REG - Playtech PLC - Final Results
27/03/2025 07:15
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250327:nRSa4681Ca&default-theme=true
RNS Number : 4681C Playtech PLC 27 March 2025
Playtech plc
("Playtech", the "Company" or the "Group")
Results for the year ended 31 December 2024
B2B hits medium-term target ahead of schedule; Snaitech disposal on track to
complete in Q2 25
Playtech (LSE: PTEC), the leading platform, content and services provider to
the gambling industry, today announces its final results for the year ended 31
December 2024.
Financial summary (continuing and discontinued operations)(1 )
( )
*Snaitech now classified as discontinued operations*
( )
Reported Adjusted(2)
FY 24 FY 23 FY 24 FY 23
€'m €'m Change % €'m €'m Change %
Revenue 1,791.5 1,706.7 5% 1,791.5 1,706.7 5%
EBITDA 358.8 406.5 -12% 480.4 432.3 11%
Post-tax profit(3) (23.9) 105.1 n/a 223.5 156.8 42%
Diluted EPS (7.8) 34.7 n/a 71.7 50.2 43%
Net debt(4) 142.8 282.8 -49%
( )
Financial summary (continuing operations)(1 )
( )
Reported Adjusted(2)
FY 24 FY 23 FY 24 FY 23
€'m €'m Change % €'m €'m Change %
Revenue 848.0 771.9 10% 848.0 771.9 10%
EBITDA 127.7 152.0 -16% 214.7 176.2 22%
Post-tax profit(3) (136.2) (12.1) n/a 58.8 14.2 314%
Diluted EPS (44.6) (3.9) n/a 18.8 4.6 309%
( )
Summary
· Excellent Group performance (continuing and discontinued operations)
with FY 2024 Adjusted EBITDA up 11% to €480.4 million (FY 2023: €432.3
million), slightly ahead of previously raised expectations.
· Performance driven by strong momentum in B2B and good operating
leverage:
- Adjusted EBITDA in the B2B business grew 22% to €222.0 million (FY
2023: €182.0 million), reaching the medium-term target range of €200
million - €250 million set two years ago, ahead of schedule.
- Broad-based strength across core markets; material improvement in
cash flow generation.
· Sale of Snaitech on track to complete in Q2 2025; intention to return
€1,700 million - €1,800 million to shareholders by way of a special
dividend.
· Revised agreement with Caliplay underpins Playtech's future growth as a
predominantly, pure-play B2B business; completion of the revised arrangements
scheduled to take place on 31 March 2025.
· New medium-term financial targets for the continuing business,
reflecting structure of the new Caliplay agreement:
- Adjusted EBITDA(5) target range of €250 million - €300 million
- Free Cash Flow(6) target range of €70 million - €100 million
Divisional highlights
B2B
· FY 2024 revenue growth of 10% to €754.3 million (FY 2023: €684.1
million), with broad-based strength across the Group's core markets.
· B2B Adjusted EBITDA grew 22% to €222.0 million (FY 2023: €182.0
million), with Adjusted EBITDA margin expansion of 280 bps, driven by strong
operating leverage and tight cost control.
· The Americas was the biggest driver of growth, with revenue up 19% to
€251.6 million (FY 2023: €211.9 million).
· Excellent progress executing our strategy in the US and Canada;
strong revenue growth of 126% in FY 2024, reaching €29.8 million (FY 2023:
€13.2 million).
· Hard Rock Digital: launched Casino and Live content in New Jersey;
dividends of €3.2 million received in FY 2024; Fair Value of our equity
investment increased to €141 million (FY 2023: €77 million).
· In Latin America, strong performance from Wplay in Colombia; strong
underlying performance from Caliplay, although additional B2B service fee
(based on a percentage of Caliplay's predefined profit) was impacted by legal
fees from the dispute, adverse FX, and interest charged on money owed to
Playtech. Brazil grew very strongly in FY 2024 and will be classified as a
regulated market from 1 January 2025.
· Live revenue saw strong growth of 24% in regulated markets versus
FY 2023.
· Achieved the top end of the medium-term SaaS revenue target range
ahead of schedule, with SaaS revenues growing 59% to €80.0 million (FY 2023:
€50.3 million).
· Launched BetBuddy, Playtech's AI-led safer gambling tool, with seven
new brands in FY 2024, bringing the total to 23 brands in 14 jurisdictions.
B2C
· Solid B2C performance with revenue up 2% to €1,052.7 million (FY
2023: €1,037.0 million). Adjusted EBITDA increased 3% to €258.4 million
(FY 2023: €250.3 million).
Snaitech (discontinued operations)
o Snaitech revenue increased 1% to €956.1 million (FY 2023: €946.6
million), with performance impacted by customer-friendly sporting results over
the course of the year, and particularly acute at the start of 2024.
- Retail revenue was broadly flat at €697.6 million (FY 2023:
€694.8 million)
- Online revenue grew 3% to €258.5 million (FY 2023: €251.8
million)
Continuing B2C
o HAPPYBET reported Adjusted EBITDA loss of €11.8 million (FY 2023: loss
of €11.8 million). Austria business closed in H2 2024; the Group commenced a
sales process for the rest of the business in Germany.
o Sun Bingo and Other B2C saw revenue increase 7% to €78.9 million (FY
2023: €73.4 million). Adjusted EBITDA declined to €4.5 million (FY 2023:
€6.0 million), due to the impact of affordability checks implemented in H2
2024.
Corporate activity
· Agreement reached on revised strategic agreement with Caliplay,
providing clarity on the future relationship and a strong platform to build on
the significant growth delivered over the past ten years.
· Definitive agreement reached in September 2024 for the sale of
Snaitech to Flutter:
o Cash consideration of approximately €2,300 million calculated by
reference to a debt and cash-free valuation basis and assuming a normalised
level of working capital.
o Playtech intends to return €1,700 million - €1,800 million to
shareholders by way of a special dividend.
o Italian antitrust approval process continuing as planned and sale on track
to complete in Q2 2025.
Financial highlights
· Reported post-tax loss (continuing and discontinued operations) of
€24.2 million (FY 2023 post-tax profit: €105.1 million), with the movement
due to higher impairment charges for sports in FY 2024 compared to FY 2023, a
smaller increase in the fair value of derivative financial assets in FY 2024
versus FY 2023 and the derecognition of brought forward deferred tax asset.
· Reported post-tax loss from continuing operations of €136.5
million (FY 2023 post-tax loss €12.1 million) due to the same factors listed
above.
· Group leverage declined to 0.3x (continuing and discontinued
operations) in FY 2024 compared to 0.7x in FY 2023.
· Agreed a new amended €225 million 5-year RCF facility, which will
amend and replace the existing €277 million RCF facility and becomes
effective on completion of the Snaitech sale.
· New €225 million 5-year RCF signed in March 2025; to come into
effect on completion of Snaitech sale.
· Given the strength of the balance sheet, Playtech repaid €200
million of the €350 million bond due March 2026; remaining balance to be
repaid following completion of the sale of Snaitech.
Outlook
· Good start to trading in 2025, reflecting strong underlying growth
trends in B2B.
· New medium-term Adjusted EBITDA(5) target for continuing operations
of €250 million - €300 million, reflecting the revised terms of the
Caliplay agreement.
· New medium-term Free Cash Flow(6) target for continuing operations
of €70 million to €100 million.
· Increased focus on operational efficiencies within the continuing
Group, while also conducting a review of underperforming businesses.
· Strength of balance sheet post the expected completion of the
Snaitech deal gives flexibility to pursue both organic and inorganic growth
opportunities, as well as potential shareholder returns.
· The Board remains confident in Playtech's ability to execute on
growth opportunities for the continuing B2B business.
Mor Weizer, CEO, said:
"2024 was a landmark year for Playtech. We successfully reached an agreement
to sell Snaitech to Flutter Entertainment, delivering significant value to our
shareholders while enabling Playtech to refocus predominantly on its core
strengths as a pure-play B2B business. Additionally, we are pleased to have
secured a revised strategic agreement with Caliplay, our partner in Mexico,
providing greater certainty and a strong foundation for future growth.
"Our core B2B business had an outstanding year, achieving the medium-term
target we set two years ago ahead of schedule. The Americas saw substantial
revenue growth, with Wplay in Colombia delivering a particularly strong
performance. Meanwhile, our expansion in the US and Canada continues to gain
momentum as we sign up and launch with a growing list of operators.
"The combination of Playtech's industry-leading technology with its exposure
to attractive markets underpins our confidence in the Group's new medium-term
targets. We are excited about the future and the many opportunities ahead."
For further information contact:
Playtech plc +44 (0) 20 3805 4822
Mor Weizer, Chief Executive Officer
Chris McGinnis, Chief Financial Officer
c/o Headland
Sandeep Gandhi, Head of Investor Relations +44 (0) 20 3805 4822
Headland (PR adviser to Playtech) +44 (0) 20 3805 4822
Lucy Legh, Jack Gault
(1)Totals in tables throughout this statement may not exactly equal the
components of the total due to rounding.
(2)Adjusted numbers relate to certain non-cash and one-off items. The Board of
Directors believes that the adjusted results more closely represent the
consistent trading performance of the business. A full reconciliation between
the actual and adjusted results is provided in Note 10.
(3)Adjusted Profit refers to post-tax Profit attributable to the owners of the
Company after the relevant adjustments as detailed above. Reported Profit
refers to post-tax Profit attributable to the owners of the Company before
adjustments.
(4)Net debt is defined as being gross debt less cash and cash equivalents
excluding cash held on behalf of clients, progressive jackpots and security
deposits.
(5)New medium-term Adjusted EBITDA target includes income from associate.
(6) Free Cash Flow defined to be Adjusted EBITDA less IFRS 16 lease costs,
capex and capitalised development costs, net financing costs and cash taxes
paid and taking into account any differences between dividends received and
amounts recognised on P&L.
Conference call and presentation
A presentation on the earnings will be held today in person at 9.00am at One
Moorgate Place, Chartered Accountants Hall, 1 Moorgate Place, London, EC2R
6EA, and accessible via a live audio webcast using this link:
https://www.investis-live.com/playtech/67cf0cf0480ab4000f4d429b/nerat
(https://www.investis-live.com/playtech/67cf0cf0480ab4000f4d429b/nerat)
Analysts and investors can also dial into the call using the following
details:
United Kingdom (Local): +44 20 3936 2999
United Kingdom (Toll-Free): +44 800 358 1035
Global Dial-In Numbers
(https://www.netroadshow.com/events/global-numbers?confId=79454)
Access Code: 318336
The presentation slides will be available today from 8.30 am at:
https://www.investors.playtech.com/results-and-presentations
(https://www.investors.playtech.com/results-and-presentations)
Forward looking statements
This announcement includes statements that are, or may be deemed to be,
"forward-looking statements". By their nature, forward-looking statements
involve risk and uncertainty since they relate to future events and
circumstances. Actual results may, and often do, differ materially from any
forward-looking statements.
Any forward-looking statements in this announcement reflect Playtech's view
with respect to future events as at the date of this announcement. Save as
required by law or by the Listing Rules of the UK Listing Authority, Playtech
undertakes no obligation to publicly revise any forward-looking statements in
this announcement following any change in its expectations or to reflect
events or circumstances after the date of this announcement.
About Playtech
Founded in 1999 and premium listed on the Main Market of the London Stock
Exchange, Playtech is a technology leader in the gambling industry with over
8300 employees across 19 countries.
Playtech is the gambling industry's leading technology company delivering
business intelligence driven gambling software, services, content and platform
technology across the industry's most popular product verticals, including,
casino, live casino, sports betting, virtual sports, bingo and poker. It is
the pioneer of omni-channel gambling technology through its integrated
platform technology, Playtech ONE. Playtech ONE delivers data driven marketing
expertise, single wallet functionality, CRM and responsible gambling solutions
across one single platform across product verticals and across retail and
online.
Playtech partners with and invests in the leading brands in regulated and
newly regulated markets to deliver its data driven gambling technology across
the retail and online value chain. Playtech provides its technology on a B2B
basis to the industry's leading retail and online operators, land-based casino
groups and government sponsored entities such as lotteries.
Chairman's statement
Our thanks to the team
I would like to start by saying thank you to all our people, whose commitment,
hard work and dedication have been central to helping us deliver another
excellent year of progress across Playtech. They have worked tirelessly to
support all our customers and grow our business, proving again that they are
amongst the best in the industry. I would also like to take this opportunity
to acknowledge the outstanding contribution from the executive management team
and the Non-executive Directors, who have again demonstrated their drive and
focus in what has been a remarkable year for the business.
2024 in review
Our core B2B business delivered an excellent performance, reaching our
medium-term Adjusted EBITDA target range ahead of schedule. We were also
delighted to reach an agreement on a revised strategic agreement with
Caliplay. Meanwhile, the expected sale of Snaitech to Flutter Entertainment
for €2.3 billion is a transformational deal that will deliver significant
returns for shareholders while also strategically repositioning Playtech as a
leading global gaming business operating in high-growth B2B gambling markets.
B2B
Our B2B performance was underpinned by the breadth and depth of our product
offering in some of the most attractive online gambling markets:
- We continue to make good progress with our strategy in the
fast-growing US market. 2024 saw a shift in focus from signing deals with
multiple operators towards execution and delivery, including launching with
DraftKings across multiple states.
- We were pleased to see another year of strong performance across
Latin America in 2024. While Caliplay further solidified its leadership
position in Mexico, Wplay in Colombia continues to benefit from its strong
position in the market and the transition to online. Looking to 2025, the
Brazil market presents a big opportunity as it regulated on 1 January 2025,
and we are strongly positioned to take advantage of this fast-growing
market.
- Our Live Casino offering continues to go from strength to strength.
Our new partnership with MGM Resorts International, which sees games streamed
directly from the floors of the Bellagio and MGM Grand, underlines Playtech's
reputation as the partner of choice for ambitious operators looking for new
and innovative ways to reach customers.
B2C
I will touch on the sale of Snaitech to Flutter Entertainment in more detail
later on but first a quick word on the performance of the business in 2024.
- Snaitech saw marginal revenue growth in the year due to the impact of
a string of customer-friendly sporting results, which was particularly acute
at the start of 2024.
- Underlying growth remained strong across the retail sports betting
and online segments, and Snaitech is well-placed to continue to execute in the
Italian market in the future.
Corporate activity
Delivering exceptional value for shareholders with the sale of Snaitech
As announced in September 2024, Playtech agreed the sale of Snaitech to
Flutter Entertainment for €2.3 billion. The deal represents a significant
return on our investment in Snaitech, which was acquired in 2018 for €846
million, and is recognition of all the work that has gone in to growing
Snaitech into a high-quality business with a leading position in the Italian
sports betting and gaming market.
We are also indebted to the hard work of Fabio Schiavolin, Chief Executive of
Snaitech, and his team over the past seven years. They successfully navigated
the pandemic and emerged stronger with an established retail presence and a
leading online business. We have no doubt that Snaitech will continue to excel
under Flutter's ownership, and we wish them the very best.
While Snaitech has been an important part of Playtech's growth in recent
years, the Board agreed that the transaction with Flutter represented a
compelling opportunity to maximise value for shareholders. Following
completion of the disposal, the Company intends to return between €1.7
billion - €1.8 billion to shareholders by way of a special dividend.
At the same time, shareholders will have the opportunity to benefit from
significant further upside from continued ownership in a predominantly
pure-play B2B business operating in attractive markets with strong growth
prospects. This strategic shift is already underway and the Company is excited
about the opportunity and growth prospects in 2025 and beyond.
In December 2024, shareholders approved significant new remuneration and
incentive schemes. We appreciate that some shareholders had concerns, but
the significant majority of our shareholders recognised the importance of this
as a foundation for the ongoing growth and development of the Group as a B2B
business. We are grateful to all our shareholders for their support and
feedback in respect of these schemes.
Striking a revised strategic agreement with Caliplay
We also announced in September 2024 that we had reached an agreement on a
revised strategic agreement with Caliplay, our partner in Mexico. We're
pleased to have drawn a line under the disagreement that preceded this revised
set of arrangements, providing greater certainty for both sides.
We are now firmly focused on building on our successful partnership, which,
over the past ten years, has created an extremely successful and rapidly
growing digital business in Mexico. The revised agreement, scheduled to
complete on 31 March 2025, provides a strong platform to build on the
impressive progress to date and drive significant further growth in the
future.
Board changes
Our evolution as a Company has been accompanied by a transition in the make-up
of our Board. In July 2024, we welcomed Doreen Tan to the Board as a new
independent Non-executive Director, bringing more than 30 years' experience of
working at leading financial institutions.
Anna Massion stepped down as an independent Non-executive Director and Chair
of the Remuneration Committee on 28 February 2025. I would like to take this
opportunity to thank Anna for the valuable contribution she has made to the
Company's strategy, over what has been a period of significant transformation
for the business.
In addition, as announced in January 2025, I am also preparing to step down
from my position as Non-executive Chair, having joined the Board in 2021.
During this time, we have built a highly experienced and diverse Board, which
will continue to play a critical role in promoting the long-term success of
the business.
It has been an absolute privilege to serve as Chair of Playtech and to help
steward the Group through an important phase of growth and transition. I am
proud of the milestones we have achieved as Playtech prepares to embark on a
new chapter as a predominantly pure-play B2B business. It is with that in mind
that I feel now is the right time to step aside and allow a successor to lead
Playtech through the next phase of its growth.
The process to appoint a new Chair is well-advanced and we look forward to
sharing the details of their appointment in due course, while we will also
review the composition of the Board in light of recent changes.
We have also made changes to the composition of the Board committees to ensure
that we are making the most of the Board's experience and skillset.
Sustainability
Looking back on my tenure over these past few years, I am particularly proud
of the progress we have made against our sustainability strategy. Playtech has
always been known as a pioneer of gambling technology, and we are now using
that same expertise to advance safer gambling and player protection. The
Company's commitment to working alongside licensees on this journey is
increasingly cited as a key reason that customers choose Playtech as their
technology partner.
BetBuddy - our AI-enabled safer gambling tool - is a great example of how we
are taking the latest advances in technology to develop personalised
responsible gambling tools. In 2024, we launched BetBuddy with seven new
brands, bringing the total to 23 brands in 14 jurisdictions. We remain
committed to further enhancing our offering and ultimately ensuring a
sustainable future for the industry.
A confident outlook
If 2024 was the year that Playtech laid out a plan to redefine itself as a
predominantly pure-play B2B business, this year will see that transition take
effect. The sale of Snaitech is on track to complete by Q2 2025 and plenty of
work is taking place behind the scenes to ensure the go-forward business gets
off to the strongest possible start, alongside our expectation of paying a
special dividend of between €1.7 billion to €1.8 billion to our
shareholders from the proceeds of Snaitech's disposal. Playtech is a
remarkable business with a blend of brilliant people and industry-leading
technology. I have no doubt that the management will continue to deliver
strong returns for all of the Company's stakeholders, and I wish you all the
very best.
Thank you for your continued support of Playtech.
Chief Executive Officer's Review
Overview
2024 marked Playtech's 25(th) anniversary, and was a year of transformational
change for the business. The expected sale of Snaitech to Flutter
Entertainment will deliver significant returns for shareholders, while the
revised agreement with Caliplay will underpin Playtech's future growth as a
predominantly pure-play B2B business. The Group also delivered an excellent
financial performance, with Adjusted EBITDA (including Snaitech) slightly
ahead of previously raised expectations.
A strong performance across the Group's high-growth markets meant that the B2B
segment delivered revenue growth of 10% (+11% on a constant currency basis) to
€754 million (FY 2023: €684 million). Strong operating leverage and tight
cost control ensured B2B's Adjusted EBITDA margin expanded 280 bps, helping to
deliver a 22% increase in B2B Adjusted EBITDA to €222 million (FY 2023:
€182 million), meeting our medium-term Adjusted EBITDA target of €200
million - €250 million, ahead of schedule.
Since we entered the US in 2019, we have signed and launched partnerships with
all of the major operators and are making good progress on our strategy, with
US and Canada revenues growing 126% in 2024 to €29.8 million. Growth was
broad-based across Casino, Live and PAM+, with the launch of multiple
dedicated tables in Michigan, New Jersey and Pennsylvania with DraftKings a
particular highlight. Our landmark strategic agreement with Hard Rock Digital
continued to develop, and delivered €3.1 million in dividends in 2024, while
in June, we also signed a new agreement with MGM Resorts to provide Live
Casino content directly from the floor of two of its resorts in Las Vegas to
players outside the US.
Revenue in Latin America also grew strongly in 2024, driven primarily by a
very strong performance from Wplay in Colombia. The revised strategic
agreement with Caliplay, due to complete on 31 March 2025, also marks a
significant milestone that will allow us to build on our progress and drive
significant further growth in the future.
At the FY 2022 results, we announced a medium-term SaaS revenue target of
€60 million - €80 million. Just two years later, we are delighted to
report that after another year of excellent revenue growth (+59% in FY 2024),
we have hit the top end of the target range and delivered €80.0 million of
revenue in FY 2024 (FY 2023: €50.3 million), with growth coming from a
diverse spread of brands and geographies.
Revenue from Playtech's B2C business was up 2% to €1,052.7 million (FY 2023:
€1,037.0 million) and Adjusted EBITDA increased 3% to €258.4 million (FY
2023: €250.3 million) due to the impact of customer-friendly sports results
on Snaitech over the course of the year, and particularly acute at the start
of 2024. The Austrian HAPPYBET business was closed in H2 2024. The Group
commenced a sales process for the rest of the business in Germany, and failing
that, we'll look at a closure.
As announced in September 2024, Playtech agreed the sale of Snaitech to
Flutter for a total enterprise value of €2,300 million. This reflects the
fundamental business transformation achieved since acquiring Snaitech in 2018
and creates significant value for shareholders, with €1,700 million to
€1,800 million expected to be paid out as a special dividend.
I would like to take this opportunity to personally thank our incredible team
members around the world, who have contributed to our success over the past 25
years. Your passion, dedication and hard work have been key to our ability to
stay ahead of the competition, and the true driving force of our success.
B2B
Core B2B
Regulated markets
Playtech's B2B business is one of the leading platform, content and services
providers in regulated and soon-to-be-regulated markets. The majority of these
are high-growth markets such as the US, Latin America and certain European
countries.
Revenue from regulated markets grew by 10% (10% on a constant currency basis)
in 2024, primarily driven by a very strong performance in the US and Colombia.
There was also good growth from other regulated markets such as Canada, Italy,
Spain and UK.
The Americas
The Americas saw rapid growth once again, with 2024 revenue up 19% (22% on a
constant currency basis) compared to 2023. This was largely driven by a strong
performance in the US with multiple operators contributing, and Wplay in
Colombia.
US
Our journey in the US began in 2019, and over the past five years, we have
successfully built a strong presence and laid the foundation for significant
growth. We have signed and launched partnerships with nearly all of the major
operators and are making good progress in the execution and delivery phases,
aiming to capitalise on the substantial opportunities presented by the US
market.
In 2024, we secured a number of key agreements with operators across multiple
states. We launched with DraftKings and their Golden Nugget brand for Casino
and launched multiple dedicated Live tables in each of the three biggest
iGaming states, Michigan, New Jersey and Pennsylvania. We have also now
launched with FanDuel for Casino and Live across Michigan, New Jersey and
Pennsylvania. Rush Street ("BetRivers" brand) launched with Live Casino in
Michigan, New Jersey and Pennsylvania. Bet365 launched with both Casino and
Live Casino in Pennsylvania, while we also launched Casino and Live with Penn
Entertainment in Michigan, Pennsylvania and New Jersey.
Two new operators now use our PAM+ platform in the US, in addition to Parx.
Delaware North launched our sports offering and PAM+ in Ohio and Tennessee
with their Betly brand in 2024, with Betly online sports betting launched in
Arkansas in January 2025 and West Virginia set to launch shortly. As the first
licensee in the US using both our mobile sports product and having a dedicated
Playtech managed services team, we are excited to see this relationship
develop going forward. Ocean Casino Resort migrated its online casino platform
in New Jersey onto Playtech, going live with PAM+, Live and Casino. Platform
deals are especially attractive given the value that accrues to Playtech when
operators use both our PAM+ platform and content. Ocean Casino Resort and
Delaware North are also the first US operators to go live with our BetBuddy
product, Playtech's AI-enabled safer gambling technology.
2024 marks the second year since we signed our landmark strategic agreement
with Hard Rock Digital (HRD), the exclusive interactive gaming and sports
betting partner for Hard Rock International and Seminole Gaming, where we
provide Casino and Live content in North America. Through this partnership, in
2024, we delivered a range of games across slots, table games and live dealer
through HRD's proprietary Hard Rock Bet platform in New Jersey, which is
contributing to our revenue growth in the US.
Throughout the year, we continued to launch innovative content across the US,
as we saw our content resonate with US audiences. Eight branded games were
launched in 2024 with a US-audience focus, including household titles such as
Breaking Bad and The Walking Dead. Additionally, we received recognition from
Eilers & Krejcik in their 7th Annual EKG Slot Awards, nominated in the Top
Performing Online Live Casino Game for our highly regarded titles, Adventures
Beyond Wonderland and Mega Fire Blaze Roulette, as well as for Top Performing
New Online Slots Game with Breaking Bad: Collect 'Em.
Strong demand in the US is driving investments within our Live offering. In
2024, we expanded the capacity of our three Live studios located in Michigan,
New Jersey, and Pennsylvania, while our total headcount in the US reached
close to 500 people by year-end. Playtech now holds licences in 14 US states,
including recent licence approvals in Arkansas and Tennessee.
Since the repeal of PASPA in 2018, the regulatory landscape for sports betting
in the US has remained favourable. Over 30 states have approved legislation to
legalise sports betting, and many of these markets have already launched in
both online and retail channels. In 2024, Missouri became the latest state to
approve sports betting, with several others expected to launch soon. The
progress of iGaming, which is not governed by PASPA, relies on decisions made
by individual states. Regulation in this segment has been slow, with only
eight states currently allowing iGaming and no additional states in 2024.
