Stars Group results look strong in Q2

Toronto-listed betting and gaming operator The Stars Group has reported a 55 per cent increase in total revenue to US$637.6m for the second quarter of 2019, benefiting from a record performance from its UK-facing Sky Betting & Gaming (SBG) business.

The gross profit coming in was reported at $881.5m against $640.5m during last year Q2. Operating income was also ahead at $155.5m, up from $115m year-on-year. Adjusted EBITDA, meanwhile, hit $432.1m against $343.3m.

The company revenue was boosted by growth from its UK operations, which comprises the Sky Betting & Gaming business, acquired in July 2018. Revenue totalled $252.9m, driven by $146.4m in betting revenue and $92.6m in gaming revenue.

The international segment, which is still dominated by TSG’s flagship poker brand PokerStars, was far less impressive. Total revenue was down 8.1 per cent to $322m, with poker falling 11.7 per cent to $191.5m.

The company blamed the international decline on “continued disruptions and regulatory headwinds” in certain markets, which points to payment-blocking in Russia and Norway. The Stars Group was also forced to withdraw from Switzerland and Slovakia.

“The second quarter underpinned the success of last year’s acquisitions, particularly with the record performance of Sky Betting & Gaming and our increasing product and geographic diversification, as we continue to transform and position the business to execute on our strategy for strong, sustainable future growth,” said CEO Rafi Ashkenazi.

Despite those encouraging Q2 numbers, the company has moved to lower its full-year guidance. Revenue projections have been cut from between $2.64bn and $2.77bn to a range of $2.5bn to $2.56bn. Adjusted EBITDA for 2019 is expected to reach between $905m and $930m versus the original $960m to $1.010bn estimate.

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