Publishing its interim H1 2019 trading update (period ending 30 June), the governance of Toronto TSX-listed The Stars Group Inc has moved to revise its full-year guidance citing a number of market headwinds.
Updating investors, the Stars Group has adjusted its 2019 revenue guidance to $2.5-2.58 billion mark (previous form $2.6-2.76 billion) as the TSX firm further reduces its EBITDA guidance to $905-930 million, having previously held a 2019 earnings target of $960-to-$1 billion.
The Stars Group governance details that its revised guidance reflects a number of realities facing market incumbents, with the firm’s H1 2019 trading impacted by negative exchange rate currency fluctuations, a ‘historical low betting win margin’ affecting its UK business division and slower than expected recoveries within certain disrupted markets.
The company reveals that trading to date has been impacted by circa $15 million in negative foreign exchange fluctuations impacting its 2019 adjusted EBITDA performance.
Further 2019 earnings factors include Stars Group governance setting aside $40 million funding for its US joint-venture FOX Bet, a proposition seeking to dominate the digital wagering services for the US market.
Despite its guidance revision, the Stars Group governance maintains that the company has progressed well in its enlargement and diversification strategy.
Absorbing the UK assets of Sky Betting & Gaming (Sky Bet), the Stars Group details H1 2019 consolidated revenues of $1.2 billion (H1 2018: $804m), helping the firm secure a period group adjusted EBITDA of $430 million (H1 2018: $343m).
Nevertheless, a breakdown of performance sees the Stars Group’s flagship PokerStars brand record period declines across the board with revenues down to $662 million (H1 2018: $732m) and EBITDA of $300 million (H1 2018: $350 million).
In its trading statement, the Stars Group governance discloses that Sky Betting and Gaming assets have contributed a period adjusted EBITDA of $142 million, against no comparative record.
Closing its H1 2019 accounts, the Stars Group governance declares operating profits of $155 million (H1 2018: $115m).
“2019 has been and remains a year of integration, execution and debt reduction,” details Stars Group Chief Executive Rafi Ashkenazi in the firm’s trading statement.
“We are committed to those key strategic priorities for the rest of the year while we also build our foundation and momentum to become a market leader in the U.S. We are confident that the actions we have taken over the last year, and are pursuing now, including to reassess our fixed cost base, put us in a strong position to deliver our mid-term growth targets from the end of 2019,” concluded Mr. Ashkenazi.
The Stars Group – H1 2019 Performance Overview
Source: SBC News