However, we are extending our casino and live casino partnerships into West
Virginia and other iGaming regulated states, to maximise our footprint.
Canada
In Canada, following the successful introduction of online gambling
legislation in Ontario, the province of Alberta is on the verge of regulation,
while British Columbia is expected to follow suit soon. This ongoing evolution
of the regulatory landscape in Canada presents significant growth
opportunities for Playtech given our structured agreement with NorthStar as
well as several other B2B licensees. In 2024, NorthStar continued to execute
its growth strategy, demonstrating strong revenue growth. In January 2025,
NorthStar also announced that it had secured additional financing to
accelerate its growth initiatives and expand its presence across Canada. In
addition to NorthStar, Playtech has further exposure to the Canadian market
through more than 20 operators, including FanDuel, Entain, and BetMGM, and
launched Casino and Live with Penn Entertainment and Casino with Rush Street,
both in Ontario.
Latin America
Latin America is an exciting market for Playtech, and remains a key driver of
growth for Playtech. Revenue grew 12% in 2024 versus 2023, driven primarily by
a very strong performance in Colombia due to Wplay. On an underlying basis,
Caliplay continues to perform strongly. However, the additional B2B services
fee (based on a percentage of Caliplay's predefined profit) in 2024 was
impacted by one-off items in the second half of the year including legal fees
from the dispute, interest charge on money owed to Playtech, customer-friendly
sporting results, and an adverse FX impact.
The launch of Brazil's national licensing regime on 1 January 2025 represents
a fundamental step in confirming Latin America's emergence as a largely
regulated region for online gambling. Brazil is anticipated to be a
significant, high-growth market given its large population and love of sports,
and Playtech is well positioned to benefit given its exciting strategic
agreement with Galerabet and exposure via its other B2B partners in the
country such as Betano and Bet365.
Peru's regulations came into effect in the second half of 2024, with over 100
licences issued. Playtech is well positioned to benefit from the opportunity
with several licensees launched including Rush Street for Live and Casino, and
Betsson for Casino, Live and Poker.
Europe ex-UK
In Europe ex-UK, B2B revenue saw a slight decline of 1% (-1% at constant
currency), with strong growth in Spain and Italy. This was offset by declines
in Greece, due to a contract loss, Poland, due to an EBITDA-neutral change in
commercial terms with an operator and the Netherlands due to tighter
regulation.
We continue to see strong uptake for multiple products across some of our key
markets:
· In Italy, we launched Casino and Live Casino with Betway, Betsson and
NetBet, and GamesDivision for Poker.
· In Spain, we launched Casino and Live Casino with GoldenPark and
Aupabet. We also launched Live Casino with Wanabet.
· In the Netherlands, we launched with LeoVegas for both Casino and
Live Casino.
We continue to expand our relationships into new markets with existing
customers as we launched with Betano in Denmark for Casino and Live, and with
Entain for Poker in Latvia.
This broad set of agreements demonstrates the attractiveness of Playtech's
range of products, the versatility and scalability of our business model and
our ability to grow customer relationships over time.
Investment in studio infrastructure continues to remain a priority for the
Live segment, including within Europe, where additional tables have been added
in our facilities in Latvia, Romania and the UK, as demand for our content
continues to increase, while we have also opened additional studios in Czech
Republic and Slovakia.
France saw regulatory developments in 2024, with the government tabling a
proposal to Parliament to regulate online casino. At present, only poker,
sports betting and horse race betting are regulated within the online sector,
so the regulation of online casino would be a positive for Playtech,
particularly as we have multiple customers already taking our poker product.
UK
UK revenue in 2024 was up 8% (+5% growth on a constant currency basis)
compared to 2023, with good growth across multiple operators, partly offset by
a decline in revenue due to the impact of a customer insourcing their
self-service betting terminals.
The UK remains an important market for Playtech and its customers, as well as
being one of the largest and most mature regulated markets in the world, and
we continue to launch new products with operators. For example, we launched
Live with both Rank and Jumpman, Casino and Live with Kwiff, and Casino with
Dazzletag all in 2024.
Unregulated
The Group's strategy to focus on both regulated and regulating markets
includes unregulated markets which are likely to regulate in the future.
Revenue from these unregulated markets was up 12% (+15% on a constant currency
basis) versus 2023, with growth in Brazil and Canada, offsetting declines in
Asia, although the latter saw stabilisation in the second half of the year,
following the termination of our two existing distributor arrangements and
subsequent agreement with a new distributor in the region.
The Company is excited about the potential of the South African market, which
has begun to regulate. It is a nascent but fast-growing market, which permits
sports betting and live casino. Playtech has increased its exposure there,
launching with both Betway and another Betway brand, Jackpotcity, for both
Casino and Live Casino in 2024.
B2B - driving growth through innovation
SaaS
As part of efforts to diversify its revenue streams, Playtech launched the
SaaS business model in 2019, which targets the long tail of providers that
lack access to PAM+. The SaaS model provides a low friction method of exposing
operators to Playtech's content, allowing us to cross-sell and upsell
additional Playtech products over time. Meanwhile, a broad range of customers
from multiple countries across different product sets helps us to diversify
our revenue base, ensuring resiliency of our B2B revenues to changes in the
operating environment.
At the FY 2022 results, we announced a medium-term SaaS revenue target of
€60 million - €80 million. Just two years later, we are delighted to
report that after another year of excellent revenue growth (+59% in FY 2024),
we have hit the top end of the target range and delivered €80.0 million of
revenue in FY 2024 (FY 2023: €50.3 million), with growth coming from a broad
range of brands and countries.
Product developments
The online gaming landscape is changing rapidly, and Playtech stands at the
forefront of this exciting industry. With our technology, diverse content
offerings, and industry-leading position, we are well-placed to cater to the
increasing demand for unique, captivating, and immersive entertainment
experiences for consumers.
In June 2024, we announced a partnership with MGM Resorts International to
pioneer streaming of Live casino content from the iconic Las Vegas properties,
Bellagio and MGM Grand. This innovative content is currently available to
players outside of the US. As the partnership evolves, the plan is to broaden
the portfolio, to include access to several proprietary Playtech games as well
as exclusive branded TV game shows, celebrity-hosted trivia shows, and
immersive entertainment experiences.
Throughout the year, the Casino vertical launched a number of highly popular
slot games. Our award-winning Cash Collect™ suite expanded to include two
innovative animal-themed games: 'Lucky Bass: Mega Cash Collect' and 'Wolves!
Cash Collect & Link', while our ever-popular Fire Blaze™ suite added new
fan-favourite game 'Dwarves and Goblins Mega Fire Blaze'.
The successful collaboration between Quickspin Studio and Playtech's Live
vertical continued in 2024 with the launch of Sticky Bandits Roulette Live and
Busted or Bailed Live crash game, both of which received positive feedback
from customers and operators. In addition, Playtech Live designed and launched
several bespoke game shows tailored for our largest customers, including
Paddy's Mansion Heist for Paddy Power, The Chase for Entain, and Pig Champions
for Betano. Furthermore, we continued to invest in the latest streaming
technology and implemented high-efficiency streaming protocol (HESP) across
our Live Studios to ensure ultra-low latency globally on all devices.
B2C
Snaitech has been classified as discontinued operations
Playtech's B2C business spans Snaitech (pending disposal to Flutter
Entertainment), HAPPYBET, Sun Bingo and Other B2C operations. Overall, B2C
revenues grew 2% to €1,052.7 million (FY 2023: €1,037.0 million). Adjusted
EBITDA grew 3%, rising to €258.4 million (FY 2023: €250.3 million).
Snaitech (discontinued operations)
Revenue from Snaitech in Italy increased slightly by 1% in FY 2024 compared to
FY 2023, while Adjusted EBITDA grew by 4% year over year. The overall
performance reflected the negative impact of customer-friendly sporting
results over the course of the year and particularly acute at the start of
2024.
The retail segment experienced flat revenue, while Adjusted EBITDA rose by 5%
compared to FY 2023. In contrast, the online business saw a revenue increase
of 3% and a 3% rise in Adjusted EBITDA during the same period.
Retail betting sales were up 6% versus FY 2023, as healthy underlying volumes
in the year were partly offset by the negative effects of customer-friendly
results. Gaming Machines revenue was down 2% versus FY 2023, with growth in
VLT revenue more than offset by a decline in AWP revenue. At the Adjusted
EBITDA level, retail margins increased by 90bps versus FY 2023, due to the
impact of operational efficiency activities.
The online segment saw 3% revenue growth, with strong casino performance
offset by unfavourable sports betting results early in the year. The
under-penetration of the online segment continues to be a powerful structural
tailwind for the business, with Snaitech well-placed to benefit given the
strength of the Snai brand, the continuous improvements to apps and technology
and a broadening of its content offering. Adjusted EBITDA margins remained
high at 50.5% in FY 2024 versus 50.5% in FY 2023, despite the negative impact
of customer-friendly sporting results.
HAPPYBET
HAPPYBET revenues were up 4% in FY 2024 compared to FY 2023, driven by the
retail segment in Germany due to favourable sporting results, partly offset by
the impact from the closure of the Austrian business in H2 2024, as this
business lacked the scale to be a viable entity. Adjusted EBITDA losses
remained flat at €11.8 million in FY 2024 (FY 2023 losses of: €11.8
million).
Given Playtech's shift back towards a pure-play B2B business, the impending
loss of the Snaitech management team who oversaw HAPPYBET's operations, a
focus on cash generation, and the continued difficult regulatory environment
in Germany, the Group commenced a sales process for the rest of the business
in Germany, and failing that, we'll look at a closure.
Sun Bingo and Other B2C
Sun Bingo and Other B2C saw 7% revenue growth in FY 2024 to reach €78.9
million (2023: €73.4 million) while Adjusted EBITDA declined to €4.5
million, from €6.0 million in FY 2023 due to increased marketing spend in H1
2024 and tighter regulation with affordability checks coming into effect in H2
2024.
Responsible Business and Sustainability
Our sustainability commitments continue to be instrumental, as we pursue our
vision to be the trusted technology partner of choice, grow our business,
attract the best talent and deliver long term value for all of our
stakeholders. This year, we achieved some important milestones in our journey,
across multiple facets of our sustainability strategy.
· I am particularly proud that our progress has been recognised by
several independent external organisations this year, including being:
o Selected as one of seven companies from the Casinos & Gaming
industry for the S&P Global Sustainability Yearbook 2025.
o Listed as one of the World's Best Companies in Sustainable Growth for
2025 by TIME; positioning Playtech at 245 out of 500 companies.
o Our commitment and progress on gender diversity in executive and senior
leadership ranks has been recognised in the FTSE Female Leaders Review and
recognition in our sector with the Women in Gaming Award.
· As we look to accelerate our growth in the Americas and other
soon-to-be-regulated markets, safer and sustainable gambling continues to be
both a concern and an opportunity for our sector. With that backdrop, I am
pleased with our progress to enhance the quality and extend the reach of our
safer gambling technology offering. Highlights include:
o By the end of 2024, we have deployed BetBuddy with 23 brands in 14
jurisdictions, including in several states in the US and Brazil.
o BetBuddy was recognised as the Responsible Gambling Service / Solution
of the Year at the 2024 VIXIO Gambling Compliance Awards.
o Expanded our partnerships in the Americas with a new collaboration with
UNLV and extended partnerships with ICRG and Kindbridge.
· The Company also committed to reach net-zero by 2040, with
the targets validated by the Science Based Targets initiative in February
2024.
· Our commitment to taking care of each other in incredibly
tough times is another area element of our culture that I am incredibly proud
of. And, this year, we continued to support our colleagues through our
Benevolent fund, which aims to support colleagues who are living through
difficult, personal situations. This year, we extended support for 36
individuals and immediate families.
Chief Financial Officer's review
Overview
Group performance
Snaitech has been classified as discontinued operations
Overall, Playtech delivered a strong financial performance in 2024, with
Adjusted EBITDA(1) (continuing and discontinued operations) of €480.4
million (2023: €432.3 million), growing 11% compared to 2023. Total reported
revenue from continuing and discontinued operations was €1,791.5 million
(2023: €1,706.7 million), representing a 5% increase compared to 2023.
The performance was driven by the B2B division with strong growth in its core
regulated markets, led by the Americas, with revenues increasing by 10% from
€684.1 million in 2023 to €754.3 million in 2024. Adjusted EBITDA
increased by 22% from €182.0 million in 2023 to €222.0 million in 2024
driven by strong operating leverage and tight cost control.
Within B2C, revenue was up 2% to €1,052.7 million (2023: €1,037.0 million)
and Adjusted EBITDA increased 3% to €258.4 million (2023: €250.3
million). The Snaitech division within B2C was impacted by customer-friendly
sporting results across 2024, and particularly acute at the start of the year.
In September 2024, the Group made two significant announcements:
· The Group entered into a definitive agreement for the sale of
Snaitech to Flutter for a total enterprise value of €2,300 million on a debt
and cash-free valuation basis and assuming a normalised level of working
capital. Following completion of the sale of Snaitech, which is expected in Q2
2025, the Group intends to pay a special dividend of between €1.7 billion
and €1.8 billion. Snaitech was classified as held for sale and its results
for the year have been shown as discontinued operations.
· Playtech entered into a revised strategic agreement with
Caliplay. Under the revised terms, Playtech will hold a 30.8% equity interest
in Caliente Interactive, Inc. ("Cali Interactive"), which will be the new
holding company of Caliplay, incorporated in the United States, and be
entitled to receive dividends alongside other shareholders. The revised
arrangements were conditional upon Mexican antitrust approval, which was
received in March 2025. Following the announcement of the revised agreement
in September 2024, Caliplay resumed paying Playtech its fees, with more than
€150 million having been received in September 2024, which included a
settlement of the entirety of the amount outstanding at 31 December 2023. An
amount of €33.3 million relating to 2024 invoices was paid into an escrow
account and will be released following completion of the revised strategic
agreement and, in any event, by the end of 2025. On 21 March 2025, the Group
announced that all necessary approvals have been received, and completion of
the revised arrangements is now scheduled to take place on 31 March 2025.
Reported and Adjusted Profit
Continuing operations
Adjusted Profit before tax grew by 87% to €99.5 million (2023: €53.1
million), driven mainly by an increase in Adjusted EBITDA and finance income.
Reported loss before tax was €9.4 million (2023: Reported profit before tax
€70.4 million). The movement is due to a reduction in reported EBITDA to
€127.7 million (2023: €152.0 million), increase in impairment of
intangible assets to €119.7 million (2023: €89.8 million) (refer to Note
16-18) and a decrease in the unrealised fair value gain of derivative
financial assets to €61.5 million (2023: €153.4 million) (Note 19C). These
movements were only partly offset by the increase in unrealised fair value
gain of equity investments to €51.1 million (2023: loss of €6.6 million)
(Note 19B) and the increase in finance income.
Total post-tax reported loss was €136.5 million (2023: Total post-tax
reported loss of €12.1 million), with the movement in tax explained
further in this report.
Discontinued operations
Snaitech Adjusted Profit, net of tax, increased to €164.7 million (2023:
€142.6 million). This was mostly driven by a 4% rise in Adjusted EBITDA to
€265.7 million (2023: €256.1 million) and an increase in finance income
from €1.9 million in 2023 to €8.0 million in 2024.
Snaitech Reported Profit, net of tax, decreased slightly to €112.3 million
(2023: €117.2 million), which includes a decrease in reported EBITDA to
€231.1 million (2023: €254.5 million). This was offset by the
aforementioned year-on-year rise in finance income and the decrease in
reported depreciation and amortisation to €75.7 million (2023: €86.7
million).
Balance sheet, liquidity and financing
The Group continues to maintain a strong balance sheet with Adjusted gross
cash, including cash shown within assets held for sale but excluding the cash
held on behalf of clients, progressive jackpots and security deposits, of
€304.9 million as at 31 December 2024 (2023: €363.3 million). Net debt
decreased to €142.8 million as at 31 December 2024 (2023: €282.8 million),
which is a combination of the Group's strong performance and receiving all the
Caliplay prior year outstanding debt in 2024.
Adjusted gross cash above, includes €139.1 million which is part of assets
held for sale at 31 December 2024.
In December 2024, the Group made a €200.0 million partial repayment of the
2019 Bond.
In March 2025, the Group signed an agreement for a new amended €225 million
5-year RCF facility, which, subject to completion of the sale of Snaitech,
will amend and restate the existing €277 million RCF facility and become
effective on completion of the Snaitech sale.
Group summary (continuing operations)(3)
2024 2023
€'m €'m
B2B 754.3 684.1
B2C 97.8 91.6
B2B License fee - intercompany* (4.1) (3.8)
Total Group revenue from continuing operations 848.0 771.9
Adjusted costs(1) (633.3) (595.7)
Adjusted EBITDA from continuing operations 214.7 176.2
Reconciliation from EBITDA to Adjusted EBITDA:
EBITDA 127.7 152.0
Employee stock option expenses 4.7 5.7
Professional fees 22.3 13.4
Contract termination fees 24.0 -
Playtech incentive arrangements 36.0 -
Impairment of investment and receivables - 5.1
Adjusted EBITDA 214.7 176.2
Adjusted EBITDA margin 25% 23%
* B2B license fees paid from the B2C divisions to B2B
Group summary (continuing and discontinued operations)(3)
2024 2023
€'m €'m
B2B 754.3 684.1
B2C 1,052.7 1,037.0
B2B License fee - intercompany* (15.5) (14.4)
Total Group revenue from continuing and discontinued operations 1,791.5 1,706.7
Adjusted costs(1) (1,311.1) (1,274.4)
Adjusted EBITDA from continuing and discontinued operations 480.4 432.3
Reconciliation from EBITDA to Adjusted EBITDA:
EBITDA 358.8 406.5
Employee stock option expenses 5.3 6.3
Professional fees 23.3 14.4
Contract termination fees 24.0 -
Playtech incentive arrangements 69.0 -
Impairment of investment and receivables - 5.1
Adjusted EBITDA 480.4 432.3
Adjusted EBITDA margin 27% 25%
* B2B license fees paid from the B2C divisions to B2B
The Group's total reported EBITDA from continuing and discontinued operations
decreased by 12% to €358.8 million (2023: €406.5 million).
The adjusted items between reported and Adjusted EBITDA from continuing and
discontinued operations are explained in Note 10 and Note 8 of the financial
statements, respectively.
Divisional performance
B2B
B2B revenue
2024 2023 Change Constant
€'m €'m % currency
%
Americas 251.6 211.9 19% 22%
- USA and Canada 29.8 13.2 126% 126%
- Latin America 221.8 198.7 12% 15%
Europe excluding UK 198.7 200.1 -1% -1%
UK 136.2 126.1 8% 5%
Rest of the World 11.9 7.0 70% 70%
Total regulated B2B revenue 598.4 545.1 10% 10%
Unregulated 155.9 139.0 12% 15%
Total B2B revenue 754.3 684.1 10% 11%
Overall, B2B revenues increased by 10% (11% on a constant currency basis),
largely due to an increase in the Americas.
Regulated B2B revenues(2) increased by 10%, driven by an increase in regulated
markets in the Americas and UK of 19% and 8% respectively.
In the US and Canada, revenue growth was driven by a combination of increasing
wallet share with existing licensees, as well as the launching of various new
operators. Growth in Latin America has been driven by Wplay's strong
performance, partly driven by high demand during and post the 2024 Copa
América. Caliplay in Mexico saw good growth on an underlying basis. However,
the additional B2B services revenue element(5) was impacted by one-off items
within Caliplay's distributable results in the second half of the year,
including legal fees from the dispute, interest charge on money owed to
Playtech, customer-friendly sporting results, and an adverse impact from
foreign exchange movements. The European market (excluding the UK) showed a 1%
year-on-year decline in revenues. The loss of a retail sports contract in
Greece, decrease in revenues in the Netherlands due to tighter regulations, as
well as an EBITDA-neutral change in commercial terms with an operator in
Poland have been offset by growth in Spain and Italy, as we continue to see
uptake in our suite of products across key markets.
The UK is showing growth across existing and new licensees mainly in Live.
This growth was partly offset by a decline in revenue from an operator
continuing to insource their self-service betting terminals.
Unregulated revenue increased by 12% (15% on a constant currency basis)
against 2023. The growth was driven by Brazil (which will be reclassified as a
regulated market from 1 January 2025), as well as Canada and India. This was
offset by declines in Asia, although this saw stabilisation in the second half
of the year, following the termination of two existing distributor
arrangements and a subsequent agreement with a new distributor in the region
(refer to Note 6).
B2B costs
2024 2023 Change
€'m €'m %
Research and Development 113.7 100.2 13%
General and Administrative 91.0 85.5 6%
Sales and Marketing 20.0 19.5 3%
Operations 307.6 296.9 4%
Total B2B Costs 532.3 502.1 6%
Total B2B Revenue and Costs
B2B revenue 754.3 684.1 10%
B2B costs (532.3) (502.1) 6%
Total B2B Adjusted EBITDA 222.0 182.0 22%
Margin 29% 27%
Research and Development (R&D) costs, which include employee-related costs
and proportional office expenses, increased by 13% to €113.7 million (2023:
€100.2 million). This rise was driven by a decrease in capitalised costs and
an increase in employee-related costs. Capitalised development costs
represented 29% of total B2B R&D costs in 2024 (2023: 35%). The decline in
the capitalisation ratio was primarily due to the full impairment of the
Sports CGU, resulting in the Group ceasing cost capitalisation in 2024.
General and Administrative costs, encompassing employee-related costs,
proportional office expenses, consulting and legal fees, and corporate costs
such as audit, tax, and listing expenses, increased by 6% to €91.0 million
(2023: €85.5 million). This growth was mainly attributed to increases in
professional fees and other administrative costs.
Sales and Marketing costs remained relatively stable at €20.0 million (2023:
€19.5 million).
Operations costs, which include infrastructure and operational project costs,
IT and security expenses, general day-to-day operational costs (including
employee and office-apportioned costs), and branded content fees, increased by
4% to €307.6 million (2023: €296.9 million). This increase was primarily
driven by the Group's ongoing expansion of Live studios in North America,
Latvia, Peru, and Romania, and a €12.4 million bad debt provision in Asia.
These increases were partially offset by lower branded game fees (due to
changes in commercial terms with an operator in Poland, with no impact on
EBITDA), reduced sports operational costs, and lower reseller commissions.
B2B Adjusted EBITDA
Total B2B Adjusted EBITDA increased by 22% to €222.0 million (2023: €182.0
million), while EBITDA margin increased to 29% from 27% in 2023, driven by the
movement in revenue and costs, as described above. Once the revised agreement
with Caliplay comes into effect on 31 March 2025 (as per the announcement made
by the Group on 21 March 2025), Playtech will no longer receive the additional
B2B services revenue element(4), but will be entitled to receive dividends as
a 30.8% equity holder in Caliente Interactive, Inc. (the new holding company
of Caliplay incorporated in the United States).
B2C
2024 2023 Change
€'m €'m
Continuing operations
Sun Bingo and Other B2C
Revenue 78.9 73.4 7%
Costs (74.4) (67.4) 10%
Adjusted EBITDA 4.5 6.0 -25%
Margin 6% 8%
HAPPYBET
Revenue 18.9 18.2 4%
Costs(**) (30.7) (30.0) 2%
Adjusted EBITDA (11.8) (11.8) -1%
Margin N/A N/A
Discontinued operations
Snaitech
Revenue(*) 956.1 946.6 1%
Costs (690.4) (690.5) 0%
Adjusted EBITDA 265.7 256.1 4%
Margin 28% 27%
Continuing and discontinued operations
B2C Adjusted EBITDA 258.4 250.3 3%
Margin 25% 24%
Continuing operations
B2C Adjusted EBITDA (7.3) (5.8) 26%
Margin N/A N/A
* Includes intercompany revenue from HAPPYBET of €1.2 million (2023:
€1.2 million).
** Includes intercompany costs from Snaitech of €1.2 million (2023:
€1.2 million).
Snaitech (discontinued operations)
Snaitech revenues increased by 1% from the prior year to €956.1 million
(2023: €946.6 million), as they were affected by customer-friendly sports
results in 2024. Operating costs remained stable at €690.4 million (2023:
€690.5 million) due to the impact of operational efficiency
activities.
As a result of Snaitech's movement in revenue and costs, Adjusted EBITDA
increased by 4% with a slight improvement to the margin at 28%, compared to
27% in 2023.
Sun Bingo and Other B2C
Revenue from the Sun Bingo business increased by 7% to €78.9 million (2023:
€73.4 million). Operating costs within Sun Bingo increased by 10% to €74.4
million (2023: €67.4 million), leading to an Adjusted EBITDA of €4.5
million (2023: €6.0 million). The decrease in Adjusted EBITDA is attributed
to an acceleration of marketing spend in 2024 to fuel further growth, as well
as the impact of tighter regulation that came into effect during the year.
Adjusted EBITDA continues to include the unwinding of the minimum guarantee
prepayment of €5.3 million in the current year (2023: €5.2 million),
recognised as an expense over the period of the new contract which was
renegotiated in 2019.
HAPPYBET
Revenue from HAPPYBET increased by 4% to €18.9 million (2023: €18.2
million), with costs increasing by 2%. The business remains loss-making, with
Adjusted EBITDA loss in 2024 of €11.8 million (2023: loss of €11.8
million). The current year includes shut down costs of the Austrian arm of the
HAPPYBET business, whereas 2023 costs included a €2.0 million expense for a
historic litigation settlement.
Depreciation and amortisation
Reported and adjusted depreciation for continuing operations increased by 17%
to €36.7 million (2023: €31.4 million). Adjusted amortisation for
continuing operations (excluding amortisation of acquired intangibles of
€6.2 million (2023: €12.0 million), decreased by 8% to €44.0 million
(2023: €47.8 million). The remainder of the balance under depreciation and
amortisation for continuing operations of €17.3 million (2023: €16.5
million) relates to IFRS 16 Leases and the recognition of the right-of-use
asset amortisation.
