradeTech platform continues to benefit from the increased market volatility. The business has generated Adjusted EBITDA of more than €30 million so far this year.

Source: Coronavirus (COVID-19) update

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