PTEC revenues increased 24% YoY, with EBITDA up 40% and net profit up 54%
Companies: Playtech PLC
Playtech (LSE: PTEC) reported a strong set of results with robust growth across the income statement on a constant currency basis, an increased dividend and a €150m special dividend.
On a constant currency basis, the attractive operational leverage is clear with YoY revenues increasing 24%, EBITDA up 40%, and Adjusted Net Profit rising 54%. The reported figures were impacted by FX movements as there was a "significant translation impact on sterling cash balances".
Playtech has increased their interim dividend 15%, a reasonable amount given the earnings increase, but it has also announced a €150m special dividend. This distribution may have been a result of previous acquisitions not completing but Management are clear in stating this distribution doesn't impact M&A activity. Chairman Alan Jackson stated:
"Due to the strength of its balance sheet and its continuing cash generation, Playtech is in a position to return capital to shareholders with no impact on its ability to make acquisitions. I am therefore pleased that Playtech will be returning €150 million to shareholders by way of a special dividend as well as increasing our interim dividend by 15% and introducing a progressive dividend policy to provide shareholders with more certainty and consistency of dividend payments."
The Gaming division contributes the majority of Playtech's revenue at over 90% or €306m of the €338m total revenue. It experienced strong performance with and 18% growth at constant currency. Within that number, the Casino business was the biggest contributor with 19% growth to €177m:
"This growth was mainly driven by mobile casino revenues, which more than doubled over H1 2015 and contributed 80% of total Casino revenue growth, as mobile penetration increased to 24% from 14% in H1 2015."
Shares are up c.3.5% this morning on the growth, earnings momentum and return to shareholders.
Mor Weizer, CEO of Playtech, commented:
"I am pleased to say that Playtech has once again delivered on both its operational and strategic objectives.
We have delivered strong growth in our Gaming division with significant new licensees and important renewals securing future growth and our Financials division is now through its period of transition and positioned for sustainable growth.
We have had a busy 2016 for M&A, most notably with the acquisitions of BGT and Quickspin in our Gaming division, both directly in line with our strategy. Our balance sheet strength and continuing substantial cash generation has enabled us to return €150 million through a special dividend, as well as increasing our regular dividend and introducing a progressive dividend policy, without impacting our M&A capabilities.
Our pipeline of opportunities remains strong, both organically and through M&A, which taken together with the future growth already "locked-in" provides us with confidence of strong growth in 2016 and beyond.