Impairment of intangible assets
The reported impairment of intangible assets of €119.7 million (2023:
€89.8) mainly relates to:
· the impairment of the IGS cash-generating unit (CGU) of €4.9
million, following the termination of two key contracts;
· the impairment of the Sports B2B CGU of €96.3 million, driven
by the revised strategic agreement with Caliplay, which we expect to impact
the sports revenue generated from 2025, as well as expected reductions in
revenue from other sports licensees, following contractual changes; and
· the impairment of Quickspin CGU of €18.2 million due to the
challenges of operating in an extremely competitive market with stricter
regulations being introduced.
The prior year impairment of €89.8 million mainly related to the impairments
of the Eyecon CGU of €7.8 million, Quickspin CGU of €9.6 million and B2B
Sports CGU of €72.2 million.
Finance income and finance costs
The reported finance income for continuing operations of €30.2 million
(2023: €10.2 million) mainly relates to net foreign exchange gain of €7.2
million (2023: €2.1 million), interest received of €19.7 million (2023:
€8.0 million) with 2024 including €7.5 million interest from Caliplay and
dividend income of €3.3 million (2023: €0.1 million), of which €3.2
million was from Hard Rock Digital (2023: €Nil).
Reported finance costs from continuing operations include interest payable on
bonds and other borrowings, bank facility fees, bank charges, interest expense
on lease liabilities and expected credit losses on loan receivables. Reported
finance costs from continuing operations were €46.5 million (2023: €41.8
million), whereas Adjusted finance costs were €42.7 million (2023: €38.3
million). The difference between adjusted and reported finance costs from
continuing operations is the movement in contingent consideration of €3.8
million (2023: €3.5 million) which mainly relates to the acquisition of AUS
GMTC PTY Ltd.
Unrealised fair value changes in derivative financial assets
The unrealised fair value increase in derivative financial assets from
continuing operations of €61.5 million (2023: €153.4 million) is due to
the movement of the fair value of the various call options held by the Group
which fall under the definition of derivatives within IFRS 9 Financial
Instruments, with the most significant increase being as a result of the
uplift in the fair value of the Playtech M&A Call Option in Caliplay of
€71.7 million.
The unrealised fair value gain of equity investments of €51.1 million
(2023: loss of €6.6 million) is mostly driven by the uplift in the value of
the Group's small minority interest in Hard Rock Digital.
Further details on the fair value of the various call options and equity
investments are disclosed in Note 19 of the financial statements.
Taxation
A reported tax expense from continuing operations of €127.1 million (2023:
€82.5 million) arises on a reported loss before tax from continuing
operations of €9.4 million (2023: profit before tax of €70.4 million)
compared to an expected credit of €2.4 million based on the UK headline rate
of tax for the period of 25%. The key items for which the reported tax charge
has been adjusted are the release of brought forward deferred tax assets of
€57.0 million as expected utilization would fall outside the forecasting
period and therefore there is not sufficient certainty they will be recovered.
The total adjusted tax expense from continuing operations is €41.0 million
(2023: €38.9 million) which arises on an Adjusted Profit before tax from
continuing operations of €99.5 million (2023: €53.1 million). The total
adjusted tax expense from continuing operations of €41.0 million consists of
an income tax expense of €25.3 million (2023: €24.4 million) and a
deferred tax expense of €15.7 million (2023: €14.5 million). The Group's
effective adjusted tax rate for continuing operations for the current period
is 41.2%. This rate is higher than the UK headline rate for the period of 25%.
The key reasons for the differences are current year tax losses not recognised
for deferred tax purposes and expenses not deductible for tax purposes which
includes impairment of intangibles.
Adjusted Profit
2024 2023
€'m €'m
Reported loss from continuing operations (136.5) (12.1)
Employee stock option expenses 4.7 5.7
Professional fees 22.3 13.4
Contract termination fees 24.0 -
Playtech incentive arrangements 36.0 -
Fair value changes and finance costs on contingent consideration 3.8 3.5
Impairment of investment and receivables - 5.1
Fair value changes of equity instruments (51.1) 6.6
Fair value changes of derivative financial assets (61.5) (153.4)
Amortisation of intangible assets on acquisitions 6.2 12.0
Impairment of intangible assets, property plant and equipment and right of use 120.2 89.8
assets
Provision against assets held for sale 4.3 -
Deferred tax on intangible assets on acquisitions (8.0) (1.6)
Release of brought forward deferred tax asset 30.9 37.2
Release of brought forward deferred tax asset on group restructuring 26.1 -
Tax on unrealised fair value changes of derivative financial assets 10.9 -
Deferred tax on unrealised fair value changes of equity investments 12.9 -
Deferred tax asset recognised in respect of refundable tax credit relating to (6.5)
prior years
Tax related to uncertain positions - 8.0
Income tax relating to prior years 19.8 -
Adjusted Profit from continuing operations 58.5 14.2
The reconciling items in the table above are further explained in Note 10 of
the financial statements. Reported loss post tax from continuing operations
was €136.5 million (2023: loss €12.1 million).
Adjusted EPS (in Euro cents)
2024 2023
Adjusted basic EPS from continuing operations 19.2 4.7
Adjusted diluted EPS from continuing operations 18.8 4.6
Basic EPS from profit attributable to the owners of the Company (7.8) 34.7
Diluted EPS from profit attributable to the owners of the Company (7.8) 33.7
Basic EPS from profit attributable to the owners of the Company from (44.6) (3.9)
continuing operations
Diluted EPS from profit attributable to the owners of the Company from (44.6) (3.9)
continuing operations
Basic EPS is calculated using the weighted average number of equity shares in
issue during 2024 of 305.4 million (2023: 303.3 million). Diluted EPS also
includes the dilutive impact of share options and is calculated using the
weighted average number of shares in issue during 2024 of 311.7 million (2023:
311.9 million).
Discontinued operations
Snaitech
An announcement was made on 17 September 2024 that Playtech Services (Cyprus)
Limited, a subsidiary of the Group, has entered into a definitive agreement
for the sale of the Snaitech B2C segment to Flutter Entertainment Holdings
Ireland Limited, a subsidiary of Flutter Entertainment plc ("Flutter"), for a
total enterprise value of €2,300 million in cash. Following this
announcement, the Snaitech division was classified as an asset held for sale
and its results for the year shown in discontinued operation.
Total reported profit after tax from discontinued operations (which only
includes the results of the Snaitech division) decreased to €112.3 million
from €117.2 million in 2023, whereas Adjusted profit after tax increased to
€164.7 million (2023: €142.6 million).
Adjusted EBITDA for this division has been analysed above. Reported EBITDA
decreased to €231.1 million (2023: €254.5 million). The majority of the
difference between Reported and Adjusted EBITDA in 2024 was the Snaitech cash
bonus payable to the Snaitech senior management team on completion of the SNAI
disposal, which is not included in Adjusted EBITDA as it is considered a
one-off bonus.
The full profit or loss of this division can be found in Note 8 of the
financial statements.
Cash flow
Cash conversion (continuing and discontinued operations)
Playtech continues to be cash generative and delivered operating cash flows of
€391.1 million (2023: €358.8 million) including cash from both continuing
and discontinued operations.
2024 2023
€'m €'m
Adjusted EBITDA 480.4 432.3
Net cash provided by operating activities 391.1 358.8
Cash conversion 81% 83%
Change in jackpot balances (1.9) 3.3
Change in client funds 5.7 (2.1)
Professional fees 23.2 14.4
ADM security deposit (Italian Regulator) (0.2) 0.7
Adjusted net cash provided by operating activities 417.9 375.1
Adjusted cash conversion 87% 87%
Adjusted cash conversion of 87% (2023: 89%) is shown after adjusting for
jackpot balances, client funds, professional fees and ADM security deposit.
Adjusting for the above cash fluctuations is essential in order to truly
reflect the quality of revenue and cash collection. This is because the timing
of cash inflows and outflows for jackpots, security deposits and client funds
only impact the reported operating cash flow and not Adjusted EBITDA, while
professional fees are excluded from Adjusted EBITDA but impact operating cash
flow.
Cash conversion (excluding discontinued operations)
2024 2023
€'m €'m
Adjusted EBITDA 214.7 176.2
Net cash provided by operating activities 147.2 119.8
Cash conversion 69% 68%
Change in jackpot balances (3.1) 3.4
Change in client funds and security deposits 1.2 0.5
Professional fees 22.3 13.4
Adjusted net cash provided by operating activities 167.6 137.1
Adjusted cash conversion 78% 78%
Cash flow statement analysis
Net cash outflows used in investing activities totalled €188.4 million
(2023: €309.5 million), key items of which include:
· €18.9 million for the additional acquisition in LSports and
acquisition of the Telnlot El Salvador option of €2.1 million (refer to Note
19);
· €155.8 million (2023: €150.0 million) used in the acquisition
of property plant and equipment, intangibles and capitalised development
costs.
Net cash outflows from financing activities totalled €266.0 million (2023:
inflows of €39.9 million), key movements of which include:
· 2024 includes the partial repayment of the 2019 Bond of €200.0
million in December 2024;
· 2023 includes partial payment of the 2018 Bond of €200.0
million and net proceeds of €297.2 million received from the new Bond issued
in 2023.
Balance sheet, liquidity and financing
Cash
2024 2023
€'m €'m
Cash and cash equivalents (net of ECL) 268.1 516.2
Cash and cash equivalents included in assets held for sale 185.9 -
Total cash 454.0 516.2
Cash held on behalf of clients, progressive jackpots and security deposits (102.3) (152.9)
Cash held on behalf of clients, progressive jackpots and security deposits (46.8) -
included in assets held for sale
Adjusted gross cash and cash equivalents 304.9 363.3
Bonds 447.7 646.1
Gross debt 447.7 646.1
Net debt 142.8 282.8
Adjusted EBITDA 480.4 432.3
Net debt/Adjusted EBITDA ratio 0.3 0.7
The Group continues to maintain a strong balance sheet with total cash and
cash equivalents of €454.0 million at 31 December 2024 (2023: €516.2
million). Adjusted gross cash, which excludes the cash held on behalf of
clients, progressive jackpots and security deposits, decreased to
€304.9 million as at 31 December 2024 (2023: €363.3 million).
Financing and net debt
As at 31 December 2024, the Group had the following borrowing facilities:
· €150.0 million 2019 Bond (2023: €350.0 million) (4.25%
coupon, maturity 2026) which was raised in March 2019;
· Undrawn €277.0 million revolving credit facility (2023:
Undrawn); This facility is available until October 2025, with a current option
to extend by 12 months; and
· €300.0 million 2023 Bond (2023: €300.0 million) (5.875%
coupon, maturity 2028) which was raised in June 2023;
Net debt, after deducting Adjusted gross cash, decreased to €142.8 million
(2023: €282.8 million), while net debt/Adjusted EBITDA fell to 0.3x (2023:
0.7x).
On 26 March 2025, the Group signed an agreement for a new amended €225
million 5-year RCF facility, which, subject to completion of the sale of
Snaitech (expected to occur in Q2 2025), will amend and restate the existing
€277 million RCF facility and become effective on completion of the sale.
Contingent and deferred consideration
Contingent consideration (excluding liabilities held for sale) increased to
€17.9 million (2023: €6.2 million) mostly due to the recognition of
deferred consideration payable on the purchase of the Tenlot El Salvador
option and additional acquisition in LSports (refer to Note 19 of the
financial statements). The existing liability as at 31 December 2024 comprised
the following:
Acquisition Maximum payable earnout Contingent/deferred consideration as at 31 December 2024 Payment date (based on
(per terms of acquisition) maximum payable earnout)
Aus GMTC PTY Ltd €48.1 million €9.8 million Q1 2026
LSports €6.9 million €6.9 million Q1 2025
Tenlot El Salvador €1.2 million €1.2 million Q4 2025
Included in liabilities held for sale at 31 December 2024 are €2.0 million
in relation to various acquisitions made by Snaitech (2023: €0.8 million
included in Group liabilities).
Going concern and viability assessment
In adopting the going concern basis in the preparation of the financial
statements, the Group has considered the current trading performance,
financial position and liquidity of the Group, the principal risks and
uncertainties together with scenario planning and reverse stress tests
completed for a period of no less than 15 months from the approval of these
financial statements.
Given the announcement published in September 2024 on the definitive agreement
for the sale of Snaitech S.p.A. to Flutter Entertainment Holdings Ireland
Limited and considering the high likelihood that the transaction will complete
by Q2 2025 the Directors have assessed only one base case scenario, being the
Group without Snaitech.
As per the going concern assessment under Note 2, the Directors have a
reasonable expectation that the Group will have adequate financial resources
to continue in operational existence over the relevant going concern period
and have therefore considered it appropriate to adopt the going concern basis
of preparation in these financial statements.
1 Adjusted numbers throughout relate to certain non-cash and one-off
items. The Board of Directors believes that the adjusted results represent
more closely the consistent trading performance of the business. A full
reconciliation between the actual and adjusted results is provided in Note 10
of the financial statements.
2 Core B2B refers to the Company's B2B business excluding
unregulated Asia.
3 Totals in tables throughout this statement may not exactly equal the
components of the total due to rounding.
4 Additional B2B service fee as explained in Note 6 of the financial
statements is based on predefined revenue generated by each customer under
each structured agreement which is typically capped at a percentage of the
profit (also defined in each agreement) generated by the customer.
Consolidated statement of comprehensive income
For the year ended 31 December 2024
2024 2023
Note Actual Adjusted Actual Adjusted
€'m €'m 1 €'m 2 €'m 1,2
Continuing operations
Revenue 9 848.0 848.0 771.9 771.9
Distribution costs before depreciation and amortisation (553.0) (527.2) (500.7) (499.4)
Administrative expenses before depreciation and amortisation (156.7) (95.5) (112.9) (91.4)
Impairment of financial assets (10.6) (10.6) (6.3) (4.9)
EBITDA 10 127.7 214.7 152.0 176.2
Depreciation and amortisation (104.2) (98.0) (107.7) (95.7)
Impairment of property, plant and equipment, intangible assets and right of 16,17,18 (120.2) -
use assets
(89.8) -
Provision against asset held for sale 24 (4.3) - - -
(Loss)/Profit on disposal of property, plant and equipment and (0.9) (0.9) 1.6 1.6
intangible assets
Finance income 12A 30.2 30.2 10.2 10.2
Finance costs 12B (46.5) (42.7) (41.8) (38.3)
Share of loss from associates 19A (3.8) (3.8) (0.9) (0.9)
Unrealised fair value changes of equity investments 19B 51.1 - (6.6) -
Unrealised fair value changes of derivative financial assets 19C 61.5 - 153.4 -
Profit/(Loss) before taxation from continuing operations 10 (9.4) 99.5 70.4 53.1
Income tax expense 10, 13 (127.1) (41.0) (82.5) (38.9)
Profit/(Loss) after taxation from continuing operations 10 (136.5) 58.5 (12.1) 14.2
Profit from discontinued operations, net of tax 8 112.3 164.7 117.2 142.6
Profit/(Loss) for the year - total (24.2) 223.2 105.1 156.8
Other comprehensive loss:
Items that are or may be classified subsequently to profit or loss:
Exchange gain/(loss) arising on translation of foreign operations 12.7 12.7 (7.7) (7.7)
Other comprehensive income/(loss) for the year 12.7 12.7 (7.7) (7.7)
Total comprehensive income/(loss) for the year (11.5) 235.9 97.4 149.1
Profit for the year attributable to the owners of the Company
Owners of the Company (23.9) 223.5 105.1 156.8
Non-controlling interests 25F (0.3) (0.3) - -
(24.2) 223.2 105.1 156.8
Total comprehensive income/(loss) attributable to the owners of the Company
Owners of the Company (11.2) 236.2 97.4 149.1
Non-controlling interests 25F (0.3) (0.3) - -
(11.5) 235.9 97.4 149.1
Earnings per share attributable to the ordinary equity holders of the Company
Profit or loss - total
Basic (cents) 14 (7.8) 73.2 34.7 51.7
Diluted (cents) 14 (7.8) 71.7 34.7 50.2
Profit or loss from continuing operations
Basic (cents) 14 (44.6) 19.2 (3.9) 4.7
Diluted (cents) 14 (44.6) 18.8 (3.9) 4.6
1 Adjusted numbers relate to certain non-cash and one-off items. The
Board of Directors believes that the adjusted results more closely represent
the consistent trading performance of the business. A full reconciliation
between the actual and adjusted results is provided in Note 10.
2 Comparative information has been represented as the Group now has
discontinued operations, as further disclosed in Note 8.
Consolidated statement of changes in equity
For the year ended 31 December 2024
Additional Employee Retained Employee Foreign Total Non- Total
paid in termination earnings Benefit exchange attributable controlling equity
capital indemnities €'m Trust reserve to equity interests €'m
€'m €'m €'m €'m holders of €'m
Company
€'m
Balance at 1 January 2023, as previously reported 606.0 0.4 1,113.0 (17.2) 0.3 1,702.5 - 1,702.5
Prior year adjustment (Note 37) - - 15.3 - - 15.3 - 15.3
Restated as at 1 January 2023 606.0 0.4 1,128.3 (17.2) 0.3 1,717.8 - 1,717.8
Total comprehensive income for the year
Profit for the year - - 105.1 - - 105.1 - 105.1
Other comprehensive loss for the year - - - - (7.7) (7.7) - (7.7)
Total comprehensive income for the year - - 105.1 - (7.7) 97.4 - 97.4
Transactions with the owners of the Company
Contributions and distributions
Exercise of options - - (11.9) 11.9 - - - -
Equity-settled share-based payment charge - - 6.3 - - 6.3 - 6.3
Transfer from treasury shares to Employee Benefit Trust 5.8 - 6.7 (12.5) - - - -
Total contributions and distributions 5.8 - 1.1 (0.6) - 6.3 - 6.3
Total transactions with owners of the Company 5.8 - 1.1 (0.6) - 6.3 - 6.3
Balance at 31 December 2023/1 January 2024 611.8 0.4 1,234.5 (17.8) (7.4) 1,821.5 - 1,821.5
Total comprehensive income for the year
Loss for the year - - (23.9) - - (23.9) (0.3) (24.2)
Other comprehensive income for the year - - - - 12.7 12.7 - 12.7
Total comprehensive income/(loss) for the year - - (23.9) - 12.7 (11.2) (0.3) (11.5)
Transactions with the owners of the Company
Contributions and distributions
Exercise of options - - (9.1) 9.1 - - - -
Equity-settled share-based payment charge - - 5.3 - - 5.3 - 5.3
Total contributions and distributions - - (3.8) 9.1 - 5.3 - 5.3
Acquisition of subsidiary with non-controlling interests - - - - - - (0.2) (0.2)
Total changes in ownership interests - - - - - - (0.2) (0.2)
Total transactions with owners of the Company - - - 5.3 (0.2) 5.1
(3.8) 9.1
Balance at 31 December 2024 611.8 0.4 1,206.8 (8.7) 5.3 1,815.6 (0.5) 1,815.1
Consolidated balance sheet
As at 31 December 2024
2024 2023 2022
Note €'m €'m 1 €'m 1
ASSETS
Property, plant and equipment 16 93.9 350.2 341.4
Right of use assets 17 34.0 71.0 71.6
Intangible assets 18 314.1 881.2 980.9
Investments in associates 19A 76.4 51.5 36.6
Other investments 19B 152.1 92.8 9.2
Derivative financial assets 19C 895.0 827.8 636.4
Trade receivables 21 - 1.9 1.1
Deferred tax asset 31 16.6 77.8 129.3
Other non-current assets 20 147.0 137.0 109.6
Non-current assets 1,729.1 2,491.2 2,316.1
Trade receivables 21 141.6 207.1 163.9
Other receivables 22 85.8 100.5 107.6
Inventories 6.9 6.8 5.5
Cash and cash equivalents 23 268.1 516.2 426.5
502.4 830.6 703.5
Assets classified as held for sale 24 1,066.4 19.3 19.6
Current assets 1,568.8 849.9 723.1
TOTAL ASSETS 3,297.9 3,341.1 3,039.2
EQUITY
Additional paid in capital 611.8 611.8 606.0
Employee termination indemnities 0.4 0.4 0.4
Employee Benefit Trust (8.7) (17.8) (17.2)
Foreign exchange reserve 5.3 (7.4) 0.3
Retained earnings 1,206.8 1,234.5 1,128.3
Equity attributable to equity holders of the Company 1,815.6 1,821.5 1,717.8
Non-controlling interests (0.5) - -
TOTAL EQUITY 25 1,815.1 1,821.5 1,717.8
LIABILITIES
Bonds 27 447.7 646.1 348.0
Lease liability 17 26.5 61.9 54.0
Deferred revenues 1.1 1.8 1.0
Deferred tax liability 31 19.2 161.6 124.8
Deferred and contingent consideration 29 9.8 5.8 2.3
Provisions for risks and charges 28 - 8.9 10.0
Other non-current liabilities 32 15.1 34.8 24.9
Non-current liabilities 519.4 920.9 565.0
Bonds - - 199.6
Trade payables 30 61.6 66.9 61.2
Lease liability 17 19.8 24.9 31.8
Progressive operators' jackpots and security deposits 23 99.8 111.0 114.3
Client funds 23 2.5 41.9 39.8
Income tax payable 45.0 14.0 17.3
Gaming and other taxes payable 4.8 116.1 112.8
Deferred revenues 5.8 4.4 5.0
Deferred and contingent consideration 29 8.1 0.4 0.6
Provisions for risks and charges 28 - 0.6 3.9
Other payables 32 210.8 217.5 169.1
458.2 597.7 755.4
Liabilities directly associated with assets classified as held for sale 24 505.2 1.0 1.0
Current liabilities 963.4 598.7 756.4
TOTAL LIABILITIES 1,482.8 1,519.6 1,321.4
TOTAL EQUITY AND LIABILITIES 3,297.9 3,341.1 3,039.2
The consolidated financial statements were approved by the Board and
authorised for issue on 27 March 2025.
Mor Weizer
Chris McGinnis
Chief Executive Officer
Chief Financial Officer
1 See Note 37 for details regarding a restatement as a result of a prior year
error.
Consolidated statement of cash flows
For the year ended 31 December 2024
Note 2024 2023
€'m €'m
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss)/Profit for the year (24.2) 105.1
Adjustments to reconcile net income to net cash provided by operating 452.7 299.6
activities (see below)
Net taxes paid (37.4) (45.9)
Net cash from operating activities 391.1 358.8
CASH FLOWS FROM INVESTING ACTIVITIES
Loans granted 20 (28.1) (23.8)
Loans repaid 2.8 0.4
Interest received 22.9 8.1
Dividend income 3.5 1.5
Acquisition of subsidiaries/assets under business combinations, net of cash 18 (12.0) (3.6)
acquired
Acquisition of property, plant and equipment 16 (62.3) (57.6)
Acquisition of intangible assets (44.7) (35.7)
Capitalised development costs (48.8) (56.7)
Acquisition of investment in associates 19A (18.9) (9.2)
Acquisition of investments at fair value through profit or loss 19B,19C (4.9) (94.1)
Subcontractor option redemption 19C - (41.3)
Proceeds from the sale of property, plant and equipment and intangible assets 2.1 2.5
Net cash used in investing activities (188.4) (309.5)
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid on bonds and loans and borrowings (35.0) (31.3)
Repayment of loans and borrowings - (77.4)
Proceeds from loans and borrowings - 79.9
Proceeds from the issuance of 2023 Bond, net of issue costs 27 - 297.2
Repayment of 2018 Bonds 27 - (200.0)
Repayment of 2019 Bonds 27 (200.0) -
Payment of contingent consideration (0.5) (0.2)
Principal paid on lease liability (25.8) (23.1)
Interest paid on lease liability (4.7) (5.2)
Net cash (used in)/from financing activities (266.0) 39.9
(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (63.3) 89.2
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 516.6 426.9
Exchange gain on cash and cash equivalents 1.1 0.5
CASH AND CASH EQUIVALENTS AT END OF YEAR 454.4 516.6
Cash and cash equivalent consists of:
Cash and cash equivalent - continuing operations 23 268.5 516.6
Cash and cash equivalent - treated as held for sale 23,24 185.9 -
454.4 516.6
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED FROM OPERATING
ACTIVITIES
Income and expenses not affecting operating cash flows:
Depreciation on property, plant and equipment 16 48.9 46.5
Amortisation of intangible assets 18 109.0 126.7
Amortisation of right of use assets 17 23.3 23.3
Capitalisation of amortisation of right of use assets (1.2) (1.7)
Impact on early termination of lease contracts 17 (0.3) (0.4)
Share of loss from associates 19A 3.8 0.8
Impairment and expected credit losses on loans receivable 20 2.6 2.4
Impairment of investment 19B - 1.3
Impairment of other receivables - 2.2
Impairment of intangible assets, property, plant and equipment and right of 16,17,18 120.2 89.8
use assets
Provision against assets held for sale 24 4.3 -
Changes in fair value of equity investments 19B (51.1) 6.6
Changes in fair value of derivative financial assets 19C (61.5) (153.4)
Dividend income (3.3) -
Interest on bonds and loans and borrowings 34.0 30.9
Interest on lease liability 4.7 5.2
Interest income on loans receivable 20 (3.3) (1.9)
Interest income from banks and other (24.5) (8.1)
Income tax expense 173.1 130.7
Changes in equity-settled share-based payment 5.3 6.3
Movement in contingent consideration 3.8 3.3
Unrealised exchange gain (5.7) (2.9)
Loss/(profit) on disposal of property, plant and equipment and intangible 0.6 (1.4)
assets
Changes in operating assets and liabilities:
Change in trade receivables (15.1) (47.9)
Change in other receivables (24.0) (0.4)
Change in inventories (0.7) (1.3)
Change in trade payables 19.4 4.5
Change in progressive operators, jackpots and security deposits 1.9 (3.3)
Change in client funds (5.6) 2.0
Change in other payables 93.1 44.1
Change in provisions for risks and charges (0.7) (4.6)
Change in deferred revenues 1.7 0.3
452.7 299.6
Notes to the financial statements
Note 1 - General
Playtech plc (the "Company") is an Isle of Man company. The registered office
is located at St George's Court, Upper Church Street, Douglas, Isle of Man
IM1 1EE. Playtech plc is managed and controlled in the UK and, as a result, is
UK tax resident.
