19th Mar 2020 10:25
(Alliance News) - Playtech PLC on Thursday suspended shareholder distributions as it said it expects trading to be hurt by the Covid-19 outbreak.
The betting and gaming firm said its Live Casino business is likely to be held back. A facility in the Philippines has been closed, adding facilities in Riga, Latvia, and other locations are also likely to close.
The B2B Sport business - expected to contribute 10% of the company's adjusted earnings before interest, taxes, depreciation, and amortization in 2020 - has been "significantly impacted" due to the cancellation of most major sporting events and competitions worldwide, and is expected to post a loss of EUR4 million in adjusted Ebitda monthly.
Earlier in March, all Snaitech branches in Italy were closed until April 3 following government action. While the Snaitech business continues to generate online revenue, the lack of sporting events has resulted in the company forecasting a loss of EUR3 million of adjusted Ebitda per month.
Prior to recent developments, Playtech forecast an average profit of over EUR13 million of adjusted Ebitda per month.
Playtech's Retail B2C Sport business is expected to post an adjusted Ebitda loss of EUR500,000 due to the closure of retail locations and the lack of sporting events.
The FTSE 250-listed company said revenue in Asia for March is expected to be EUR7 million, unchanged from February. TradeTech has generated adjusted Ebtida so far in 2020 of over EUR30 million.
Playtech said due to uncertainty caused by the outbreak and in an effort to maximise liquidity, it has suspended shareholder distributions until further notice and has postponed the EUR40 million share buyback programme, of which EUR10 million worth of repurchases have been completed.
The company said these measures, as well as the deferral a final dividend of EUR0.12, will result in savings of over EUR65 million.
As at the end of 2019, Playtech had EUR672 million of gross cash and EUR333 million when adjusted for client funds and progressive jackpots. It also has EUR250 million available under its revolving credit facility, with another EUR50 million cash expected in the second quarter of 2020 from the sale of surplus Snaitech land in Italy.
The stock was trading 6.1% lower at 132.75 pence each on Thursday morning in London.
By Ife Taiwo; [email protected]
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