The Stars Group said that Q1 2020 trading is currently ‘ahead of expectations’, but the Toronto TSX-listed enterprise anticipates encountering near-term COVID-19 disruptions.
Updating investors today, Stars Group explained that it has maintained ‘strong underlying momentum’ within its UK (Sky Bet) and Australia (BetEasy) divisions, which gives it confidence that a sequential improvement in quarter earnings will be delivered.
“Overall, we are so far performing ahead of our expectations and currently expect to see strong year over year growth in revenues for the first quarter,” said Stars Group CEO Rafi Ashkenazi.
Despite Q1 confidence, in a forward statement Stars Group underlined that it is monitoring COVID-19 developments closely following the cancellation or postponement of major sporting events across the world, and how this will impact its wagering operations.
Ashkenazi and wider Stars Group governance admitted that, at present, the length of wagering disruptions remain ‘difficult to predict’.
“While we currently still offer a broad range of betting options for our customers, any sustained outbreak resulting in the further postponement or cancellation of major sporting events could have a material impact on our sports betting revenue in the near term,” Ashkenazi added.
Moving forward, Stars Group noted that the business is supported by strong underlying metrics in which the TSX enterprise generated 62% corporate revenues through online poker and igaming verticals during 2019.
Stars Group has become the second listed incumbent to issue a COVID-19 update this morning following the revised guidance published by FTSE100 Flutter Entertainment.
The Stars Group is currently pursuing an agreed £11 billion merger with Flutter, which is still being examined by the UK Competition and Markets Authority (CMA).
The merger would create a business entity with an estimated 40% share in the UK’s online betting market (Sky Bet, Betfair and Paddy Power) – a figure significantly above the CMA’s 25% market competition guidance.
Source: SBC News
