Playtech Issues Performance Update to Investors
Playtech, one of the leading game developers for the iGaming industry, has delivered an update to the investors on the company’s performance in the light of the COVID-19 situation.
The update issued shows several verticals that the company will potentially face and provides an insight of what the gambling industry is facing during this crisis.
The company is working hard to protect its cash-flow by pro-actively managing its capital expenditure and working capital. Playtech is also working on identifying opportunities for reducing costs that will not leave a mark on the long-term success of the company.
Playtech’s casino business, including live casino, has seen limited impact so far and the company is keeping track of the situation. Following the restriction on movement put in place by the Governments of the countries the developer operates in during the last few days, its poker and bingo ventures have experienced an increase in activity. However, the brand believes there will be a change in player behavior as the COVID-19 situation continues.
Possible Closing of Live Facilities
As live casino is a business where a significant number of people are required to work in the same place, it is possible that there will be disruptions as the COVID-19 situation progresses. Playtech’s facility in the Philippines has already been closed with its traffic being redirected to other facilities. The facilities in Riga are still operational but there is a risk that the facilities will have to be closed in the future. However, the company has contingency plans in case such a situation occurs.
Due to the most major sporting events being cancelled, the supplier’s B2B Sport business is being significantly impacted. The company predicts that this business will generate a loss of €4 million of Adjusted EBITDA per month before mitigation.
Also due to the cancellation of major sporting events and due to the closure of all Snaitech retail locations in Italy, Playtech’s B2C gambling has further been impacted. Even though there is a lack of sporting events, Snaitech continues to generate revenues from its online business.
Snaitech is currently expected to generate a loss of only €3 million of Adjusted EBITDA per month before mitigating actions. Prior to the impact of COVID-19, it was expected to generate an average profit of over €13m Adjusted EBITDA per month.
As far as Playtech’s White label business Sun Bingo goes, the business has seen a solid performance in 2020. The retail B2C Sport business HPYBET has been impacted as the retail venues in Germany and Austria have been closed. This company is set to experience a loss of €0.5 million Adjusted EBITDA per month while shops remain closed.
The officials from the supplier say that they will continue monitoring the situation closely and that they will provide their investors with further updates.
Source: Tonin, Derek. “Playtech updates investors as it rides coronavirus wave”. Calvin Ayre. March 19, 2020.