These consolidated financial statements comprise the Company and its
subsidiaries (together referred to as the "Group").
Note 2 - Basis of accounting
This financial information does not constitute the Group or company's
statutory accounts for the years ended 31 December 2024 or 2023 but is derived
from those accounts. The auditor has reported on those accounts; their reports
were (i) unqualified and (ii) did not include a reference to any matters to
which the auditor drew attention by way of emphasis without qualifying their
report. The financial information has been prepared in accordance with the UK
adopted International Accounting Standards (IAS).
Details of the Group's accounting policies are included in Notes 4 and 5.
Going concern basis
In adopting the going concern basis in the preparation of the financial
statements, the Directors have considered the current trading performance,
financial position and liquidity of the Group, the principal and emerging
risks and uncertainties together with scenario planning and reverse stress
tests. The Directors have assessed going concern over a 15-month period to 30
June 2026 which aligns with the six-monthly covenant measurement period.
31 December 31 December
2024 2023
€'m €'m
Cash and cash equivalents 454.0 516.2
Cash held on behalf of clients, progressive jackpots and security deposits (149.1) (152.9)
Adjusted gross cash and cash equivalents 304.9 363.3
The decrease in adjusted gross cash and cash equivalents from €363.3 million
at 31 December 2023 to €304.9 million at 31 December 2024 is due to the bond
repayment of €200.0 million in December 2024 offset by cash generation due
to the strong Group performance in 2024. The cash position during the year
improved significantly due to the resolution of the Caliplay dispute which
meant that all aged outstanding amounts were repaid, with a balance held in
escrow that will be released either on completion of the revised Caliplay
arrangements, or in any case by the end of 2025.
The base case cash flows for the going concern period include only the
continuing operations post sale of Snaitech, implementation of the revised
terms of the Caliplay arrangements (Note 6), repayment in 2025 of the
remaining €150 million of the original €350.0 million 2019 Bond and
activation of a new RCF on completion of the sale of Snaitech (see below).
The Directors have reviewed liquidity and covenant forecasts for the Group and
have also considered sensitivities in respect of potential downside scenarios,
reverse stress tests and the mitigating actions available to management. The
modelling of downside stress test scenarios assessed if there is a significant
risk to the Group's liquidity and covenant compliance position. This includes
risks such as not realising budget/forecasts across certain markets and the
unlikely event that no dividend is received from Caliplay, post the completion
of the revised arrangements.
The Group's principal financing arrangements as at 31 December 2024 includes a
revolving credit facility (RCF) of up to €277.0 million (which as at 31
December 2024 remains fully undrawn), as well as the remaining outstanding
balance of the 2019 Bond of €150.0 million (€200.0 million was repaid in
December 2024) and the 2023 Bond of €300.0 million, which are repayable in
March 2026 and June 2028 respectively.
The current RCF of €277.0 million is available until October 2025, with the
Group having the option to request a 12 month extension. On 26 March 2025,
the Group signed an agreement for a new amended €225.0 million 5-year RCF
facility, which, subject to completion of the sale of Snaitech (expected to
occur in Q2 2025), will amend and restate the existing €277.0 million RCF
facility and become effective on completion of the Snaitech sale.
If the sale of Snaitech does not proceed to completion, the Group would
exercise the option to extend the current RCF to October 2026. In those
circumstances, it is not currently anticipated that the Group would experience
any issues in negotiating a new RCF prior to October 2026.
The existing RCF is subject to certain financial covenants which are tested
every six months on a rolling 12-month basis, as set out in Notes 26 and 27.
Under the amended RCF, the below covenant ratios have not changed. As at 31
December 2024, the Group comfortably met its covenants, which were as
follows:
• Leverage: Net Debt/Adjusted EBITDA to be less than 3.5:1 for the
12 months ended 31 December 2024 (2023: less than 3.5:1).
• Interest cover: Adjusted EBITDA/Interest to be over 4:1 for the 12
months ended 31 December 2024 (2023: over 4:1).
The Bonds only have one financial covenant, being the Fixed Charge Coverage
Ratio (same as the Interest cover ratio for the RCF), which should equal or be
greater than 2:1.
If the Group's results and cash flows are in line with its base case
projections as approved by the Board, it would not be in breach of the
financial covenants (under both the existing but also amended RCF that will
become effective following the Snaitech disposal) for a period of no less than
15 months from approval of these financial statements (the "relevant going
concern period"). This period covers the bank reporting requirements for June
2025, December 2025 and June 2026 and is the main reason why the Directors
selected a 15-month period of assessment. Under the base case scenario, the
Group would not need to utilise its RCF facility over the going concern
period.
Stress test
The stress test assumes a worst-case scenario for the entire Group which
includes additional sensitivities around USA and Latin America but with
mitigations available (including capital expenditure reductions) if needed. It
also assumes a scenario whereby Caliplay does not pay any dividends once the
revised arrangements are completed (Playtech will own a 30.8% stake in
Caliplay Interactive - see Note 6), although this is considered extremely
remote since (subject to available cash and applicable law) Playtech and all
other Caliplay Interactive stockholders will receive dividends, at least
quarterly, pursuant to an agreed dividend policy.
Under this scenario, the Group would still comfortably meet its covenants.
From a liquidity perspective the Group would still not need to utilise the
RCF.
Reverse stress test
The reverse stress test was used to identify the reduction in Adjusted EBITDA
required that could result in either a liquidity event or breach of the RCF
and bond covenants.
As a result of completing this assessment, without considering further
mitigating actions, management considered the likelihood of the reverse stress
test scenario arising to be remote. In reaching this conclusion, management
considered the following:
• current trading is performing above the base case;
• Adjusted EBITDA would have to fall by 67% in the year ending 31
December 2025 and 78% in the 12 months to June 2026, compared to the base
case, to cause a breach of covenants; and
• in the event that revenues decline to this point to drive the
decrease in Adjusted EBITDA, additional mitigating actions are available to
management which have not been factored into the reverse stress test
scenario.
As such, the Directors have a reasonable expectation that the Group will have
adequate financial resources to continue in operational existence over the
relevant going concern period and have therefore considered it appropriate to
adopt the going concern basis in preparing these financial statements.
Note 3 - Functional and presentation currency
These consolidated financial statements are presented in Euro, which is the
Company's functional currency. The main functional currencies for subsidiaries
includes Euro, United States Dollar and British Pound. All amounts have been
rounded to the nearest million, unless otherwise indicated.
Note 4 - Accounting standards issued but not yet effective
A number of new standards are effective for annual periods beginning after 1
January 2024 and earlier application is permitted. However, the Group has not
early adopted the following new or amended accounting standards in preparing
these consolidated financial statements.
New standards, interpretations and amendments not yet effective
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early.
The following amendments are effective for the annual reporting period
beginning 1 January 2026:
Amendments to the Classification and Measurement of Financial Instruments
(Amendments to IFRS 9 Financial Instruments and IFRS 7).
The Group is currently assessing the effect of these new amendment.
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 will replace IAS 1 Presentation of Financial Statements and applies
for annual reporting periods beginning on or after 1 January 2027. The new
standard introduces the following key new requirements:
· Entities are required to classify all income and expenses into
five categories in the statement of profit or loss, namely the operating,
investing, financing, discontinued operations and income tax categories.
Entities are also required to present a newly defined operating profit
subtotal. Entities' net profit will not change.
· Management defined performance measures (MPMs) are disclosed in a
single note in the financial statements.
· Enhanced guidance is provided on how to group information in the
financial statements.
In addition, all entities are required to use the operating profit subtotal as
the starting point for the statement of cash flows when presenting operating
cash flows under the indirect method. The Group is currently assessing the
effect of this new standard.
Note 5 - Material accounting policies
The Group has consistently applied the following accounting policies to all
periods presented in the consolidated financial statements, except if
mentioned otherwise.
A. Basis of consolidation
(i) Business combinations
The Group accounts for business combinations using the acquisition method when
the acquired set of activities and assets meets the definition of a business
and control is transferred to the Group. In determining whether a particular
set of activities and assets is a business, the Group assesses whether the set
of assets and activities acquired includes, at a minimum, an input and
substantive process and whether the acquired set has the ability to produce
outputs.
The consideration transferred in the acquisition is generally measured at fair
value, as are the identifiable net assets acquired. Any goodwill arising is
tested for impairment at least annually, or more frequently if there are
indicators of impairment. Any gain on a bargain purchase is recognised in
profit or loss immediately. Transaction costs are expensed as incurred, except
if related to the issue of debt or equity securities.
Any contingent consideration is measured at fair value at the date of
acquisition. If an obligation to pay contingent consideration that meets the
definition of a financial instrument is classified as equity, then it is not
remeasured, and settlement is accounted for within equity. Otherwise, other
contingent consideration is remeasured at fair value at each reporting date
and subsequent changes in the fair value of the contingent consideration are
recognised in profit or loss. A contingent consideration arrangement in which
the contingent payments are forfeited if employment is terminated is
compensation for the post-combination services and is not included in the
calculation of the consideration and recognised as employee-related costs.
Cash payments arising from settlement of contingent consideration and
redemption liability are disclosed in financing activities in the consolidated
statement of cash flows.
When a business combination is achieved in stages, the Group's previously held
interests in the acquired entity are remeasured to its acquisition-date fair
value and the resulting gain or loss, if any, is recognised in profit or loss.
Amounts arising from interests in the acquiree prior to the acquisition date
that have previously been recognised in other comprehensive income are
reclassified to the profit or loss, where such treatment would be appropriate
if that interest were disposed of.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. Control is achieved when
the Group:
• has the power over the entity;
• is exposed, or has rights, to variable return from its involvement
with the entity; and
• has the ability to use its power over the entity to affect its
returns.
The Group reassesses whether or not it controls an entity if facts and
circumstances indicate that there are changes to one or more of the
three elements of control listed above.
When the Group has less than a majority of the voting rights of an investee,
it considers that it has power over the investee when the voting rights are
sufficient to give it the practical ability to direct the relevant activities
of the investee unilaterally. The Group considers all relevant facts and
circumstances in assessing whether or not the Company's voting rights in an
investee are sufficient to give it power, including:
• the size of the Group's holding of voting rights relative to the
size and dispersion of holdings of the other vote holders;
• potential voting rights held by the Company, other vote holders or
other parties;
• rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that the
Group has, or does not have, the current ability to direct the relevant
activities at the time that decisions need to be made, including voting
patterns at previous shareholders' meetings.
Where the Group holds a currently exercisable call option, the rights arising
as a result of the exercise of the call option are included in the assessment
above of whether the Group has control.
The financial statements of subsidiaries are included in the consolidated
financial statements from the date on which control commences until the date
on which control ceases.
(iii) Non-controlling interests
NCI are measured initially at their proportionate share of the acquiree's
identifiable net assets at the date of the acquisition.
Changes in the Group's interest in a subsidiary that do not result in a loss
of control are accounted for as equity transactions.
(iv) Investments in associates and equity call options
An associate is an entity over which the Group has significant influence and
that is neither a subsidiary nor an interest in a joint venture. Significant
influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control over those
policies.
The considerations made in determining significant influence or joint control
are similar to those necessary to determine control over subsidiaries. In the
consolidated financial statements, the Group's investments in associates are
accounted for using the equity method of accounting.
Under the equity method, the investment in an associate or a joint venture is
carried in the consolidated balance sheet at cost plus post-acquisition
changes in the Group's share of the net assets of the associate. The Group's
share of the results of the associate is included in the profit or loss.
Losses of the associate or joint venture in excess of the Group's cost of the
investment are recognised as a liability only when the Group has incurred
obligations on behalf of the associate.
On acquisition of the investment, any difference between the cost of the
investment and share of the associate's identifiable assets and liabilities is
accounted for as follows:
• Any premium paid is capitalised and included in the carrying
amount of the associate.
• Any excess of the share of the net fair value of the associate's
identifiable assets and liabilities over the cost of the investment is
included as income in the determination of the share of the associate's profit
or loss in the period in which the investment is acquired.
Any intangibles identified and included as part of the investment are
amortised over their assumed useful economic life. Where there is objective
evidence that the investment in an associate may be impaired, the carrying
amount of the investment is tested for impairment in the same way as other
non-financial assets.
The aggregate of the Group's share of profit or loss of an associate is shown
on the face of profit or loss outside operating profit and represents profit
or loss before tax. The associated tax charge is disclosed in income tax.
The Group recognises its share of any changes in the equity of the associate
through the consolidated statement of changes in equity. Profits and losses
resulting from transactions between the Group and the associate are eliminated
to the extent of the Group's interest in the associate.
The Group applies equity accounting only up to the date an investment in
associate meets the criteria for classification as held for sale. From then
onwards, the investment is measured at the lower of its carrying amount and
fair value less costs to sell.
When potential voting rights or other derivatives containing potential voting
rights exist, the Group's interest in an associate is determined solely on the
basis of existing ownership interests and does not reflect the possible
exercise or conversion of potential voting rights and other derivative
instruments unless there is an existing ownership interest as a result of a
transaction that currently gives it access to the returns associated with an
ownership interest. In such circumstances, the proportion allocated to the
entity is determined by taking into account the eventual exercise of those
potential voting rights and other derivative instruments that currently give
the entity access to the returns. When instruments containing potential voting
rights in substance currently give access to the returns associated with an
ownership interest in an associate or a joint venture, the instruments are not
subject to IFRS 9 and equity accounting is applied. In all other cases,
instruments containing potential voting rights in an associate or a joint
venture are accounted for in accordance with IFRS 9.
A derivative financial asset is measured under fair value per IFRS 9. In the
case where there is significant influence over the investment under which
Playtech holds the derivative financial asset, it should be accounted for
under IAS 28 Investment in Associate. However, if the option is not currently
exercisable and there is no current access to profits, the option is fair
valued without applying equity accounting to the investment in associate.
Derivatives are recorded at fair value and classified as assets when their
fair value is positive and as liabilities when their fair value is negative.
Subsequently, derivatives are measured at fair value.
(v) Equity investments held at fair value
All equity investments in scope of IFRS 9 are measured at fair value in the
balance sheet. Fair value changes are recognised in profit or loss.
Fair value is based on quoted market prices (Level 1). Where this is not
possible, fair value is assessed based on alternative methods (Level 3).
(vi) Transactions eliminated on consolidation
Intra-group balances and transactions are eliminated. Unrealised gains arising
from transactions with equity-accounted investees are eliminated against the
investment to the extent of the Group's interest in the investee. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment.
B. Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated into the respective
functional currencies of Group companies at the exchange rates at the dates of
the transactions.
Monetary assets and liabilities denominated in foreign currencies are
translated into the functional currency at the exchange rate at the reporting
date. Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated into the functional currency at the exchange
rate when fair value was determined. Non-monetary items that are measured
based on historical cost in a foreign currency are translated at the exchange
rate at the date of the transaction. Foreign currency differences are
generally recognised in profit or loss and presented within finance costs.
(ii) Foreign operations
On consolidation, the assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on acquisition, are translated
into Euro using the exchange rates at the reporting date and profit or loss
items are translated into Euro at the end of each month at the average
exchange rate for the month which approximates the exchange rates at the date
of the transactions.
The exchange differences arising on the translation for consolidation are
recognised in other comprehensive income (OCI) and accumulated in the foreign
exchange reserve.
When a foreign operation is disposed of in its entirety, or partially such
that control, significant influence or joint control is lost, the cumulative
amount in the foreign exchange reserve relating to the foreign operation is
reclassified to the profit or loss as part of the gain or loss on disposal.
C. Discontinued operation
A discontinued operation is a component of the Group's business, the
operations and cash flows of which can be clearly distinguished from the rest
of the Group and which:
• represents a separate major line of business or geographical area
of operations;
• is part of a single co-ordinated plan to dispose of a separate
major line of business or geographical area of operations; or
• is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal
or when the operation meets the criteria to be classified as held for sale
(refer to Note 5K).
When an operation is classified as a discontinued operation, the comparative
statement of profit or loss and OCI is re-presented as if the operation had
been discontinued from the start of the comparative year.
D. Revenue recognition
The majority of the Group's revenue is derived from selling services with
revenue recognised when services have been delivered to the customer. Revenue
comprises the fair value of the consideration received or receivable for the
supply of services in the ordinary course of the Group's activities. Revenue
is recognised when economic benefits are expected to flow to the Group.
Specific criteria and performance obligations are described below for each of
the Group's material revenue streams.
Type of income Nature, timing of satisfaction of performance obligations and significant
payment terms
B2B licensee fee Licensee fee is the standard operator income of the Group which relates to
licensed technology and the provision of certain services provided via various
distribution channels (online, mobile or land-based interfaces).
Licensee fee is based on the underlying gaming revenue earned by our licensees
calculated using the contractual terms in place. Revenue is recognised when
performance obligation is met which is when the gaming transaction occurs and
is net of refunds, concessions and discounts provided to certain licensees.
The payment terms of the B2B licensee fee are on average 30 days from the
invoice date.
B2B fixed-fee income Fixed-fee income is the standard operator income of the Group which includes
revenue derived from the provision of certain services and licensed technology
for which charges are based on a fixed fee and/or stepped according to the
monthly usage of the service/technology. The usage measurement is typically
reset on a monthly basis.
The performance obligation is met and revenue is recognised once the
obligations under the contracts have been met which is when the services have
been provided.
Services provided and fees for:
a. minimum revenue guarantee: the additional revenue recognised by the
Group for the difference in the minimum guarantee per licensee contract and
actual performance; and
b. other: hosting, live, set-up, content delivery network and
maintenance fees. The fees charged to licensees for these services are fixed
per month.
The amounts for the above are recognised over the life of the contracts and
are typically charged on a fixed percentage and stepped according to the
monthly usage of the service depending on the type of service. Set-up fees are
recognised over the whole period of the contract, with an average period of 36
months. The revenue is recognised monthly over the period of the contract and
the payment terms of the B2B fixed fee income are on average 30 days from the
invoice date.
B2B cost-based revenue Cost-based revenue is the standard operator income of the Group which is made
up of the total revenue charged to the licensee based on the development costs
needed to satisfy the contract with the licensee.
The largest type of service included in cost-based revenue is the dedicated
team costs. Dedicated team employees are charged back to the client based on
time spent on each product.
Cost-based revenues are recognised on a monthly basis based on the contract in
place between each licensee and Playtech, and any additional services needed
on development are charged to the licensee upon delivery of the service. The
payment terms of the B2B cost-based revenue are on average 30 days from the
invoice date.
B2B revenue received from the sale of hardware Revenue received from the sale of hardware is the total revenue charged to
customers upon the sale of each hardware product. The performance obligation
is met and revenue is recognised on delivery of the hardware and acceptance by
the customer.
Revenue received from future sale of hardware is recognised as deferred
revenue. Once the obligation for the future sale is met, revenue is then
recognised in profit or loss. The payment terms of the B2B revenue received
from the sale of hardware are on average 30 days from the invoice date.
Additional B2B services fee This income is calculated based on the profit and/or net revenues generated by
the customer in return for the additional services provided to them by the
Group. This is typically charged on a monthly basis and is measured using a
predetermined percentage set in each licensee arrangement. The revenue is only
recognised when the customer's activities go live and the revenue from the
additional B2B services is recognised only once the Group is unconditionally
contractually entitled to it. The Directors have determined that this is when
the customer starts generating profits, which is later than when the customer
goes live with its B2C operations. The Directors' rationale is that there is
uncertainty that the Group will collect the consideration to which it is
entitled before the customer starts generating profits and, therefore, the
revenue is wholly variable. The payment terms of the additional B2B services
fees are on average 30 days from the invoice date.
B2C revenue In respect of B2C Snaitech revenues, the Group acts as principal with the end
customer, with specific revenue policies as follows:
• The revenues from land-based gaming machines are recognised net of
the winnings, jackpots and certain flat-rate gaming tax; revenues are
recognised at the time of the bet.
• The revenues from online gaming (games of skill/casino/bingo) are
recognised net of the winnings, jackpots, bonuses and certain flat-rate gaming
tax at the conclusion of the bet.
• The revenues related to the acceptance of fixed odds bets are
considered financial instruments under IFRS 9 and are recognised net of
certain flat-rate gaming tax, winnings, bonuses and the fair value of open
bets at the conclusion of the event.
• Poker revenues in the form of commission (i.e. rake) are
recognised at the conclusion of each poker hand. The performance obligation
is the provision of the poker games to the players.
• All the revenues from gaming machines are recorded net of players'
winnings and certain gaming taxes while the concession fees payable to the
regulator and the compensation of operators, franchisees and platform
providers are accounted as expenses. Revenue is recognised at the time of the
bet.
Where the gaming tax incurred is directly measured by reference to the
individual customer transaction and related to the stake (described as
"flat-rate tax" above), this is deducted from revenue.
Where the tax incurred is measured by reference to the Group's net result from
betting and gaming activity, this is not deducted from revenue and is
recognised as an expense.
In respect of Sun Bingo and B2C Sport revenue, the Group acts as principal
with the end customer, with revenue being recognised at the conclusion of the
event, net of winnings, jackpots and bonuses.
E. Share-based payments
Certain employees participate in the Group's share option plans. Following the
2012 LTIP employees are granted cash-settled options and equity-settled
options. The Remuneration Committee has the option to determine if the option
will be settled in cash or equity, a decision that is made at grant date. The
fair value of the equity-settled options granted is charged to profit or loss
on a straight-line basis over the vesting period and the credit is taken to
equity, based on the Group's estimate of shares that will eventually vest.
Fair value is determined by the Black-Scholes, Monte Carlo or binomial
valuation model, as appropriate. The cash-settled options are presented as a
liability. The liability is remeasured at each reporting date and settlement
date so that the ultimate liability equals the cash payment on settlement
date. Remeasurements of the fair value of the liability are recognised in
profit or loss.
The Group has also granted awards to be distributed from the Group's Employee
Benefit Trust. The fair value of these awards is based on the market price at
the date of the grant; some of the grants have performance conditions. The
performance conditions are for the Executive Management and include targets
based on growth in earnings per share and total shareholder return over a
specific period compared to other competitors. The fair value of the awards
with market performance conditions is factored into the overall fair value and
determined using a Monte Carlo method. Where these options lapse due to not
meeting market performance conditions the share option charge is not reversed.
F. Income tax
The income tax expense represents the sum of the tax currently payable and
deferred tax.
(i) Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in profit or loss because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the end of the reporting period.
A provision is recognised for those matters for which the tax determination is
uncertain, but it is considered probable that there will be a future outflow
of funds to a tax authority. The provisions are measured at the best estimate
of the amount expected to become payable. The assessment is based on the
judgement of tax professionals within the Company supported by previous
experience in respect of such activities and in certain cases based on
specialist tax advice.
(ii) Deferred tax
The Group adopted the amendments to IAS 12 issued in May 2023, which provide a
temporary mandatory exception from the requirement to recognise and disclose
deferred taxes arising from enacted tax law that implements the Pillar Two
model rules, including tax law that implements qualified domestic minimum
top-up taxes described in those rules. Under these amendments, any Pillar Two
taxes incurred by the Group has been accounted for as current taxes from 1
January 2024.
Deferred tax is provided using the liability method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences,
except:
• when the deferred tax liability arises from the initial
recognition of goodwill or an asset or liability in a transaction that is not
a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss, and does not give rise to
equal taxable and deductible temporary differences; and
• in respect of taxable temporary differences associated with
investments in subsidiaries, associates and interests in joint ventures, when
the timing of the reversal of the temporary differences can be controlled and
it is probable that the temporary differences will not reverse in the
foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences,
the carry forward of unused tax credits and any unused tax losses. Deferred
tax assets are recognised in the period in which the deductible temporary
differences arise when there are sufficient taxable temporary differences
relating to the same taxation authority and the same taxable entity which are
expected to reverse, or where it is probable that taxable profit will be
available against which a deductible temporary difference can be utilised.
Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax
losses, can be utilised, except:
• when the deferred tax asset relating to the deductible temporary
difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss,
and does not give rise to equal taxable and deductible temporary differences;
and
• in respect of deductible temporary differences associated with
investments in subsidiaries, associates and interests in joint ventures,
deferred tax assets are recognised only to the extent that it is probable that
the temporary differences will reverse in the foreseeable future and taxable
profit will be available against which the temporary differences can be
utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are reassessed at each
reporting date and are recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognised outside the profit or loss is
recognised outside profit or loss. Deferred tax items are recognised in
correlation to the underlying transaction either in OCI or directly in equity.
Tax benefits acquired as part of a business combination, but not satisfying
the criteria for separate recognition at that date, are recognised
subsequently, if new information about facts and circumstances change. The
adjustment is either treated as a reduction in goodwill (as long as it does
not exceed goodwill) if it was recognised during the measurement period or is
otherwise recognised in profit or loss. The Group recognises a deferred tax
liability for all taxable temporary differences associated with investments.
The Group offsets deferred tax assets and deferred tax liabilities, if and
only if, it has a legally enforceable right to set off current tax assets and
current tax liabilities and the deferred tax assets and deferred tax
liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities which intend
either to settle current tax liabilities and assets on a net basis, or to
realise the assets and settle the liabilities simultaneously, in each future
period in which significant amounts of deferred tax liabilities or assets are
expected to be settled or recovered.
The tax base of assets and liabilities is assessed at each reporting date, and
changes in the tax base that result from internal reorganisations, changes in
the expected manner of recovery or changes in tax law are reflected in the
calculation of deductible and taxable temporary differences.
G. Finance expense
Finance expense arising on interest-bearing financial instruments carried at
amortised cost is recognised in the profit or loss using the effective
interest rate method. Finance expense includes the amortisation of fees that
are an integral part of the effective finance cost of a financial instrument,
including issue costs, and the amortisation of any other differences between
the amount initially recognised and the redemption price. All finance expenses
are recognised over the availability period.
Interest expense arising on the above during the period is disclosed under the
financing activities in the consolidated statement of cash flows.
