Playtech Posts $112.4 Million Loss for 2020
Gambling software giant Playtech posted a €73 million ($112.4 million) loss in its latest financial figures. Shareholders reacted negatively to the news, which resulted in shares in Playtech falling almost 3%.
Much of Playtech’s revenue and profit stems from it providing software to betting shops. It has a huge presence in the United Kingdom where it provides back-office software for some major bookmakers. The British government ordered those betting shops to close in early 2020 and again later in the year. Betting shops remain closed in the UK until at least April 12.
Revenue fell 25% to €1,078.50m ($1,660.48m) which had a knock-on effect on the other measurements. Reported post-tax profit is the worse one of the lot, dropping 231% year-on-year to a €73.0m ($112.4m) loss.
|Adjusted post-tax profit||€27.3m||€137.4m||-80%|
|Reported post-tax profit||-€73.0m||€55.9m||-231%|
Playtech CEO: Company Delivered Robust Financial Performance
Mor Weizer, Playtech CEO, addressed investors via a statement where he called the company’s financial performance “robust.” What would Weizer call horrific if he calls a $112.4 million loss robust?
“The attitude and skill of our people and the strength and diversification of our technology-led business model has enabled us to deliver a robust financial performance in spite of the challenging backdrop.”
“The significant strategic and operational progress we achieved in 2020 has placed us in a strong position to capture the exciting market opportunities ahead.”
Playtech is the latest in a long line of gambling companies blaming COVID-19 restrictions for shortcomings.
“Certain parts of Playtech’s business, particularly those with a retail focus, were severely affected by the pandemic in 2020, and some continue to be impacted into 2021. As a result of the actions taken and the outstanding response from its people, Playtech demonstrated strong operational resilience during the period. In addition to delivering a robust performance, the Company made significant strategic and operational progress by adding new brands, expanding existing relationships and entering new markets.”
Weizer is not a popular figure in Playtech investor circles. Weizer is extremely well paid despite the flagging fortune of Playtech. He awards himself large annual wage increases and has received €19,528,000 ($30,057,115) over the past 10 years.
Investors have the chance to challenge Weizer at Playtech’s AGM on May 26.
Can The Company Recover From Such a Large Loss?
Playtech acquired dozens of companies over the past six years. It purchased Aristocrat Lotteries in 2014 and was linked with bids for bwin.party and Amaya. The business was booming and everyone was happy.
The company found itself on unsteady ground in mid-2017. Playtech founder Teddy Nagi continued selling his masses of shares. Nagi made more than US$1.35 billion from selling chunks of his substantial holding. Nobody is saying Nagi had a crystal ball, but he got top dollar for his shares when he sold them.
Playtech generates huge revenue but cannot translate that to profit. 2018 saw net profit fall 50% to €123.8 million. Matters grew worse in 2019 with a 90% drop in profits to €13.8 million. Now it reports €73 million losses.
There is no doubt Playtech has the tools to make masses of money. The latest financial show, however, it is reliant on sports and retail casinos. It bleeds money if it cannot draw money from these avenues.
We do not envy the mammoth-sized task of incoming Chairman Brian Mattingley. Mattingley takes up the post on June 1, 2021, after leaving 888 Holdings. He comes with a £338,000 ($606,983) annual salary, adding to Playtech’s massive outgoings.