H. Inventories
Inventories are initially recognised at cost, and subsequently at the lower of
cost and net realisable value. Cost comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to their
present location and condition. The Group's inventories consist of hardware
that has been purchased but not sold before the year-end.
I. Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated
depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have
different useful lives, then they are accounted for as separate items
(major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is
recognised in profit or loss.
(ii) Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future
economic benefits associated with the expenditure will flow to the Group.
(iii) Depreciation
Depreciation is calculated to write off the cost of items of property, plant
and equipment less their estimated residual values using the straight-line
method over their estimated useful lives and is generally recognised in profit
or loss. Land is not depreciated.
The estimated useful lives of property, plant and equipment for current and
comparative periods are as follows:
%
Computers and gaming machines 14-33
Office furniture and equipment 7-33
Freehold and leasehold buildings and improvements 3-20, or over the length of the lease
Depreciation methods, useful lives and residual values are reviewed at each
reporting date and adjusted if appropriate.
J. Intangible assets and goodwill
(i) Recognition and measurement
Goodwill
Goodwill represents the excess of the cost of a business combination over the
Group's interest in the fair value of identifiable assets, liabilities and
contingent liabilities acquired. Cost comprises the fair value of assets
given, liabilities assumed and equity instruments issued, plus the amount of
any non-controlling interests in the acquiree plus, if the business
combination is achieved in stages, the fair value of the existing equity
interest in the acquiree. Direct costs of acquisition are recognised
immediately as an expense. Goodwill is capitalised as an intangible asset with
any impairment in carrying value being charged to profit or loss. Where the
fair value of identifiable assets, liabilities and contingent liabilities
exceed the fair value of consideration paid, the excess is credited in full to
the profit or loss on the acquisition date as a gain on bargain purchase.
Externally acquired intangible assets
Other intangible assets that are acquired by the Group and have finite useful
lives are measured at cost less accumulated amortisation and any accumulated
impairment losses.
Business combinations
Intangible assets are recognised on business combinations if they are
separable from the acquired entity or arise from other contractual/legal
rights. The amounts ascribed to such intangibles are arrived at by using
appropriate valuation techniques.
Internally generated intangible assets (development costs)
Development costs that are directly attributable to the design and testing of
identifiable and unique software products controlled by the Group are
recognised as intangible assets where the following criteria are met:
• it is technically feasible to complete the software so that it
will be available for use;
• management intends to complete the software and use or sell it;
• there is an ability to use or sell the software;
• it can be demonstrated how the software will generate probable
future economic benefits;
• adequate technical, financial and other resources to complete the
development and to use or sell the software are available; and
• the expenditure attributable to the software during its
development can be reliably measured.
The amount initially recognised for internally generated intangible assets is
the sum of the expenditure incurred from the date when the intangible asset
first meets the recognition criteria listed above. Expenditure includes
salaries, wages and other employee-related costs directly engaged in
generating the assets and any other expenditure that is directly attributable
to generating the assets (i.e. certifications and amortisation of right of use
assets). Where no internally generated intangible asset can be recognised,
development expenditure is recognised in profit or loss in the period in which
it is incurred.
(ii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future
economic benefits embodied in the specific asset to which it relates.
All other expenditures, including expenditures on internally generated
goodwill and brands, are recognised in the profit or loss as incurred.
(iii) Amortisation
Amortisation is calculated to write off the cost of intangible assets less
their estimated residual values using the straight-line method over their
estimated useful lives and is generally recognised in the profit or loss.
Goodwill is not amortised.
The estimated useful lives for current and comparative periods are as follows:
%
Domain names Indefinite
Internally generated capitalised development costs 20-33
Technology IP 13-33
Customer lists In line with projected cash flows or 7-20
Affiliate contracts 5-12.5
Patents and licences 10-33 or over the period of the licence
Amortisation methods, useful lives and residual values are reviewed at each
reporting date and adjusted if appropriate.
K. Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, are
classified as held for sale if it is highly probable that they will be
recovered primarily through sale rather than through continuing use.
The criteria for held for sale classification are regarded as met only when
the sale is highly probable, and the asset or disposal group is available for
immediate sale in its present condition. Actions required to complete the sale
should indicate that it is unlikely that significant changes to the sale will
be made or that the decision to sell will be withdrawn. Management must be
committed to the plan to sell the asset and the sale expected to be completed
within one year from the date of the classification.
Such assets, or disposal groups, are measured at the lower of their carrying
amount and fair value less costs to sell. Any impairment loss on a disposal
group is allocated first to goodwill, and then to the remaining assets on a
pro rata basis, except that no loss is allocated to inventories, financial
assets or deferred tax assets, which continue to be measured in accordance
with the Group's other accounting policies. Impairment losses on initial
classification as held for sale or held for distribution and subsequent gains
and losses on remeasurement are recognised in the profit or loss.
Once classified as held for sale, intangible assets and property, plant and
equipment are no longer amortised or depreciated.
L. Financial instruments
Initial recognition and subsequent measurement
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
(i) Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently
measured at amortised cost, fair value through other comprehensive income and
fair value through profit or loss.
The classification of financial assets at initial recognition depends on the
financial asset's contractual cash flow characteristics and the Group's
business model for managing them. With the exception of trade receivables that
do not contain a significant financing component or for which the Group has
applied the practical expedient, the Group initially measures a financial
asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in
four categories:
• financial assets at amortised cost (debt instruments);
• financial assets at fair value through other comprehensive income
with recycling of cumulative gains and losses (debt instruments);
• financial assets designated at fair value through other
comprehensive income with no recycling of cumulative gains and losses upon
derecognition (equity instruments); and
• financial assets at fair value through profit or loss.
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the
effective interest (EIR) method and are subject to impairment. Gains and
losses are recognised in profit or loss when the asset is derecognised,
modified or impaired. The Group's financial assets at amortised cost include
trade receivables, loans receivable and cash and cash equivalents.
At every reporting date, the Group evaluates whether the debt instrument is
considered to have low credit risk using all reasonable and supportable
information that is available without undue cost or effort. In making that
evaluation, the Group reassesses the internal credit rating of the debt
instrument. In addition, the Group considers whether there has been a
significant increase in credit risk depending on the characteristics of each
debt instrument.
Cash and cash equivalents consist of cash at bank and in hand, short-term
deposits with an original maturity of less than three months and customer
balances.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the
balance sheet at fair value with net changes in fair value recognised in
profit or loss. This category includes listed equity investments which the
Group has not irrevocably elected to classify at fair value through OCI.
The Group recognises a debt financial instrument with an embedded conversion
option, such as a loan convertible into ordinary shares of an entity, as a
financial asset in the balance sheet. On initial recognition, the convertible
loan is measured at fair value with any gain or loss arising on subsequent
measurement until conversion recognised in profit or loss. On conversion of a
convertible instrument, the Group derecognises the financial asset component
and recognises it as an investment (equity interest, associate, joint venture
or subsidiary) depending on the results of the assessment performed under the
relevant standards.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is primarily derecognised
(i.e. removed from the Group's consolidated balance sheet) when:
• the rights to receive cash flows from the asset have expired; or
• the Group has transferred its rights to receive cash flows from
the asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a "pass-through" arrangement,
and either (a) the Group has transferred substantially all the risks and
rewards of the asset; or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred
control of the asset.
When the Group has transferred its rights to receive cash flows from an asset,
it evaluates if, and to what extent, it has retained the risks and rewards of
ownership. When it has neither: transferred nor retained substantially all of
the risks and rewards of the asset, nor transferred control of the asset, the
Group continues to recognise the transferred asset to the extent of its
continuing involvement. In that case, the Group also recognises an associated
liability. The transferred asset and the associated liability are measured on
a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred
asset is measured at the lower of the original carrying amount of the asset
and the maximum amount of consideration that the Group could be required to
repay.
Impairment
The Group recognises an allowance for expected credit losses (ECLs) for all
debt instruments not held at fair value through profit or loss. ECLs are
based on the difference between the contractual cash flows due in accordance
with the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate. The
expected cash flows will include cash flows from the sale of collateral held
or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has
not been a significant increase in credit risk since initial recognition, ECLs
are provided for credit losses that result from default events that are
possible within the next 12 months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the
default (a lifetime ECL).
For trade receivables, the Group applies a simplified approach in calculating
ECLs. Therefore, the Group does not track changes in credit risk, but instead
recognises a loss allowance based on lifetime ECLs at each reporting date. The
Group has established a provision matrix that is based on its historical
credit loss experience, adjusted for forward-looking factors specific to the
debtors and the economic environment.
(ii) Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, loans and borrowings,
payables, or derivatives designated as hedging instruments in an effective
hedge, as appropriate. All financial liabilities are recognised initially at
fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs. The Group's financial liabilities
include trade and other payables, loans and borrowings including bank
overdrafts, and derivative financial instruments.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are classified
in two categories:
• financial liabilities at fair value through profit or loss; and
• financial liabilities at amortised cost (loans and borrowings and
bonds).
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial
liabilities held for trading and financial liabilities designated upon initial
recognition as at fair value through profit or loss.
Financial liabilities at amortised cost
This is the category most relevant to the Group. After initial recognition,
interest-bearing loans and borrowings are subsequently measured at amortised
cost using the effective interest rate (EIR) method. Gains and losses are
recognised in the profit or loss when the liabilities are derecognised as well
as through the EIR amortisation process. Amortised cost is calculated by
taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as
finance costs in profit or loss.
Derecognition
A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in profit or loss.
(iii) Offsetting
Financial assets and financial liabilities are offset and the net amount is
reported in the balance sheet if there is a currently enforceable legal right
to offset the recognised amounts and there is an intention to settle on a net
basis, to realise the assets and settle the liabilities simultaneously.
M. Share capital
Ordinary shares are classified as equity and are stated at the proceeds
received net of direct issue costs.
N. Share buyback
Consideration paid for the share buyback is recognised against the additional
paid in capital. Any excess of the consideration paid over the weighted
average price of shares in issue is debited to the retained earnings.
O. Employee Benefit Trust
Consideration paid/received for the purchase/sale of shares subsequently put
in the Employee Benefit Trust, which is controlled by the Company, is
recognised directly in equity. The cost of shares held is presented as a
separate reserve (the "Employee Benefit Trust reserve"). Any excess of the
consideration received on the sale of treasury shares over the weighted
average cost of the shares sold is credited to retained earnings.
P. Dividends
Dividends are recognised when they become legally due. In the case of interim
dividends to equity shareholders, this is when paid by the Company. In the
case of final dividends, this is when they are declared and approved by the
shareholders at the AGM.
Q. Impairment of non-financial assets
At each reporting date, the Group reviews the carrying amounts of its
non-financial assets (other than inventories and deferred tax assets) to
determine whether there is any indication of impairment. If any such
indication exists, then the asset's recoverable amount is estimated. For
goodwill in particular, the Group is required to test annually and also when
impairment indicators arise, whether goodwill and indefinite life assets have
suffered any impairment.
For impairment testing, assets are grouped together into the smallest group of
assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or CGUs. Goodwill arising from
a business combination is allocated to CGUs that are expected to benefit from
the synergies of the combination.
The recoverable amount of an asset or CGU is the greater of its value in use
and its fair value less costs of disposal. Value in use is based on the
estimated future cash flows, discounted to their present value using a
post-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU
exceeds its recoverable amount.
Impairment losses are recognised in the profit or loss. They are allocated
first to reduce the carrying amount of any goodwill allocated to the CGU, and
then to reduce the carrying amounts of the other assets in the CGU on a pro
rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets,
an impairment loss is reversed only to the extent that the asset's carrying
amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment loss had been
recognised.
R. Provisions
Provisions for legal claims are recognised when the Group has a present legal
or constructive obligation as a result of past events, it is probable that an
outflow of resources will be required to settle the obligation, and the amount
can be reliably estimated. Provisions are not recognised for future operating
losses.
Where there are a number of similar obligations, the likelihood that an
outflow will be required in settlement is determined by considering the class
of obligations as a whole. A provision is recognised even if the likelihood of
an outflow with respect to any one item included in the same class of
obligations may be minimum.
Provisions are measured at the present value of management's best estimate of
the expenditure required to settle the present obligation at the end of the
reporting period. The discount rate used to determine the present value is a
pre-tax rate that reflects current market assessments of the time value of
money and the risks specific to the liability.
S. Leases
At inception of a contract, the Group assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in
exchange for consideration.
Group as a
lessee
The Group applies a single recognition and measurement approach for all
leases, except for short-term leases and leases of low-value assets. The Group
recognises lease liabilities to make lease payments and right of use assets
representing the right to use the underlying assets.
(i) Right of use assets
The Group recognises right of use assets at the commencement date of the lease
(i.e. the date the underlying asset is available for use). Right of use assets
are measured at cost, less any accumulated amortisation and impairment losses,
and adjusted for any remeasurement of lease liabilities. The cost of right of
use assets includes the amount of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or before the commencement date
less any lease incentives received. Right of use assets are amortised on a
straight-line basis over the shorter of the lease term and the estimated
useful lives of the assets.
(ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease
term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by the Group and payments
of penalties for terminating the lease, if the lease term reflects the Group
exercising the option to terminate.
Variable lease payments that do not depend on an index or a rate are
recognised as expenses in the period in which the event or condition that
triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its
incremental borrowing rate at the lease commencement date because the interest
rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made.
In addition, the carrying amount of lease liabilities is remeasured if there
is a modification, a change in the lease term, a change in the lease payments
(e.g. changes to future payments resulting from a change in an index or rate
used to determine such lease payments) or a change in the assessment of an
option to purchase the underlying asset. When the lease liability is
remeasured in this way, a corresponding adjustment is made to the carrying
amount of the right of use asset or is recorded in the profit or loss if the
carrying amount of the right of use asset has been reduced to zero.
The cash payments made in relation to long-term leases are split between
principal and interest paid on lease liability and disclosed within financing
activities in the consolidated statement of cash flows.
(iii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term
leases (i.e. those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also applies the
lease of low-value assets recognition exemption to leases that are considered
to be low value. Lease payments on short-term leases and leases of low-value
assets are recognised as an expense on a straight-line basis over the lease
term and included within financing activities in the consolidated statement of
cash flows.
T. Fair value measurement
"Fair value" is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place
either: (a) in the principal market for the asset or liability; or (b) in the
absence of a principal market, in the most advantageous market for the asset
or liability.
The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data is available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in
the financial statements are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to
the fair value measurement as a whole:
• Level 1 - quoted (unadjusted) market prices in active markets for
identical assets or liabilities.
• Level 2 - valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly or
indirectly observable.
• Level 3 - valuation techniques for which the lowest level input
that is significant to the fair value measurement is unobservable.
U. Adjusted performance measures (APMs)
In the reporting of financial information, the Directors use various APMs. The
Directors use the APMs to understand, manage and evaluate the business and
make operating decisions. These APMs are among the primary factors management
uses in planning for and forecasting future periods.
As these are non-GAAP measures, they should not be considered as replacements
for IFRS measures. The Group's definition of these non-GAAP measures may not
be comparable to other similarly titled measures reported by other companies.
The following are the definitions and purposes of the APMs used:
APM Closest equivalent IFRS measure Reconciling items to Definition and purpose
statutory measure
Adjusted EBITDA and Adjusted Profit Operating profit and Profit before tax Note 10 Adjusted results exclude the following items:
• Material non-cash items: these items are excluded to better
analyse the underlying cash transactions of the business as management
regularly monitors the operating cash conversion to Adjusted EBITDA.
• Material one-off items: these items are excluded to get normalised
results that are not distorted by unusual or infrequent items. Unusual items
include highly abnormal, one-off and only incidentally relating to the
ordinary activities of the Group. Infrequent items are those which are not
reasonably expected to recur in the foreseeable future given the environment
in which the Group operates.
• Investment/acquisition-related items: these items are excluded as
they are not related to the ordinary activities of the business and therefore
are not considered to be ongoing costs of the operations of the business.
These APMs provide a consistent measure of the performance of the Group from
period to period by removing items that are considered to be either non-cash,
one-off or investment/acquisition related items. This is a key management
incentive metric.
Adjusted gross cash and cash equivalents Cash and cash equivalents Chief Financial Officer's statement Adjusted gross cash and cash equivalents is defined as the cash and cash
equivalents after deducting the cash balances held on behalf of operators in
respect of operators' jackpot games and poker and casino operations as well as
client funds with respect to B2C.
Net debt None Chief Financial Officer's statement Net debt is defined as the Adjusted gross cash and cash equivalents after
deducting loans and borrowings and bonds. Used to show level of net debt in
the Group and movement from period to period.
Adjusted net cash provided by operating activities Net cash provided by operating activities Chief Financial Officer's statement Net cash provided by operating activities after adjusting for jackpots and
client funds, professional fees and ADM (Italian regulator) security deposit.
Adjusting for the above cash fluctuations is essential in order to truly
reflect the quality of revenue and cash collection. This is because the timing
of cash inflows and outflows for jackpots, security deposits and client funds
only impact the reported operating cash flow and not Adjusted EBITDA, while
professional fees are excluded from Adjusted EBITDA but impact operating cash
flow.
Cash conversion None Chief Financial Officer's statement Cash conversion is defined as cash generated from operations as a percentage
of Adjusted EBITDA.
Adjusted cash conversion None Chief Financial Officer's statement Adjusted cash conversion is defined as Adjusted net cash provided by operating
activities as a percentage of Adjusted EBITDA.
Adjusted EPS EPS Note 14 The calculation of Adjusted EPS is based on the Adjusted Profit and weighted
average number of ordinary shares outstanding.
Adjusted diluted EPS Diluted EPS Note 14 The calculation of Adjusted diluted EPS is based on the Adjusted Profit and
weighted average number of ordinary shares outstanding after adjusting for the
effects of all dilutive potential ordinary shares.
Adjusted tax Tax expense Note 10 Adjusted tax is defined as the tax charge for the period after deducting tax
charges related to uncertain tax positions relating to prior years, deferred
tax on acquisition and the write down of deferred tax assets in respect of tax
losses arising in prior years. As these items either do not relate to the
current year or are adjusted in arriving at the Adjusted Profit, they distort
the effective tax rate for the period.
V. Onerous contracts
Present obligations arising under onerous contracts are recognised and
measured as provisions. An onerous contract is considered to exist where the
Group has a contract under which the unavoidable costs of meeting the
obligations under the contract exceed the economic benefits expected to be
received under it.
Note 6 - Significant accounting judgements, estimates and assumptions
In preparing these consolidated financial statements, management has made
judgements and estimates that affect the application of the Group's accounting
policies and the reported amounts of assets, liabilities, income and expenses.
Actual events may differ from these estimates.
Judgements
In the process of applying the Group's accounting policies management has made
the following judgements, which have the most significant effect on the
amounts recognised in the consolidated financial statements.
Caliplay - impact of dispute and revised strategic agreement
Background
Following the announcement made on 16 September 2024 on the revised Tecnologia
en Entretenimiento Caliplay, S.A.P.I. ("Caliplay") agreement, the following
legal proceedings were on an agreed standstill as at 31 December 2024 and will
be dismissed in full once the revised arrangements come into effect:
· As per the public announcement released by Playtech on 6 February
2023, the Group, through its subsidiary, PT Services
Malta Limited ("PT Malta"), was seeking a declaration from the English Courts
to obtain clarification on a point of
disagreement between Caliplay and PT Malta in relation to the Caliente Call
Option. The Caliente Call Option is an option
held by Caliplay whereby, for 45 days after the finalisation of Caliplay's
2021 accounts, Caliplay could redeem PT Malta's
additional B2B services fee or (if the Playtech Call Option had been exercised
at that time) Caliente would have the option
to acquire PT Malta's 49% stake in Caliplay. The Group believes the Caliente
Call Option has expired and first referred to
its expiry having taken place in its interim report for the six-month period
ended 30 June 2022, which was published on 22
September 2022. The Group has not changed its position with regards to expiry.
If the Caliente Call Option was declared as being exercisable and
was exercised, this would extinguish the Playtech Call Option and the Playtech
M&A Call Option (refer to Note 19A for details on these
option arrangements).
· From H2 2023 the dispute with Caliplay also included litigation
in relation to the B2B licensee fees and additional B2B
services fees owed by Caliplay to Playtech under the terms of the Group's
licence agreement. The dispute related to
amounts that date back to July 2023. The details of this dispute are further
explained in Note 7 of the Group's audited
financial statements for the year ended 31 December 2023.
Revised strategic agreement with Caliplay
Under the amended terms, Playtech will:
· Hold a 30.8% equity interest in Caliente Interactive, Inc.
("Cali Interactive"), which will be the new holding company of Caliplay (the
"Caliplay Group"), incorporated in the United States;
· Be entitled to receive dividends alongside other shareholders in
Cali Interactive. Playtech will also have the right to appoint a Director to
the Board of Cali Interactive;
· Enter into a revised eight-year B2B software licence and services
agreement; and
· Receive from Cali Interactive an additional US$140.0 million paid
in cash, phased over a four-year period
The revised arrangements are conditional upon Mexican antitrust approval. On
21 March 2025, the Group announced that all necessary approvals have been
received, and completion of the revised arrangements is scheduled to take
place on 31 March 2025.
Impact on revenue recognition and recovery of receivable
At 31 December 2023, the outstanding amount of the B2B licensee fee was
€32.3 million and the outstanding amount of the
additional B2B services fee was €54.2 million. The Group recognised the full
outstanding amount of €86.5 million within its total
revenue for the year ended 31 December 2023 and in line with its revenue
recognition policies. In recognising the entire amount,
the Group assessed that it was highly probable that there will not be a
significant reversal of this revenue in a subsequent period.
Following the entering into of the revised strategic agreement on 15 September
2024, Caliplay resumed paying Playtech its
fees, which included a settlement of the entirety of the amount outstanding at
31 December 2023, a significant portion of the outstanding receivable relating
to 2024 performance prior to the agreement, with a balance due also being paid
into an escrow account and to be released to Playtech on completion of the
revised arrangements. In 2024, the Group continued to recognise revenue from
Caliplay in line with its current license agreement and revenue recognition
polices. As a result of this, the Group released €0.7 million from
expected credit losses related to trade receivables as of 31 December 2024.
Finally, the settlement included late payment fees of €7.1 million which
have been recognised within interest income.
Revenue from contracts with customers
The Group applies judgement in determining whether it is acting as a principal
or an agent specifically on the revenue earned under the B2B licensee fee
stream. This income falls within the scope of IFRS 15 Revenue from Contracts
with Customers. In making these judgements, the Group considers, by examining
each contract with its customers, which party has the primary responsibility
for providing the services and is exposed to the majority of the risks and
rewards associated with providing the services, as well as if it has latitude
in establishing prices, either directly or indirectly. The business model of
this division is predominantly a revenue share model which is based on
software fees earned from B2C business partners' revenue.
IFRS 15, paragraph B37 describes indicators that an entity controls the
specified good or service before it is transferred to a customer and therefore
acts as the principal. Based on this assessment it was concluded that Playtech
is acting as an agent under the B2B licensee fee stream due to the three
indicators under B37 which are not satisfied as follows:
• Playtech is responsible in fulfilling the contract to the
operator, principally in respect of the software solutions, and not to the end
customer which is the responsibility of the operator;
• there is no inventory risk as Playtech does not have the ability
to direct the use of, and obtain substantially all of the remaining benefits
from, the good or service before it is transferred to the end customer; and
• Playtech does not have any discretion in establishing prices set
by the operator to third parties.
Based on the above it was determined that the Group was acting as agent and
revenue is recognised as the net amount of B2B licensee fees received. The
majority of this B2B revenue is recognised when the gaming or betting activity
used as the basis for the revenue share calculation takes place, and
furthermore is only recognised when collection is virtually certain with a
legally enforceable right to collect.
The Group applied judgement in determining whether price concessions in
respect of ongoing negotiations and contract modifications should be accounted
for as variable consideration in revenue. Once there is a valid expectation
that the concession of the variable consideration is highly probable, the
Group accounts for it under IFRS 15 paragraph 52.
IFRS 15, paragraph 52 describes that in addition to the terms of the contract,
the promised consideration is variable if either of the following
circumstances exists:
• The operator has a valid expectation arising from Playtech's
customary business practices, published policies or specific statements that
Playtech will accept an amount of consideration that is less than the price
stated in the contract, that is, it is expected that Playtech will offer a
price concession. Depending on the jurisdiction, industry or customer this
offer may be referred to as a discount, rebate, refund or credit.
• Other facts and circumstances indicate that Playtech's intention,
when entering into the contract with the operator, is to offer a price
concession to the operator.
The Group has estimated the variable consideration based on the best estimates
of future outcomes to determine the most likely amount of consideration to be
received.
Internally generated intangible assets
The Group capitalises costs for product development projects. Expenditure on
internally developed products is capitalised when it meets the following
criteria:
• adequate resources are available to complete and sell the product;
• the Group is able to sell the product;
• sale of the product will generate future economic benefits; and
• expenditure on the project can be measured reliably.
Initial capitalisation of cost is based on management's judgement that the
technological and economic feasibility is confirmed, usually when product
development has reached a defined milestone and future economic benefits are
expected to be realised according to an established project management model.
Following capitalisation, an assessment is performed in regard to project
recoverability which is based on the actual return of the project. During the
year, the Group capitalised €48.8 million for continuing and discontinued
operation (2023: €56.7 million continuing and discontinued operations) and
the carrying amount of capitalised development costs as at 31 December 2024
was €111.9 million for continuing operations (2023: €133.5 million
including held for sale).
Adjusted performance measures
As noted in Note 5, paragraph U, the Group presents adjusted performance
measures which differ from statutory measures due to exclusion of certain
non-cash and one-off items from the actual results. The determination of
whether these items should form part of the adjusted results is a matter of
judgement as management assess whether these items meet the definition
disclosed in Note 5 paragraph U. The items excluded from the adjusted measures
are described in further detail in Note 10.
Provision for risks and charges and potential liabilities
The Group operates in a number of regulated markets and is subject to lawsuits
and potential lawsuits regarding complex legal matters, which are subject to a
different degree of uncertainty in different jurisdictions and under different
laws. For all material ongoing and potential legal and regulatory claims
against the Group, an assessment is performed to consider whether an
obligation or possible obligation exists and to determine the probability of
any potential outflow to determine whether a claim results in the recognition
of a provision or disclosure of a contingent liability. The timing of payment
of provisions is subject to uncertainty and may have an effect on the
presentation of the provisions as current and non-current liabilities in the
balance sheet. Expected timing of payment and classification of provision is
determined by management based on the latest information available at the
reporting date. See Note 28 for further details.
Classification of equity call options
Background
In addition to the provision of software-related solutions as a B2B product,
the Group also offers certain customers a form of offering (which includes
software and related services) which is termed a "structured agreement".
Structured agreements are customarily with customers that have a gaming
licence and are retail/land-based operators that are looking to establish
their online B2C businesses - these customers require initial support beyond
the provision of the Group's standard B2B software technology. With this
product offering, Playtech offers additional services to support the
customer's B2C activities over and above the B2B software solution products.
Playtech generates revenues from the structured agreements as follows:
• B2B licensee fee income (as per Note 5D); and
• revenue based on predefined revenue generated by each customer
under each structured agreement which is typically capped at a percentage of
the profit (also defined in each agreement) generated by the customer, which
compensates Playtech for the additional services provided (additional B2B
services fee as per Note 5D).
Under these agreements, Playtech typically has a call option to acquire equity
in the operating entities. If the call option is exercised by Playtech, the
Group would no longer provide certain services (which generally include
technical and general strategic support services) and would no longer receive
the related additional B2B services fee. This mechanism is not designed as a
control feature but mainly to protect Playtech's position should the customer
be subject to an exit transaction. Playtech is therefore able to benefit from
any value appreciation in the operation and could also potentially cease to
provide the additional B2B services should it choose to do so dependent on the
nature of the exit transaction.
Judgement applied
In respect of each of the structured agreements where the Group holds equity
call options, management applies judgement to assess whether the Group has
control or significant influence. For each of the Group's structured
agreements an assessment was completed in Note 19 using the below guidance.
The existence of control by an entity is evidenced if all of the below are met
in accordance with IFRS 10 Consolidated Financial Statements, paragraph 7:
• power over the investee;
• exposure, or rights, to variable returns from its involvement with
the investee; and
• the ability to use its power over the investee to affect the
amount of the investor's returns.
In the cases where the Group assessed that it exercises control over these
arrangements, then the company is consolidated in the Group's annual results
in accordance with IFRS 10.
The existence of significant influence by an entity is usually evidenced in
one or more of the following ways in accordance with IAS 28 Investment in
Associates and Joint Ventures, paragraph 6:
• representation on the board of directors or equivalent governing
body of the investee;
• participation in policy-making processes, including participation
in decisions about dividends or other distributions;
• material transactions between the entity and its investee;
• interchange of managerial personnel; or
• provision of essential technical information.
If the conclusion is that the Group has significant influence, the next
consideration made is whether there is current access to net profits and
losses of the underlying associate. This is determined by the exercise
conditions of each relevant equity call option and in particular whether the
options are exercisable at the end of each reporting period.
If the option is exercisable then the investment is accounted for using the
equity accounting method. However, in the cases where the company over which
the Group has a current exercisable option generates profits, management made
a judgement and concluded that Playtech's share of profits (were the option to
be exercised) should not be recognised as it is unlikely that the profits will
be realised as the existing shareholder has the right, and is entitled, to
extract distributable profits. As such, management did not consider it
appropriate to recognise any share of these profits. However, in the cases
where the associate has generated losses, the Group's percentage share is
recognised and deducted from the carrying value of the investment in
associate.
Management has made a further judgement that if the equity call option is not
exercisable at the end of the reporting period, then the option is recorded at
fair value as per IAS 28, paragraph 14 and recognised as a derivative
financial asset as per IFRS 9 Financial Instruments.
Furthermore, under some of these arrangements the Group has provided loan
advances. In such instances a judgement was made as to whether these amounts
form part of the Group's investment in the associate as per IAS 28, paragraph
38, with a key consideration being whether the Group expects settlement to
occur in the foreseeable future. In the case where this is not expected and
there is no set repayment term, then it is concluded that in substance these
loans are extensions of the entity's investment in the associate and therefore
would form part of the cost of the investment.
Finally, the Group has certain agreements in relation to the provision of
services by service providers in connection with certain of the Group's
obligations under their various structured agreements. Under these
arrangements, the service providers have certain rights to equity. In order
for these rights to crystallise, the Group must first exercise the relevant
option. A judgement was therefore made that no current liability exists under
IAS 32, until the point when Playtech exercises the option.
Classification of assets as held for sale and discontinued operations
In applying the principles of asset held for sale and discontinued operations
under IFRS 5, a significant degree of judgement is required.
In order for an asset to be classified as held for sale, it must be available
for immediate sale in its present condition and its sale must be highly
probable at the reporting date. The meaning of 'highly probable' is highly
judgmental and therefore IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations sets out criteria for the sale to be considered as a
highly probable as follows:
• Management must be committed to a plan to sell the asset;
• An active program to find a buyer must be initiated;
• The asset must be actively marketed for sale at a price that is reasonable
to its current fair value;
• The sale must be completed within one year from the date of
classification;
• Significant changes to be made to the plan must be unlikely.
Similarly, in order for a relevant operation of assets held for sale to also
be shown in discontinued operations, judgements will need to be made to assess
whether the operation is a component of the Group's business for which the
operations and cash flows can be clearly distinguished from the rest of the
Group and which:
• represents a separate major line of business or geographical
area of operations;
• is part of a single co-ordinated plan to dispose of a separate
major line of business or geographical area of operations; or
• is a subsidiary acquired exclusively with a view to resale.
Snaitech CGU
An announcement was made on 17 September 2024 that Playtech Services (Cyprus)
Limited, a subsidiary of the Group, has
entered into a definitive agreement for the sale of Snaitech B2C segment
(through a sale of its immediate parent company) to
Flutter Entertainment Holdings Ireland Limited, a subsidiary of Flutter
Entertainment plc ("Flutter"), for a total enterprise value of
€2,300 million in cash. Completion of the sale, which is subject to certain
conditions including relevant antitrust, gaming and other
regulatory authority approvals, is currently expected by Q2 2025. All the
above criteria for held for sale and discontinued operations were met at the
point of the announcement. Therefore, the Snaitech B2C segment has been
presented as an asset held for sale and the results of the Snaitech B2C
segment are included in discontinued operations, in a single line in the
statement of comprehensive income.
HAPPYBET
During 2024 and following the announcement in relation to the Snaitech sale as
outline above, the Group decided to also sell the Happybet business. This was
for various reasons, including the fact that it has been loss making since
initial acquisition, it uses the intellectual property of Snaitech, and the
Snaitech management team overseeing the Happybet operations, will no longer be
with the Group once the Snaitech sale completes. By the end of 2024, the
Austrian side of the Happybet business was shut down, and the Group commenced
the sales process for the rest of the business. Therefore, in applying the
above criteria, it was determined that the assets relating to the Happybet
business meet the definition of an asset held for sale at 31 December 2024. In
making an assessment as to the lower of carrying amount and fair value less
costs to sell, an impairment of €5.1 million was recorded. With respect to
the classification as discontinued operations, Happybet does not meet the
criteria as its operations are not considered a separate line of business of
the Group.
Recognition of Playtech incentive arrangements
Part of the proceeds from the expected disposal of the Snaitech CGU have been
allocated as bonuses to Playtech's ongoing senior team to be used as a
retention tool. The total amount of €100 million plus social security costs
will be paid 60% on completion of the disposal and the payment of dividends,
with the other 20% and 20% paid 12 and 24 months respectively post the
completion of the transaction. Since this amount is funded from the Snaitech
disposal, and payable over a definitive 3-year period, it is not included in
Adjusted EBITDA. The communication sent out to the senior team in relation to
this bonus pre year end created a constructive obligation linked to IAS 19
Employee Benefits, paragraph 19 where a benefit is expected to be settled by
virtue of the certainty the Group had that the transaction will complete. The
bonus has therefore been accrued from the point the constructive obligation
was created in 2024 to the point of expected payment post completion.
Exercise of option in LSports
In September 2024, the Group exercised its option in LSports, acquiring an
additional 18%. Following the exercise of the option, the new shareholding is
49%, making the Group the largest shareholder in LSports. Under IFRS 10,
paragraph 7, the Group does not have control over the investee by holding 49%
because the remaining 51% shareholders form a consortium by virtue of being
related, a position which has also been supported through a legal confirmation
from LSports.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, which have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below. The Group based its assumptions
and estimates on parameters available when the consolidated financial
statements were prepared. Existing circumstances and assumptions about future
developments may change due to market changes or circumstances arising that
are beyond the control of the Group. Such changes are reflected in the
assumptions when they occur.
Impairment of non-financial assets
Cash-generating units
Impairment exists when the carrying value of an asset or cash-generating unit
(CGU) exceeds its recoverable amount, which is the higher of its fair value
less costs to sell and its value in use. The value in use calculation is based
on a discounted cash flow model (DCF). The cash flows are derived from the
three-year budget, with CGU-specific assumptions for the subsequent two years.
They do not include restructuring activities that the Group is not yet
committed to or significant future investments that may enhance the
performance of the assets of the CGU being tested. The recoverable amount is
sensitive to the discount rate used for the DCF model as well as the expected
future cash inflows and the growth rates used in years four and five and for
extrapolation purposes. These estimates are most relevant to goodwill and
other intangibles with indefinite useful lives recognised by the Group. The
key assumptions used to determine the recoverable amount of the different CGUs
are disclosed and further explained in Note 18, including a sensitivity
analysis for the CGUs that have lower headroom.
Investment in associates
In assessing impairment of investments in associates, management utilises
various assumptions and estimates that include projections of future cash
flows generated by the associate, determination of appropriate discount rates
reflecting the risks associated with the investment, and consideration of
market conditions relevant to the investee's industry. The Group exercises
judgement in evaluating impairment indicators and determining the amount of
impairment loss, if any. This involves assessing the recoverable amount of the
investment based on available information and making decisions regarding the
appropriateness of key assumptions used in impairment testing.
Income taxes
The Group is subject to income tax in several jurisdictions and significant
judgement is required in determining the provision for income taxes. During
the ordinary course of business, there are transactions and calculations for
which the ultimate tax determination is uncertain. As a result, the Group
recognises tax liabilities based on estimates of whether additional taxes and
interest will be due. These tax liabilities are recognised when, despite the
Group's belief that its tax return positions are supportable, the Group
believes it is more likely than not that a taxation authority would not accept
its filing position. In these cases, the Group records its tax balances based
on either the most likely amount or the expected value, which weights multiple
potential scenarios. The Group believes that its accruals for tax liabilities
are adequate for all open audit years based on its assessment of many factors
including past experience and interpretations of tax law. This assessment
relies on estimates and assumptions and may involve a series of complex
judgements about future events. To the extent that the final tax outcome of
these matters is different than the amounts recorded, such differences will
impact income tax expense in the period in which such determination is made.
Where management conclude that it is not probable that the taxation authority
will accept an uncertain tax treatment, they calculate the effect of
uncertainty in determining the related taxable profit (tax loss), tax bases,
unused tax losses, unused tax credits or tax rates. The effect of uncertainty
for each uncertain tax treatment is reflected by using the expected value -
the sum of the probabilities and the weighted amounts in a range of possible
outcomes. More details are included in Note 13.
Deferred tax asset
In evaluating the Group's ability to recover our deferred tax assets in the
jurisdiction from which they arise, management considers all available
positive and negative evidence, projected future taxable income, tax-planning
strategies and results of recent operations. Deferred tax asset is recognised
to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised. Judgement is required
in determining the initial recognition and the subsequent carrying value of
the deferred tax asset. Deferred tax asset is only able to be recognised to
the extent that utilisation is considered probable. It is possible that a
change in profit forecasts or risk factors could result in a material change
to the income tax expense and deferred tax asset in future periods.
Deferred tax asset in the UK
As a result of the Group's internal restructuring in January 2021, the Group
is entitled to UK tax deductions in respect of certain goodwill and intangible
assets. A deferred tax asset was recognised as the tax base of the goodwill
and intangible assets is in excess of the book value base of those assets. At
the beginning of the period, the net recognised deferred tax asset amounted to
€36.8million. During the period, the Group released €36.8 million of this
deferred tax asset as expected utilisation would fall outside the forecasting
period and therefore there is not sufficient certainty that the Group would be
able to generate taxable profits. At 31 December 2024 , the deferred tax
asset recognised in respect of future tax deductions for goodwill and
intangible assets is €Nil. A total of €57.0 million of deferred tax asset
has not been recognised in respect of the benefit of future tax deductions
related to the goodwill and intangible assets as there is not sufficient
certainty of utilisation.
Deferred tax assets are reviewed at each reporting date. In considering their
recoverability, the Group assesses the likelihood of their being recovered
within a reasonably foreseeable timeframe, which is broadly in line with our
viability assessment and the cash
flow forecasts period used in our CGU impairment assessment. The Group updated
its forecasts, following changes in assumptions
made to the forecasts during 2024, due to certain changes in the current
period to the expected profit profile within its UK business
unit that carries significant losses. This included the impact of the revised
arrangements with Caliplay (Note 6) and expected reductions in revenue from
other sports licensees, which together also led to the full impairment of the
Sports B2B CGU (Note 18) in the current year. Furthermore, the recognition and
settlement of the Playtech incentive arrangements as outlined above is also
expected to increase the taxable losses in the UK. This forms a change in
accounting estimate and resulted in a reversal of €33.0 million in the
current year of previously recognised deferred tax assets in respect of UK tax
losses brought forward and excess interest expense.
As at 31 December 2024, there is a deferred tax asset of €2.6 million in
respect of UK tax losses and excess interest expense (2023: €35.6 million).
Based on the current forecasts, these losses will be fully utilised over the
forecast period.
Remaining UK tax losses and excess interest expense have not been provided for
representing an unrecognised deferred tax asset of €141.2 million (2023:
€40.3 million) as at 31 December 2024 as expected utilisation would fall
outside the forecasting period and therefore there is not sufficient certainty
they will be recovered.
Any future changes in the tax law or the structure of the Group could have a
significant effect on the use of the tax deductions,
including the period over which the deductions can be utilised.
Deferred tax assets in Italy
The Group has utilised its tax losses in Italy and therefore has €Nil
deferred tax asset as at 31 December 2024 (2023: €2.1
million) in respect of tax losses in Italy.
Impairment of financial assets
The Group undertook a review of trade receivables and other financial assets,
as applicable, and their expected credit losses (ECLs). The review considered
the macroeconomic outlook, customer credit quality, exposure at default, and
effect of payment deferral options as at the reporting date. The ECL
methodology and definition of default remained consistent with prior periods.
The model inputs, including forward-looking information, scenarios and
associated weightings, together with the determination of the staging of
exposures, were revised. The Group's financial assets consist of trade and
loans receivables and cash and cash equivalents. ECL on cash balances was
considered and calculated by reference to Moody's credit ratings for each
financial institution, while ECL on trade and loans receivables was based on
past default experience and an assessment of the future economic environment.
More details are included in Note 35.
The contracts relating to two Asia distributors were terminated in 2024 in
conjunction with Playtech entering into an agreement in September 2024 with a
new distributor in Asia for a period of 5 years. With respect to the two
terminated contracts an additional provision was made in the year ended 31
December 2024 against receivables of €12.4 million (2023: €3.4 million).
The provision is part of €10.6 million of impairment of financial assets in
the statement of comprehensive income as at 31 December 2024.The total
provision at 31 December 2024 is €38.7 million, which represents a 100%
provision of all unpaid balances at year end.
Under the termination agreements, a total amount of €24.0 million is
payable by the Group, of which €10.2 million was paid in 2024 and the
remaining amount payable by 31 December 2025. Management concluded that since
the payments are not in relation to Playtech's performance under the
contract's pre-termination, they represented a separate transaction and as
such disclosed an expense rather than taking a reduction against revenue.
Furthermore, some of the termination payments to be made in 2025 relate to a
non-compete period to 31 December 2025, and therefore would ordinarily be
capitalised as an intangible and amortised over the period. However, a
judgement was made that both the length and enforceability of the non-compete
clause does not meet the high threshold of asset recognition and as such
expensed the full amount in 2024. As per Note 10, these costs are not
considered an ongoing cost of operations and have therefore been excluded from
Adjusted EBITDA.
Sun Bingo agreement
Background
The News UK contract commenced in 2016 and was originally set for a five-year
period to June 2021. Both parties have obligations under the contract, which
includes News UK providing access to brand and related materials as well as
other services. Playtech has the primary responsibility for the operation of
the arrangement, but both parties have contractual responsibilities.
The related brands are used in Playtech's B2C service, where the Group acts as
the principal, meaning that in the Group's consolidated statement of
comprehensive income:
• revenue from B2C customers is recognised as income; and
• the fees paid to News UK for use of the brands are an expense as
they are effectively a supplier.
In the original contract, the fees payable were subject to a predetermined
annual minimum guarantee (MG) which Playtech had to pay to News UK.
During the period from 2016 to 2018, performance was not in line with
expectations, and as such, the MG made this operation significantly
loss-making for the Group. This opened the negotiations with News UK for
certain amendments to the contract, which were agreed and signed in February
2019 as follows:
• the MG was still payable up until the end of the original contract
period, being June 2021, with no MG payable after that; and
• the contract term was extended to permit Playtech access to News
UK's brands and other related materials and other services, for a longer
period, to allow Playtech to recover its MG payments and to make a commercial
return as was always envisaged. The term of the contract was extended to end
at the earlier of: a) five years from the date when Playtech had fully
recovered all MG payments made; or b) 15 years from the renegotiation (i.e.
June 2036).
Judgements made on recognition and measurement
The annual MG paid to News UK was recognised in Playtech's profit or loss up
until February 2019, essentially being expensed over the original term of the
contract. However, from the point at which the amended contract became
effective, the timing of the MG paid (being based on the original terms) no
longer reflected the period over which Playtech was consuming the use of the
News UK brands and other related services from them. As such, a prepayment was
recorded to reflect the amount that had been paid, as at each period end,
which related to the future use of the brands and services. IFRS do not have a
specific standard that deals with accounting for prepayments; however, the
asset recognised as a prepayment is in accordance with IAS 1 Presentation of
Financial Statements.
At the commencement of the agreement and on renegotiation of the contract, the
Directors considered whether the nature of the arrangement gave rise to any
intangible assets. At contract inception the Directors concluded that there
were no such assets to recognise as both parties had contractual obligations
under the agreement to deliver services, as explained above. Post the contract
renegotiation, the amounts to be paid in the remainder of the initial period
were considered to be advanced payments in respect of amounts to be earned by
News UK over the remainder of the extended contract period. Consequently, the
Directors did not believe that there was a fundamental change in the nature of
the arrangements and it was considered most appropriate to categorise the
amounts paid as operating expense prepayments.
As noted above, the term of this renegotiated contract is dependent on the
future profitability of the contract, and it was expected that the future
profitability would mean the contract would finish before the end of the fixed
term period. For this reason, it was considered appropriate that the
prepayment recognised should be released to the profit or loss in line with
this expected profitability, rather than on a straight-line basis.
The amounts held in non-current and current assets of €56.2 million (2023:
€58.7 million) and €4.5 million (2023: €4.4 million) in Notes 20 and 22,
respectively, are the differences between the MG actually paid to News UK from
February 2019 to June 2021 and the amounts recognised in the Group's profit or
loss from February 2019 to December 2024.
As with any budgeting process, there is always a risk that the plan may not be
realised. This risk increases the longer the period for which the budget
covers and in this instance the period is potentially up to 12 years from 31
December 2024. When producing the budget, management applies reasonable
assumptions based on known factors, but sometimes and outside of management's
control, these factors may vary. However, management also reviews these
forecasts at each reporting period and more regularly internally and adjusts
the expense released accordingly. Based on the most recent forecasts and
current profitability and the fact that the Group had been running the
operation since 2016 and therefore has significant experience of the level of
profitability that can be derived from the operation, it is confident that the
performance of the business will allow the full recovery of this asset, before
the contract ends.
Calculation of legal provisions
The Group ascertains a liability in the presence of legal disputes or ongoing
lawsuits when it believes it is probable that a financial outlay will take
place and when the amount of the losses can be reasonably estimated. The Group
is subject to lawsuits regarding complex legal problems, which are subject to
a differing degree of uncertainty (also due to a complex legislative
framework), including the facts and the circumstances inherent to each case,
the jurisdiction and the different laws applicable. Given the uncertainties
inherent to these problems, it is difficult to predict with certainty the
outlay which will derive from these disputes and it is therefore possible that
the value of the provisions for legal proceedings and disputes may vary
depending on future developments in the proceedings underway. The Group
monitors the status of the disputes underway and consults with its legal
advisers and experts on legal and tax-related matters. More details are
included in Note 28.
Galera loan recovery
As per Note 19A, the total outstanding loan amount from Ocean 88 at 31
December 2024 was €71.8 million (2023: €48.8 million). Based on the
recoverability assessment performed, it was deemed that these loans will be
repaid and are therefore recoverable. However, an additional ECL percentage
of 5% was recorded at 31 December 2024 to reflect the risk that any operator
faces at the verge of regulation within a country. This includes risks related
to system integration, user experience, and compliance monitoring, which could
result in the loss of players due to operational disruptions, penalties, and
loss of licenses for Galera. The total ECL on Galera loans at 31 December 2024
is €4.7 million (31 December 2023: €2.0 million).
Measurement of fair values of equity investments and equity call options
The Group's equity investments and, where applicable (based on the judgements
applied above), equity call options held by the Group, are measured at fair
value for financial reporting purposes. The Group has an established control
framework with respect to the measurement of fair value.
In estimating the fair value of an asset and liability, the Group uses
market-observable data to the extent it is available. Where Level 1 inputs are
not available, the Group engages third-party qualified valuers to assist in
performing the valuation. The Group works closely with the qualified valuers
to establish the appropriate valuation techniques and inputs to the model.
As mentioned in Note 19, the Group has:
• investments in listed securities where the fair values of these
equity shares are determined by reference to published price quotations in an
active market;
• equity investments in entities that are not listed, accounted at
fair value through profit or loss under IFRS 9; and
• derivative financial assets (call options in instruments
containing potential voting rights), which are accounted at fair value through
profit or loss under IFRS 9.
The fair values of the equity investments that are not listed, and of the
derivative financial assets, rely on non-observable inputs that require
a higher level of management judgement to calculate a fair value than those
based wholly on observable inputs. Valuation techniques used to calculate fair
values include comparisons with similar financial instruments for which market
observable prices exist, DCF analysis and other valuation techniques commonly
used by market participants. Upon the use of DCF method, the Group assumes
that the expected cash flows are based on the EBITDA.
The Group only uses models with unobservable inputs for the valuation of
certain unquoted equity investments. In these cases, estimates are made to
reflect uncertainties in fair values resulting from a lack of market data
inputs; for example, as a result of illiquidity in the market. Inputs into
valuations based on unobservable data are inherently uncertain because there
is little or no current market data available from which to determine the
level at which an arm's length transaction would occur under normal business
conditions. Unobservable inputs are determined based on the best information
available. Further details on the fair value of assets are disclosed in Note
19.
The following table shows the carrying amount and fair value of non-current
assets, as disclosed in Note 19, including their levels in the fair
value hierarchy.
Carrying amount Fair value
2024 Level 1 Level 2 Level 3
€'m €'m €'m €'m
Non-current assets
Other investments (Note 19B) 152.1 11.1 - 141.0
Derivative financial assets (Note 19C) 895.0 - - 895.0
1,047.1 11.1 - 1,036.0
Carrying amount Fair value
2023 Level 1 Level 2 Level 3
€'m €'m €'m €'m
Non-current assets
Other investments (Note 19B) 92.8 15.8 - 77.0
Derivative financial assets (Note 19C) 827.8 - - 827.8
920.6 15.8 - 904.8
Note 7 - Segment information
The Group's reportable segments are strategic business units that offer
different products and services.
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The chief operating
decision maker has been identified as the Board including the Chief Executive
Officer and the Chief Financial Officer.
The operating segments identified are:
• B2B: Providing technology to gambling operators globally through a
revenue share model and, in certain agreements, taking a higher share in
exchange for additional services;
• B2C - Snaitech (discontinued operations): Acting directly as an
operator in Italy and generating revenues from online gambling, gaming
machines and retail betting;
• B2C - Sun Bingo and Other B2C: Acting directly as an operator in
the UK market and generating revenues from online gambling;
• B2C - HAPPYBET: Acting directly as an operator in Germany
(previously also Austria but operations were shut down in 2024) and generating
revenues from online gambling and retail betting.
The Group-wide profit measure is Adjusted EBITDA (see Note 10).
Year ended B2B Sun Bingo HAPPYBET Total B2C - continuing Intercompany Snaitech - discontinued operations Intercompany
31 December 2024
€'m and Other €'m €'m €'m €'m €'m
B2C Total continuing operations
€'m €'m
Total Group
€'m
Revenue 754.3 78.9 18.9 97.8 (4.1) 848.0 956.1 (12.6) 1,791.5
Adjusted EBITDA 222.0 4.5 (11.8) (7.3) - 214.7 265.7 - 480.4
Year ended B2B Sun Bingo Total continuing operations Held for sale
31 December 2024
€'m and Other €'m
B2C
€'m
Total Group
€'m
Total assets 2,126.4 105.1 2,231.5 1,066.4 3,297.9
Total liabilities 951.5 26.1 977.6 505.2 1,482.8
Year ended B2B Sun Bingo HAPPYBET Total B2C - continuing Intercompany Total continuing operations Snaitech - discontinued operations Intercompany
31 December 2023
€'m and Other €'m €'m B2C €'m €'m €'m
B2C €'m Total Group
€'m €'m
Revenue 684.1 73.4 18.2 91.6 (3.8) 771.9 946.6 (11.8) 1,706.7
Adjusted EBITDA 182.0 6.0 (11.8) (5.8) - 176.2 256.1 - 432.3
Year ended B2B Sun Bingo HAPPYBET Snaitech Total B2C
31 December 2023
€'m and Other €'m €'m €'m Total Continuing
B2C €'m
€'m Held for sale Total Group
€'m €'m
Total assets 2,117.7 90.6 17.3 1,096.2 1,204.1 3,321.8 19.3 3,341.1
Total liabilities 1,018.6 26.0 5.6 468.4 500.0 1,518.6 1.0 1,519.6
Geographical analysis of non-current assets
The Group's information about its non-current assets by location is detailed
below:
2024 2023
€'m €'m
Italy 18.3 750.3
UK 299.1 332.9
Austria 8.9 54.8
Alderney 61.9 63.9
Sweden 7.8 48.7
Gibraltar 22.3 27.8
Cyprus 15.2 19.4
Latvia 16.3 17.5
Australia 12.4 17.3
Ukraine 2.2 4.0
Estonia 7.5 8.6
British Virgin Islands 6.8 7.5
Rest of World 101.0 76.6
579.7 1,429.3
Note 8 - Discontinued operations
As identified in Note 24, the Group has treated the Snaitech B2C segment as
discontinued in these results.
The results of the Snaitech B2C segment for the year are presented below:
2024 2023
Actual Adjusted Actual Adjusted
€'m €'m €'m €'m
Revenue 956.1 956.1 946.6 946.6
Distribution costs before depreciation and amortisation (655.8) (655.8) (658.2) (657.5)
Administrative expenses before depreciation and amortisation (69.7) (35.1) (33.8) (32.9)
Reversal/(Impairment) of financial assets 0.5 0.5 (0.1) (0.1)
EBITDA 231.1 265.7 254.5 256.1
Depreciation and amortization (75.7) (52.9) (86.7) (56.1)
Loss on disposal of property, plant and equipment and intangible assets - - (0.2) (0.2)
Finance income 8.0 8.0 2.1 1.9
Finance costs (5.1) (5.1) (4.4) (4.4)
Share of (loss)/profit from associates (Note 19A) (0.1) (0.1) 0.1 0.1
Profit before taxation 158.2 215.6 165.4 197.4
Tax expense (45.9) (50.9) (48.2) (54.8)
Profit from discontinued operations, net of tax 112.3 164.7 117.2 142.6
The following table provides a full reconciliation between adjusted and actual
results from discontinued operations:
For the year ended 31 December 2024 Revenue EBITDA Profit from
€'m €'m discontinued
operations
attributable to
the owners of
the Company
€'m
Reported as actual 956.1 231.1 112.3
Employee stock option expenses - 0.6 0.6
Professional fees - 0.9 0.9
SNAI cash bonus(1) 33.1 33.1
Amortisation of intangibles on acquisitions - - 22.8
Deferred tax on acquisitions - - (5.0)
Adjusted measure 956.1 265.7 164.7
(1)Cash bonus pool that will be paid to the Snaitech senior management team on
completion of the SNAI disposal.
For the year ended 31 December 2023 Revenue EBITDA Profit from
€'m €'m discontinued
operations
attributable to
the owners of
the Company
€'m
Reported as actual 946.6 254.5 117.2
Employee stock option expenses - 0.6 0.6
Professional fees - 1.0 1.0
Fair value changes and finance cost on contingent consideration - - (0.2)
Amortisation of intangibles on acquisitions - - 30.6
Deferred tax on acquisitions - - (6.6)
Adjusted measure 946.6 256.1 142.6
Earnings per share from discontinued operations
2024 2023
Actual Adjusted Actual Adjusted
Basic (cents) 36.8 54.0 38.6 47.0
Diluted (cents) 36.8 52.9 38.6 45.6
The net cash flows incurred by the Snaitech segment in the period are as
follows:
2024 2023
€'m €'m
Operating 243.9 239.0
Investing (76.6) (57.6)
Financing (7.5) (6.3)
Net cash inflow 159.8 175.1
Note 9 - Revenue from contracts with customers
The Group has disaggregated revenue into various categories in the following
tables which is intended to:
• depict how the nature, amount, timing and uncertainty of revenue
and cash flows are affected by recognition date; and
• enable users to understand the relationship with revenue segment
information provided in the segmental information note.
Revenue analysis by geographical location of licensee, product type and
regulated vs unregulated by geographical major markets
The revenues from B2B (consisting of licensee fee, fixed-fee income, revenue
received from the sale of hardware, cost-based revenue and additional B2B
services fee) and B2C are described in Note 5D.
Upon signing a software licence agreement with a new licensee, the Group
verifies its gambling licence (jurisdiction) and registers it accordingly to
the Group's database. The table below shows the revenues generated from the
jurisdictions of the licensee.
Playtech has disclosed jurisdictions with revenue greater than 10% of the
total Group revenue separately and categorised the remaining revenue by wider
jurisdictions, being Rest of Europe, Latin America (LATAM) and Rest of World.
For the year ended 31 December 2024
Primary geographic markets B2B Sun Bingo HAPPYBET Total Intercompany Total Snaitech- discontinued operations Intercompany Total
€'m and Other €'m B2C Continuing €'m Continuing operations €'m €'m Group
B2C €'m €'m €'m
€'m
Italy 41.6 - - - - 41.6 954.9 (11.4) 985.1
Mexico 189.9 - - - - 189.9 - - 189.9
UK 137.3 78.9 - 78.9 (4.1) 212.1 - - 212.1
Rest of Europe 232.8 - 18.9 18.9 - 251.7 1.2 (1.2) 251.7
LATAM 79.2 - - - - 79.2 - - 79.2
Rest of World 73.5 - - - - 73.5 - - 73.5
754.3 78.9 18.9 97.8 (4.1) 848.0 956.1 (12.6) 1,791.5
Product type B2B B2C Intercompany Total
€'m €'m €'m €'m
B2B licensee fee 511.5 - - 511.5
B2B fixed-fee income 65.6 - - 65.6
B2B cost-based revenue 76.2 - - 76.2
B2B revenue received from the sale of hardware 9.7 - - 9.7
Additional B2B services fee1 91.3 - - 91.3
Total B2B 754.3 - - 754.3
Sun Bingo and Other B2C - 78.9 (4.1) 74.8
HAPPYBET - 18.9 - 18.9
Total B2C - 97.8 (4.1) 93.7
Total from continued operations 754.3 97.8 (4.1) 848.0
Snaitech- discontinued operations - 956.1 (12.6) 943.5
Total Group 754.3 1,053.9 (16.7) 1,791.5
2024
€'m
Regulated - Americas
- US and Canada 29.8
- Latin America 221.8
Regulated - Europe (excluding UK) 198.7
Regulated - UK 136.2
Regulated - Rest of World 11.9
Total regulated B2B revenue 598.4
Unregulated 155.9
Total B2B revenue 754.3
For the year ended 31 December 2023
Primary geographic markets B2B Sun Bingo HAPPYBET Total Intercompany Total Snaitech- discontinued operations Intercompany Total
€'m and Other €'m B2C Continuing €'m Continuing operations €'m €'m Group
B2C €'m €'m €'m
€'m
Italy 36.9 - - - - 36.9 945.4 (10.6) 971.7
Mexico 183.0 - - - - 183.0 - - 183.0
UK 127.0 73.4 - 73.4 (3.8) 196.6 - - 196.6
Rest of Europe 232.4 - 18.2 18.2 - 250.6 1.2 (1.2) 250.6
LATAM 44.8 - - - - 44.8 - - 44.8
Rest of World 60.0 - - - - 60.0 - - 60.0
684.1 73.4 18.2 91.6 (3.8) 771.9 946.6 (11.8) 1,706.7
Product type B2B B2C Intercompany Total
€'m €'m €'m €'m
B2B licensee fee 467.2 - - 467.2
B2B fixed-fee income 32.8 - - 32.8
B2B cost-based revenue 57.4 - - 57.4
B2B revenue received from the sale of hardware 13.8 - - 13.8
Additional B2B services fee1 112.9 - - 112.9
Total B2B 684.1 - - 684.1
Sun Bingo and Other B2C - 73.4 69.6
(3.8)
HAPPYBET - 18.2 - 18.2
Total B2C - (3.8) 87.8
91.6
Total from continued operations 684.1 91.6 (3.8) 771.9
Snaitech- discontinued operations - 946.6 (11.8) 934.8
Total Group 684.1 1,038.2 (15.6) 1,706.7
2023
€'m
Regulated - Americas
- US and Canada 13.2
- Latin America 198.7
Regulated - Europe (excluding UK) 200.1
Regulated - UK 126.1
Regulated - Rest of World 7.0
Total regulated B2B revenue 545.1
Unregulated 139.0
Total B2B revenue 684.1
1 The additional B2B services fee includes €80.6 million from Caliplay
(2023: €111.7 million), which as per Note 19C will cease following
completion of the revised arrangements.
There were no changes in the Group's revenue measurement policies and
procedures in 2024 and 2023. The vast majority of the Group's B2B contracts
are for the delivery of services within the next 12 months. For the year ended
31 December 2024, Playtech recognised revenue from a single customer
totalling approximately 20.6% of the Group's total continuing revenue (2023:
a single customer totalling approximately 23.1%). The revenue with a single
customer amounting to 20.6% of total revenue of the Group is under B2B
operating segment and is attributed from Mexico in both years.
The Group's contract liabilities, in other words deferred income, primarily
include advance payment for hardware and services and also include certain
fixed fees paid by the licensee in the beginning of the contract. Deferred
income as at 31 December 2024 was €6.9 million (2023: €6.2 million).
The movement in contract liabilities during the year was as follows:
2024 2023
€'m €'m
Balance at 1 January 6.2 6.0
Recognised during the year 10.9 8.0
Realised in profit or loss (9.3) (7.8)
Reclassified to held for sale (Note 24) (0.9) -
Balance at 31 December 6.9 6.2
Note 10 - Adjusted items
Management regularly uses adjusted financial measures internally to
understand, manage and evaluate the business and make operating decisions.
These adjusted measures are among the primary factors management uses in
planning for and forecasting future periods. The primary adjusted financial
measures are Adjusted EBITDA and Adjusted Profit, which management considers
are relevant in understanding the Group's financial performance. The
definitions of adjusted items and underlying adjusted results are disclosed in
Note 5 paragraph U.
As these are not a defined performance measure under IFRS, the Group's
definition of adjusted items may not be comparable with similarly titled
performance measures or disclosures by other entities.
The following tables provide a full reconciliation between adjusted and actual
results from continuing operations:
For the year ended 31 December 2024 Revenue EBITDA - EBITDA - EBITDA (Loss)/Profit (Loss)/Profit
€'m B2B B2C €'m before from
€'m €'m tax from continuing
continuing operations
operations €'m
€'m
Reported as actual 848.0 135.0 (7.3) 127.7 (9.4) (136.5)
Employee stock option expenses1 - 4.7 - 4.7 4.7 4.7
Professional fees2 - 22.3 - 22.3 22.3 22.3
Contract termination fees3 - 24.0 - 24.0 24.0 24.0
Playtech incentive arrangements4 - 36.0 - 36.0 36.0 36.0
Fair value changes and finance costs on contingent consideration5 - - - - 3.8 3.8
Fair value changes of equity instruments6 - - - - (51.1) (51.1)
Fair value change of derivative financial assets6 - - - - (61.5) (61.5)
Amortisation of intangible assets on acquisitions7 - - - - 6.2 6.2
Impairment of intangible assets, property plant and equipment and right of use - - - - 120.2 120.2
assets8
Provision against asset held for sale - - - - 4.3 4.3
Deferred tax on intangible assets on acquisitions 7
- - - - - (8.0)
Release of brought forward deferred tax asset9 - - - - - 30.9
Release of brought forward deferred - - - - - 26.1
tax asset on group restructuring10
Tax on unrealised fair value changes of - - - - - 10.9
derivative financial assets11
Deferred tax on unrealised fair value
changes of equity investments12 - - - - - 12.9
Deferred tax asset recognised in respect of refundable tax credit relating to
prior years
- - - - - (6.5)
Income tax relating to prior years 13
-
-
-
-
- 19.8
Adjusted measure 848.0 222.0 (7.3) 214.7 99.5 58.5
1 Employee stock option expenses relate to non-cash expenses of the
Group and differ from year to year based on share price and the number of
options granted.
2 The vast majority of the professional fees relate to the Caliplay
disputes (Note 6), disposal of Snaitech CGU, and tax advisory fees in relation
to prior year income tax which has now been settled with the relevant
authority (Note 13). These expenses are not considered ongoing costs of
operations and therefore are excluded.
3 Following the early termination of certain contracts in Asia as
disclosed in Note 6 the Group had to pay termination fees of €24.0 million.
These expenses are not considered an ongoing cost of operations, are one off
in nature and therefore are excluded. Please refer to Note 6 for further
information.
4 Part of the proceeds from the expected disposal of the Snaitech CGU
have been allocated as bonuses to Playtech's ongoing senior team to be used as
a retention tool. These bonuses are in addition to normal performance bonuses.
The total amount of €100 million plus social security costs will be paid 60%
on completion of the disposal and the payment of dividends, with the other 20%
and 20% paid 12 and 24 months respectively post the completion of the
transaction. Since this amount is funded from the Snaitech disposal, and
payable over a definitive 3-year period, it is not included in Adjusted
EBITDA.
5 Fair value change and finance costs on contingent consideration
mostly related to the acquisition of AUS GMTC. These expenses are not
considered ongoing costs of operations and therefore are excluded.
6 Fair value changes of equity instruments and derivative financial
assets. These are excluded from the results as they relate to unrealised
profit/loss.
7 Amortisation and deferred tax on intangible assets acquired through
business combinations of which €6.4 million relates to the release of
deferred tax liability of impairment of acquired intangibles. Costs directly
related to acquisitions are not considered ongoing costs of operations and
therefore are excluded.
8 Impairment of intangible assets, property, plant and equipment and
right of use assets mainly relates to the impairment of IGS CGU of €4.9
million, Sports B2B CGU €96.3 million and Quickspin €18.2 million. Refer
to Note 18.
9 The reported tax expense has been adjusted for the derecognition of
a deferred tax asset of €30.9 million relating to UK tax losses. This was
adjusted because the losses in relation to the derecognised amount were
generated over a number of years and therefore distorts the effective tax rate
for the year. Refer to Notes 6, 13 and 31.
10 The reported tax expense has been adjusted for the derecognition of a
deferred tax asset relating to the Group reorganisation in January 2021 of
€26.1 million. Refer to Note 5.
11 This current tax charge of €10.9 million relates to unrealised fair
value changes of derivative financial assets which is also adjusted. See Note
13.
12 Tax on unrealised fair value changes of equity investments of €12.9
million is adjusted to match the treatment of the equity investment fair value
movement which is also adjusted.
13 Income tax in respect of prior years which have now been settled with
the relevant tax authority.
For the year ended 31 December 2023 Revenue EBITDA - EBITDA - EBITDA Profitt (Loss)/Profit
€'m B2B B2C €'m before from
€'m €'m tax from continuing
continuing operations
operations attributable
€'m to the
owners
of the
Company
€'m
Reported as actual 771.9 157.9 (5.9) 152.0 70.4 (12.1)
Employee stock option expenses1 - 5.6 0.1 5.7 5.7 5.7
Professional fees2 - 13.4 - 13.4 13.4 13.4
Impairment of investment and receivables3 - 5.1 - 5.1 5.1 5.1
Fair value changes and finance costs on contingent consideration4 - - - - 3.5 3.5
Fair value changes of equity instruments5 - - - - 6.6 6.6
Fair value change of derivative financial assets5 - - - - (153.4) (153.4)
Amortisation of intangible assets on acquisitions6 - - - - 12.0 12.0
Impairment of intangible assets7 - - - - 89.8 89.8
Deferred tax on acquisitions6 - - - - - (1.6)
Derecognition of brought forward deferred tax asset8 - - - - - 37.2
Tax related to uncertain positions9 - - - - - 8.0
Adjusted measure 771.9 182.0 (5.8) 176.2 53.1 14.2
1 Employee stock option expenses relate to non-cash expenses of the
Group and differ from year to year based on share price and the number of
options granted.
2 The vast majority of the professional fees relate to the acquisition
of Hard Rock Digital (Note 19B) and the Caliplay disputes (Note 6). These
expenses are not considered ongoing costs of operations and therefore are
excluded.
3 Provision against investments and other receivables that do not
relate to the ordinary operations of the Group.
4 Fair value change and finance costs on contingent consideration
mostly related to the acquisition of AUS GMTC. These expenses are not
considered ongoing costs of operations and therefore are excluded.
5 Fair value changes of equity instruments and derivative financial
assets. These are excluded from the results as they relate to unrealised
profit/loss.
6 Amortisation and deferred tax on intangible assets acquired through
business combinations. Costs directly related to acquisitions are not
considered ongoing costs of operations and therefore are excluded.
7 Impairment of intangible assets mainly relates to the impairment of
Eyecon €7.8 million, Quickspin €9.6 million and Sports B2B €72.2
million. Refer to Note 18.
8 The reported tax expense has been adjusted for the derecognition of
a deferred tax asset of €37.2 million relating to UK tax losses. This was
adjusted because the losses in relation to the derecognised amount were
generated over a number of years and therefore distorts the effective tax rate
for the year. Refer to Notes 6, 13 and 31.
9 Change in estimates related to uncertain overseas tax positions in
respect of prior years which have now been settled with the relevant tax
authority.
The following table provides a full reconciliation between adjusted and actual
tax from continuing operations:
2024 2023
€'m €'m
Tax on profit or loss for the year 127.1 82.5
Adjusted for:
Deferred tax on intangible assets on acquisitions 8.0 1.6
Release of brought forward deferred tax asset (30.9) (37.2)
Release of brought forward deferred tax asset on group restructuring (26.1) -
Tax on unrealised fair value changes of derivative financial assets (10.9) -
Deferred tax on unrealised fair value changes of equity investments (12.9) -
Deferred tax asset recognised in respect of refundable tax credit relating to 6.5 -
prior years
Income tax relating to prior years/tax related to uncertain positions (8.0)
(19.8)
Adjusted tax 41.0 38.9
Note 11 - Auditor's remuneration
2024 2023
€'m €'m
Group audit and Parent Company (BDO) 3.0 3.0
Audit of subsidiaries (BDO) 1.4 1.4
Audit of subsidiaries (non-BDO) 0.2 0.2
Total audit fees 4.6 4.6
Non-audit services provided by Parent Company auditor and its international
member firms
Other non-audit services 1.4 0.9
Total non-audit fees 1.4 0.9
Note 12 - Finance income and costs
A. Finance income
2024 2023
€'m €'m
Interest income1 19.7 8.0
Dividend income 3.3 0.1
Net foreign exchange gain 7.2 2.1
30.2 10.2
1 Interest income of €19.7 million includes €7.5 million interest income
from Caliplay, which is part of normal contractual terms.
B. Finance costs
2024 2023
€'m €'m
Interest on bonds (34.0) (29.5)
Interest on lease liability (3.0) (3.6)
Interest on loans and borrowings and other - (1.5)
Bank facility fees (2.3) (2.3)
Bank charges (0.8) (0.5)
Movement in contingent consideration (3.8) (3.5)
Expected credit loss on loans receivable (2.6) (0.9)
(46.5) (41.8)
Net finance costs (16.3) (31.6)
Note 13 - Tax expense
2024 2023
€'m €'m
Current tax expense
Income tax expense for the current year 33.1 15.6
Income tax relating to prior years1 22.5 16.1
Withholding tax 0.3 0.8
Total current tax expense 55.9 32.4
Deferred tax
Origination and reversal of temporary differences
Deferred tax movements relating to prior years 20.7 5.8
50.5 44.3
Total deferred tax expense 71.2 50.1
Total tax expense from continuing operations 127.1 82.5
A reconciliation of the reported income tax charge of €127.1 million (2023:
€82.5million) applicable to loss before tax of €9.4 million (2023: profit
before tax od €70.4 million) at the UK statutory income tax rate of 25%
(2023: 23.5%) is as follows:
2023
2024 €'m
€'m
Profit /(loss) from continuing operations (136.5) (12.1)
Income tax expense (127.1) (82.5)
Profit/(loss) before income tax (9.4) 70.4
Tax using the Company's domestic tax rate (25% in 2024 and 23.5% in 2023) (2.4) 16.5
Tax effect of:
Non-taxable fair value movements on call options - (36.1)
Non-deductible expenses 29.5 29.6
Deferred tax asset released in respect of Group restructuring 26.1 (5.2)
Deferred tax asset released in respect of prior years 30.9 39.1
Deferred tax in respect of refundable credit relating to prior years (6.5) -
Increase in unrecognised tax losses 40.3 24.5
Difference in tax rates in overseas jurisdictions (11.4) (8.8)
Other (1.9) 7.1
Adjustment in respect of previous years in respect of income tax 22.5 15.8
Total tax expense 127.1 82.5
Reported tax charge
A reported tax charge of €127.1million from continuing operations arises on
a loss before tax of €9.4 million (2023: profit before tax of €70.4
million) compared to an expected credit of €2.4 million (2023: an expected
tax charge of €16.5 million). The reported tax expense includes adjustments
in respect of prior years relating to current tax and deferred tax of €72.9
million (2023: €58.0 million). The prior year adjustment in respect of
current tax of €19.8 million relates to income tax which has now been
settled with the relevant tax authority. The Group's effective tax rate for
the current period is higher than the expected tax credit of 25%. The key
reasons for the differences are:
• Profits of subsidiaries located in territories where the tax rate
is lower than the UK statutory tax rate.
• The release of a deferred tax asset of €70.5 million in respect
of UK tax attributes. Further details of this release are included in Note 7.
• Current year tax losses and excess interest not recognised for
deferred tax purposes which increases the reported tax by €46.2 million. The
tax losses and excess interest mainly relate to the UK Group companies.
• Expenses not deductible for tax purposes including professional
fees and impairment of intangible assets.
Changes in tax rates and factors affecting the future tax charge
The most significant elements of the Group's income arise in the UK where the
tax rate for the current period is 25%. The Finance Act 2021 (enacted on 24
May 2021) increased the main rate of UK corporate income tax to 25% with
effect from 1 April 2023. Deferred tax balances have been calculated using the
tax rates upon which the balance is expected to unwind.
The Group adopted the amendments to IAS 12 issued in May 2023, which provide a
temporary mandatory exception from the requirement to recognise and disclose
deferred taxes arising from enacted tax law that implements the Pillar Two
model rules, including tax law that implements qualified domestic minimum
top-up taxes described in those rules. Under these amendments, any Pillar Two
taxes incurred by the Group will be accounted for as current taxes from 1
January 2024. Based on an initial analysis of the current year financial data,
most territories in which the Group operates are expected to qualify for one
of the safe harbour exemptions such that top-up taxes should not apply. In
territories where this is not the case, the reported tax charge includes
income tax of €12.2 million related to Pillar 2 income tax . The Group
continues to refine this assessment and analyse the future consequences of
these rules and, in particular, in relation to the fair value movements as to
how future fair value movements, should these arise, may impact the tax
charge.
Deferred tax
The deferred tax asset and liability are measured at the enacted or
substantively enacted tax rates of the respective territories which are
expected to apply to the year in which the asset is realised or the liability
is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date. The deferred tax balances
within the financial statements reflect the increase in the UK's main
corporation tax rate from 19% to 25% from 1 April 2023.
Note 14 - Earnings per share
The calculation of basic earnings per share (EPS) has been based on the
following profit attributable to ordinary shareholders and weighted average
number of ordinary shares outstanding.
2024 2023
Actual Adjusted Actual Adjusted
€'m €'m €'m €'m
Profit/(Loss) attributable to the owners of the Company (23.9) 223.5 105.1 156.8
Basic (cents) (7.8) 73.2 34.7 51.7
Diluted (cents) (7.8) 71.7 33.7 50.2
2024 2023
Actual Adjusted Actual Adjusted
€'m €'m €'m €'m
Profit/(Loss) attributable to the owners of the Company from continuing (12.1) 14.2
operations
(136.2) 58.8
Basic (cents) (44.6) 19.2 (3.9) 4.7
Diluted (cents) (44.6) 18.8 (3.9) 4.6
2024 2023
Actual Adjusted Actual Adjusted
Number Number Number Number
Denominator - basic
Weighted average number of equity shares 305,355,970 305,355,970 303,279,998 303,279,998
Denominator - diluted
Weighted average number of equity shares 305,355,970 305,355,970 303,279,998 303,279,998
Weighted average number of option shares 6,318,633 6,318,633 8,647,771 8,647,771
Weighted average number of shares 311,674,603 311,674,603 311,927,769 311,927,769
The calculation of diluted EPS has been based on the above profit attributable
to ordinary shareholders and weighted average number of ordinary shares
outstanding after adjustment for the effects of all dilutive potential
ordinary shares. The effects of the anti-dilutive potential ordinary shares
are ignored in calculating diluted EPS.
EPS for discontinued operations is disclosed in Note 8.
Note 15 - Employee benefits
Total staff costs (from continuing operations) comprise the following:
2024 2023
€'m €'m
Salaries and personnel-related costs 456.1 379.9
Cash-settled share-based payments 1.7 0.2
Equity-settled share-based payments 4.7 5.6
462.5 385.7
Average number of personnel:
Distribution 6,712 6,130
General and administration 382 372
7,094 6,502
The Group has the following employee share option plans (ESOP) for the
granting of non-transferable options to certain employees:
• the Long Term Incentive Plan 2012 (LTIP). Awards (options,
conditional share awards, cash-settled awards, or a forfeitable share award)
granted under this plan vest on the first day on which they become
exercisable, which is typically between 18 and 36 months after grant date; and
• the Long Term Incentive Plan 2022 (LTIP22). Awards (options,
conditional share awards, restricted shares, cash-settled awards) granted
under this plan vest on the first day on which they become exercisable, which
is typically after 36 months.
The overall term of the ESOP is ten years. These options are settled in equity
or cash once exercised. Option prices are denominated in GBP.
There were no grants during 2024.
During 2023 the Group granted 3,023,945 nil cost options under its LTIP22
which are subject to EPS growth, relative total shareholder return (TSR)
against constituents of the FTSE 250 but excluding the investment trusts
index, and relative TSR against a sector comparator group of peer companies.
The fair value per share at the grant date according to the Monte Carlo
simulation model is between £3.84 and £5.85. Inputs used were as follows:
Expected life (years) Share price at Dividend Risk-free rate Projection Volatility
grant date yield period
(years)
3 £5.85 Nil 3.78% 3 36%-46%
At 31 December 2024 and 2023 the following options were outstanding:
2024 2023
Number Number
Shares vested on 1 March 2018 at nil cost 72,596 72,596
Shares vested between 1 September 2016 and 1 March 2018 at nil cost 9,902 12,411
Shares vested on 1 March 2019 at nil cost 21,820 21,820
Shares vested between 1 September 2017 and 1 March 2019 at nil cost 20,026 23,344
Shares vested on 21 December 2019 at nil cost 7,734 9,779
Shares vested on 1 March 2020 at nil cost 51,939 77,326
Shares vested on 1 March 2021 at nil cost 158,729 612,618
Shares vested between 1 March 2022 and 1 August 2022 at nil cost 561,678 1,260,489
Shares vested by 19 December 2024 at nil cost 700,000 1,400,000
Shares vested between 1 March 2023 and 26 October 2023 at nil cost 1,820,235 3,323,693
Shares will vest by 18 August 2025 at nil cost 351,724 351,724
Shares will vest by 5 May 2026 at nil cost 2,954,767 3,012,659
6,731,150 10,178,459
The total number of shares exercisable as of 31 December 2024 is 3,424,659
(2023: 6,114,076).
The total number of outstanding shares that will be cash settled is 412,517
(2023: 570,545). The total liability outstanding for the cash-settled options
is €2.81 million (2023: €2.2 million).
The following table illustrates the number and weighted average exercise
prices of share options for the ESOP.
2024 2023 2024 2023
Number Number Weighted average Weighted average
of options of options exercise price exercise price
Outstanding at the beginning of the year 10,178,459 12,172,864 - -
Granted - 3,023,945 - -
Forfeited (761,466) (1,137,717) - -
Exercised (2,685,843) (3,880,633) - -
Outstanding at the end of the year 6,731,150 10,178,459 - -
Included in the number of options exercised during the year are 153,890
options (2023: 176,142) which were cash settled.
The weighted average share price at the date of exercise of options was £7.18
(2023: £5.39).
Share options outstanding at the end of the year have the following exercise
prices:
Expiry date Exercise price 2024 2023
Number Number
21 December 2025 Nil 82,498 85,007
Between 21 December 2026 and 31 December 2026 Nil 49,580 54,943
Between 1 March 2027 and 28 June 2027 Nil 51,939 77,326
23 July 2028 Nil 155,718 609,607
Between 27 February 2029 and 19 December 2029 Nil 1,264,689 2,663,500
Between 17 July 2030 and 26 October 2030 Nil 1,820,235 3,323,693
18 August 2032 Nil 351,724 351,724
5 May 2033 Nil 2,954,767 3,012,659
6,731,150 10,178,459
Note 16 - Property, plant and equipment
Computer Gaming Office furniture Buildings, Total
software machines and equipment leasehold €'m
and hardware €'m €'m buildings and
€'m improvements
€'m
Cost
At 1 January 2024 153.4 137.5 51.4 278.7 621.0
Additions 18.6 26.1 6.2 11.4 62.3
Acquisitions through business combinations 0.1 0.3 0.3 - 0.7
Disposals (4.6) (7.2) (2.3) (3.0) (17.1)
Reclassifications
Reclassification to assets classified as held for sale (Note 24) (1.2) (104.8) (22.0) (233.8) (361.8)
Foreign exchange movement 0.4 - 0.2 0.5 1.1
At 31 December 2024 166.7 51.9 33.8 53.8 306.2
Accumulated depreciation and impairment losses
At 1 January 2024 114.1 93.4 31.3 32.0 270.8
Charge 18.7 16.5 5.7 8.0 48.9
Impairment loss - 0.2 0.1 - 0.3
Disposals (4.2) (6.5) (2.2) (2.4) (15.3)
Reclassifications - (0.2) 0.2 - -
Reclassification to assets classified as held for sale (Note 24) (1.2) (69.3) (12.3) (9.9) (92.7)
Foreign exchange movement 0.2 - - 0.1 0.3
At 31 December 2024 127.6 34.1 22.8 27.8 212.3
Net book value
At 31 December 2024 39.1 17.8 11.0 26.0 93.9
At 1 January 2024 39.3 44.1 20.1 246.7 350.2
Computer Gaming Office furniture Buildings, Total
software machines and equipment leasehold €'m
and hardware €'m €'m buildings and
€'m improvements
€'m
Cost
At 1 January 2023 142.5 115.2 49.0 274.4 581.1
Additions 19.5 23.1 6.2 8.8 57.6
Acquisitions through business combinations - 0.1 0.1 - 0.2
Disposals (6.2) (2.8) (1.1) (3.8) (13.9)
Reclassifications - 1.9 (1.9) - -
Foreign exchange movement (2.4) - (0.9) (0.7) (4.0)
At 31 December 2023 153.4 137.5 51.4 278.7 621.0
Accumulated depreciation and impairment losses
At 1 January 2023 104.1 78.0 28.2 29.4 239.7
Charge 17.5 16.1 6.1 6.8 46.5
Disposals (6.1) (2.6) (0.7) (3.6) (13.0)
Reclassifications - 1.9 (1.9) - -
Foreign exchange movement (1.4) - (0.4) (0.6) (2.4)
At 31 December 2023 114.1 93.4 31.3 32.0 270.8
Net book value
At 31 December 2023 39.3 44.1 20.1 246.7 350.2
At 1 January 2023 38.4 37.2 20.8 245.0 341.4
Note 17 - Leases
Set out below are the carrying amounts of right of use assets recognised and
the movements during the year:
Office leases Hosting Machinery rentals Total
€'m €'m €'m €'m
At 1 January 2024 59.9 10.1 1.0 71.0
Additions/modifications 9.8 7.1 0.1 17.0
On business combinations 2.0 - - 2.0
Reclassification to assets classified as held for sale (Note 24) (31.1) (0.5) (0.8) (32.4)
Amortisation charge (14.9) (8.1) (0.3) (23.3)
Impairment loss (0.2) - - (0.2)
Foreign exchange movement (0.1) - - (0.1)
At 31 December 2024 25.4 8.6 - 34.0
Office leases Hosting Machinery rentals Total
€'m €'m €'m €'m
At 1 January 2023 60.5 11.1 - 71.6
Additions/modifications 14.2 6.8 1.4 22.4
On business combinations 1.9 - - 1.9
Amortisation charge (15.1) (7.8) (0.4) (23.3)
Foreign exchange movement (1.6) - - (1.6)
At 31 December 2023 59.9 10.1 1.0 71.0
Set out below are the carrying amounts of lease liabilities and the movements
during the year:
2024 2023
€'m €'m
At 1 January 86.8 85.8
Additions/modifications 16.7 22.0
On business combinations 2.0 1.9
Reclassification to assets classified as held for sale (Note 24) (34.7) -
Accretion of interest 4.7 5.2
Payments (30.5) (28.3)
Foreign exchange movement 1.3 0.2
At 31 December 46.3 86.8
Current 19.8 24.9
Non-current 26.5 61.9
46.3 86.8
The maturity analysis of lease liabilities is disclosed in Note 35B.
The following are the amounts recognised in profit or loss:
2024 2023
€'m €'m
Amortisation expense of right of use assets 18.7 18.3
Interest expense on lease liabilities 3.0 3.6
Impact of early termination of lease contracts (0.2) (0.1)
21.5 21.8
Note 18 - Intangible assets
Patents, domain Technology IP Development Customer Goodwill Total
names and licence €'m costs list and €'m €'m
€'m €'m affiliates
€'m
Cost
At 1 January 2024 273.2 79.7 483.4 526.5 680.4 2,043.2
Additions 11.7 - 50.0 - - 61.7
Assets acquired through business combinations* - - - - 15.4 15.4
Reclassification to assets classified as held for sale (Note 24) (243.4) - (12.3) (245.3) (307.6) (808.6)
Disposal - - (5.1) - (3.4) (8.5)
Foreign exchange movement 0.1 - - - - 0.1
At 31 December 2024 41.6 79.7 516.0 281.2 384.8 1,303.3
Accumulated amortisation and impairment losses
At 1 January 2024 177.3 75.4 349.9 408.0 151.4 1,162.0
Charge 40.8 1.8 45.2 21.2 - 109.0
Impairment loss 2.1 0.1 20.6 26.5 70.4 119.7
Reclassification to assets classified as held for sale (Note 24) (180.4) - (6.5) (181.6) (25.3) (393.8)
Disposals - - (5.1) - (2.7) (7.8)
Foreign exchange movement 0.1 - - - - 0.1
At 31 December 2024 39.9 77.3 404.1 274.1 193.8 989.2
Net book value
At 31 December 2024 1.7 2.4 111.9 7.1 191.0 314.1
At 1 January 2024 95.9 4.3 133.5 118.5 529.0 881.2
* During 2024 the Group made acquisitions with net cash outflows of €12.0
million. Other than the Mixzone acquisition which created goodwill of €1.2
million (Note 25F) all other assets created on business combinations were
transferred to held for sale. See Note 24 for further details.
Patents, domain Technology IP Development Customer Goodwill Total
names and licence €'m costs list and €'m €'m
€'m €'m affiliates
€'m
Cost
At 1 January 2023 222.4 79.7 428.4 523.5 676.6 1,930.6
Additions 51.0 - 58.4 - - 109.4
Assets acquired through business combinations 0.4 - - 3.0 4.2 7.6
Disposal (0.2) - (3.4) - (0.4) (4.0)
Foreign exchange movement (0.4) - - - - (0.4)
At 31 December 2023 273.2 79.7 483.4 526.5 680.4 2,043.2
Accumulated amortisation and impairment losses
At 1 January 2023 133.8 72.4 300.3 376.4 66.8 949.7
Charge 43.5 3.0 49.4 30.8 - 126.7
Impairment loss 0.4 - 3.6 0.8 85.0 89.8
Disposals - - (3.4) - (0.4) (3.8)
Foreign exchange movement (0.4) - - - - (0.4)
At 31 December 2023 177.3 75.4 349.9 408.0 151.4 1,162.0
Net book value
At 31 December 2023 95.9 4.3 133.5 118.5 529.0 881.2
At 1 January 2023 88.6 7.3 128.1 147.1 609.8 980.9
During the year, the research and development costs net of capitalised
development costs were €116.9 million (2023: €101.2 million). The internal
capitalisation for the year was €48.8 million (2023: €56.7 million).
Out of the total amortisation charge of €109.0 million (2023: €126.7
million), an amount of €29.0 million (2023: €42.6 million including
continuing and discontinued operations) relates to the intangible assets
acquired through business combinations.
In accordance with IAS 36, the Group regularly monitors the carrying value of
its intangible assets, including goodwill. Goodwill is allocated to
14 cash-generating units (CGUs) (2023: 13) out of which two CGUs are held for
sale.
The allocation of the goodwill to CGUs (excluding CGUs held for sale) is as
follows:
2024 2023
€'m €'m
Snai (Reclassified to assets held for sale) - 263.4
AUS GMTC 4.4 4.4
Bingo retail 9.5 9.5
Casino 50.8 50.8
Poker (€5.0 million reclassified to assets held for sale - Note 24) 10.6 15.6
Quickspin - 10.2
Sports B2B - 60.3
VB retail 4.6 4.6
Services 109.9 109.9
Sports B2C - 0.3
Mixzone 1.2 -
191.0 529.0
Management reviews CGUs for impairment bi-annually with a detailed assessment
of each CGU carried out annually and whenever there is an indication that a
unit may be impaired. During the annual detailed review, the recoverable
amount of each CGU is determined from value in use calculations based on cash
flow projections covering five years (using the Board approved three-year plan
along with a remaining two-year forecasted period) plus a terminal value which
have been adjusted to take into account each CGU's major events as expected in
future periods. A potential risk for future impairment exists should there be
a significant change in the economic outlook versus those trends management
anticipates in its forecasts due to the occurrence of these events.
With the exception of CGUs which have been fully impaired to date and CGUs
deemed sensitive to impairment from a reasonably possible change in key
assumptions as reviewed in further detail below, management has used the
Group's three-year plan, however extended it to five years and calculated the
growth estimates for years one to five by applying an average annual growth
rate for revenue based on the underlying economic environment in which the CGU
operates and the expected performance over that period. Beyond this period,
management has applied an annual growth rate of 2.0%. Management has included
appropriate capital expenditure requirements to support the forecast growth
and assumed the maintenance of the current level of licences. Management has
also applied post-tax discount rates to the cash flow projections as
summarised below.
2024 CGUs not sensitive to changes in assumptions:
Average revenue Discount
growth rate rate applied
2025-2029
AUS GMTC 10.8% 11.46%
Bingo retail 8.8% 12.12%
Bingo VF 8.1% 13.49%
Casino 6.0% 11.59%
Services (1.5%) 16.61%
Poker 0.8% 12.75%
2023 CGUs not sensitive to changes in assumptions:
Average revenue Discount
growth rate rate applied
2024-2028
Snai 3.1% 15.2%
AUS GMTC 15.8% 13.1%
Bingo retail 4.9% 13.8%
Casino 4.7% 13.1%
Poker 4.0% 14.9%
In relation to the IGS, Sports B2B and Quickspin CGUs, following impairment
tests completed in 2024, impairments have been recognised as disclosed below.
Certain other CGUs, which are specifically referred to below but not impaired,
are considered sensitive to changes in assumptions used for the calculation
of value in use.
IGS CGU (Impaired at 30 June 2024)
The recoverable amount of the IGS CGU, with a carrying value of €4.9 million
at 30 June 2024, has been determined using a cash flow forecast that includes
annual revenue growth rates ranging between a decline of 19.9% to an increase
of 59.0%, over the one to five-year forecast period (31 December 2023: annual
revenue growth rates between 5.0% and 26.0%), a 2.0% long-term growth rate (31
December 2023: 2.0% long-term growth rate) and a post-tax discount rate of
14.7% (31 December 2023: post-tax discount rate of 20.9%). Following the
termination of two key contracts, the recoverable amount of this CGU is €Nil
and hence the carrying value has been impaired by €4.9 million in the year
ended 31 December 2024. Following the impairment posted, all assets have been
impaired to the recoverable amount.
Sports B2B CGU (Impaired at 30 June 2024)
The recoverable amount of the Sports B2B CGU, with a carrying value of
€113.0 million at 30 June 2024 (pre-impairment), has been determined using a
cash flow forecast that includes annual revenue growth rates ranging between a
decline of 6.5% to an increase 3.0%, over the one to five year forecast period
(31 December 2023: annual revenue growth rates ranging from a decline of 20.0%
and an increase of 15.0%), a 2.0% long-term growth rate (31 December 2023:
2.0% long-term growth rate) and a post-tax discount rate of 13.7% (31 December
2023: post-tax discount rate of 13.7%).
Following the announcement of the revised strategic agreement with Caliplay,
which will impact the sports revenue generated from 2025 (when the conditions
were met and the revised arrangements become effective from 31 March 2025 as
announced on 21 March 2025), in addition to further expected reductions in
revenue from other sports licensees, the recoverable amount of €16.6 million
does not exceed the carrying value as stated above (pre-impairment) and
therefore an impairment loss of €96.3 million was recognised in the year
ended 31 December 2024 (31 December 2023: impairment of €72.2 million due to
the termination of two key contracts). Following the impairment posted, all
assets have been impaired to the recoverable amount.
The impairment recorded in the interim review to 30 June 2024 contained an
error due to the incorrect allocation of CGU assets to the Sports CGU. This
has resulted in a €15.9 million reduction to the impairment previously
recorded in the period to 30 June 2024. This matter will also be disclosed
as a restatement in the 6-month period to 30 June 2025.
Quickspin CGU
Given the challenges of operating in an extremely competitive market with
stricter regulations being introduced, the recoverable amount of the Quickspin
CGU was impaired by €18.2 million in 2024 (2023: €9.6 million).
The recoverable amount of this CGU of €6.4 million, with a carrying value of
€24.6 million (pre-impairment) at 31 December 2024, has been determined
using a cash flow forecast that includes annual revenue growth rates between
2.6% and -4.0% over the one to five-year forecast period (2023: annual revenue
growth rates between 5.0% and 7.2%), 2.0% long-term growth rate (2023: 2.0%
long-term growth rate) and a post-tax discount rate of 12.5% (2023: post-tax
discount rate of 12.4%).
If the revenue growth rate per annum is lower by 1%, then an additional
impairment of €3.5 million would be recognised. Similarly, if the discount
rate increases to a post-tax discount rate of 13.5% from 12.5%, this would
result in a further impairment of €0.2 million.
Eyecon CGU
The Eyecon CGU recognised an impairment of €7.8 million in 2023. The CGU was
largely in line with budget in 2024. The recoverable amount of this CGU of
€15.8 million, with a carrying value equal to €10.2 million at 31
December 2024, was determined using a cash flow forecast that includes annual
revenue growth rates of 5.0% over the one to five-year forecast period (2023:
annual revenue growth rates between 2.0% and 11.0%), 2.0% long-term growth
rate (2023: 2.0% long-term growth rate) and a post-tax discount rate of 13.6%
(2023: post-tax discount rate of 15.1%). The recoverable amount would equal
the carrying value of the CGU if:
• the discount rate applied reached a post-tax discount rate of
20.0%.
• the revenue growth was lower by 0.4% when compared to the
forecasted average five-year growth.
VB Retail CGU
The recoverable amount of the VB Retail CGU showed signs of underperformance
during H2 2024, mainly due to delays in securing new revenue streams. However,
given the fact that new opportunities have been secured for 2025, no
impairment has been recognised as at 31 December 2024.
The recoverable amount of this CGU of €41.2 million, with a carrying value
of €27.9 million at 31 December 2024, has been determined using a cash flow
forecast that includes annual revenue growth rates between 18.0% and 4.5% over
the one to five-year forecast period (2023: annual revenue growth rates
between 8.0% and 13.0%), 2.0% long-term growth rate (2023: 2.0% long-term
growth rate) and a post-tax discount rate of 11.25% (2023: post-tax discount
rate of 12.7%). The recoverable amount would equal the carrying value of the
CGU if:
• the discount rate applied was higher by 39.7%, i.e. reaching a
post-tax discount rate of 15.7%; or
• the revenue growth was lower by 4.5% when compared to the
forecasted average five-year growth.
Note 19 - Investments and derivative financial assets
Introduction
Below is a breakdown of the relevant assets at 31 December 2024 and 2023 per
the consolidated balance sheet:
2024 2023
€'m €'m
A. Investments in associates 76.4 51.5
B. Other investments 152.1 92.8
C. Derivative financial assets 895.0 827.8
1,123.5 972.1
The following are the amounts recognised in the statement of comprehensive
income:
2024 2023
€'m €'m
Profit or loss
A. Share of loss from associates (3.8) (0.9)
B. Unrealised fair value changes of equity investments 51.1 (6.6)
C. Unrealised fair value changes of derivative financial assets 61.5 153.4
Other comprehensive income
Foreign exchange movement from the derivative call options and equity 12.4 (5.9)
investments held in non-Euro functional currency subsidiaries
121.2 140.0
Where the underlying derivative call option and equity investments are held in
a non-Euro functional currency entity, the foreign exchange movement is
recorded through other comprehensive income. As at 31 December 2024, the
foreign exchange movement of the derivative call options held in Caliplay and
NorthStar (Note 19C) is recorded in profit or loss as these options are held
in Euro functional currency entities. The foreign exchange movement of the
derivative call options held in Wplay, Onjoc, Tenbet, Tenlot El Salvador S.A.
de C.V ('Tenlot El Salvador') (Note 19C) and the small minority equity
investment in Hard Rock Digital (Note 19B) are recorded through other
comprehensive income as these are held in USD functional currency entities.
The recognition and valuation methodologies for each category are explained in
each of the relevant sections below, including key judgements made under each
arrangement as described in Note 6.
A. Investments in associates
Balance sheet
2024 2023
€'m €'m
Caliplay - -
ALFEA SPA 1.6 1.7
Galera - -
LSports 65.6 35.2
Stats International - -
NorthStar 5.4 9.0
Sporting News Holdings Limited 5.4 5.6
Total investment in equity accounted associates 78.0 51.5
Transfer to held for sale (1.6) -
Total investment in equity accounted associates (continued operations) 76.4 51.5
Profit and loss impact
2024 2023
€'m €'m
Share of loss in Galera - -
Share of profit in LSports - 2.1
Share of loss in NorthStar (3.6) (2.8)
Share of loss in Sporting News Holdings Limited (0.2) (0.2)
Total profit and loss impact (3.8) (0.9)
Balance sheet movement
LSports NorthStar Sporting Total
€'m €'m News €'m
Holdings
Limited
€'m
Balance as at 31 December 2023/1 January 2024 35.2 9.0 5.6 49.8
Transfer of fair value of the option on exercise 4.8 - - 4.8
Total consideration to acquire additional 18% shareholding (pre-dilution) 25.8 - - 25.8
Share of loss - (3.6) (0.2) (3.8)
Dividend income (0.2) - - (0.2)
Balance as at 31 December 2024 65.6 5.4 5.4 76.4
Caliplay
Background
During 2014, the Group entered into an agreement with Turística Akalli, S. A.
de C.V, which has since changed its name to Corporacion Caliente S.A. de C.V.
("Caliente"), the majority owner of Tecnologia en Entretenimiento Caliplay,
S.A.P.I. de C.V ("Caliplay"), which is a leading online betting and gaming
operator in Mexico which operates the "Caliente" brand in Mexico.
The Group made a €16.8 million loan to September Holdings B.V. (previously
the 49% shareholder of Caliplay), a company which is 100% owned by Caliente,
in return for a call option that would grant the Group the right to acquire
49% of the economic interest of Caliplay for a nominal amount (the "Playtech
Call Option").
During 2021, Caliplay redeemed its share at par from September Holdings, which
resulted in Caliente owning substantially all of the shares in Caliplay. The
terms of the existing structured agreement were varied, with the following key
changes:
• A new additional option (in addition to the Playtech Call Option)
was granted to the Group which allowed the Group to take up to a 49% equity
interest in a new acquisition vehicle should Caliplay be subject to a
corporate transaction - this additional option is only exercisable in
connection with a corporate transaction and therefore was not exercisable at
31 December 2024 or 31 December 2023 (the "Playtech M&A Call Option").
• Caliente received a put option which would require Playtech to
acquire September Holding Company B.V. for a nominal amount (the "September
Put Option"). This option has been exercised and the parties are in the
process of transferring legal ownership of September Holding Company B.V. to
the Group.
The Group has no equity holding in Caliplay and is currently providing
services to Caliplay including technical and general strategic support
services for which it receives income (including an additional B2B services
fee as described in Note 9). If either the Playtech Call Option or the
Playtech M&A Call Option is exercised, the Group would no longer be
entitled to receive the additional B2B services fee (and will cease to provide
certain related services) which for the year ended 31 December 2024 was
€80.6 million (2023: €111.7 million).
In addition to the above, from 1 January 2025, if there is a change of control
of Caliplay or any member of the Caliente group which holds a regulatory
permit under which Caliplay operates, each of the Group and Caliente shall be
entitled (but not obligated), within 60 days of the time of such change of
control, to require that the Caliente group redeems the Group's additional B2B
services fee or (if the Playtech Call Option had been exercised at that time)
acquires Playtech's 49% stake in Caliplay (together the "COC Option"). If such
change of control were to take place and the right to redeem/acquire were to
occur, this would extinguish the Playtech Call Option (to the extent not
exercised prior thereto) and the Playtech M&A Call Option. The COC option
was historically considered in the valuation of the Playtech M&A Option
(refer to Note 19C).
Finally, for 45 days after the finalisation of Caliplay's 2021 accounts,
Caliplay also had an option to redeem the Group's additional B2B services fee
or (if the Playtech Call Option had been exercised at that time) Caliente
would have the option to acquire Playtech's 49% stake in Caliplay
(together the "Caliente Call Option"). As per the public announcement made by
the Group on 6 February 2023, the Group was seeking a declaration from the
English Courts to obtain clarification on a point of disagreement between the
parties in relation to the Caliente Call Option. The Group believes the
Caliente Call Option has expired and referred to its expiry having taken place
in its interim report for the six-month period ended 30 June 2022, which was
published on 22 September 2022. If the Caliente Call Option was declared as
being exercisable and was exercised, this would extinguish the Playtech Call
Option and the Playtech M&A Call Option.
As per the public announcement made in September 2024, the Group agreed a
revised strategic agreement related to Caliplay. Under these revised terms,
Playtech will hold a 30.8% equity interest in Caliente Interactive, Inc.
("Cali Interactive"), which will be the new holding company of Caliplay,
incorporated in the United States and be entitled to receive dividends
alongside other shareholders in Cali Interactive. Playtech will also have the
right to appoint a Director to the Board of Cali Interactive. In the meantime,
there is an agreed standstill of all the existing legal proceedings between
Caliente, Caliplay and Playtech which were disclosed in the audited accounts
for the year ended 31 December 2023 and in Note 6 of these financial
statements (including the point of disagreement on the Caliente Call Option
above), and those proceedings will be dismissed in full once the revised
arrangements come into effect.
The revised arrangements are conditional upon Mexican antitrust approval. On
21 March 2025, the Group announced that all necessary approvals have been
received, and completion of the revised arrangements is scheduled to take
place on 31 March 2025. On closing of the revised arrangements, the Playtech
Call Option, the Caliente Call Option and the COC Option will cease to exist
and the Playtech M&A Call Option will have been exercised. Refer to Note
19C for further details.
Assessment of control and significant influence
As at 31 December 2024 and 2023 it was assessed that the Group did not have
control over Caliplay, because it does not meet the criteria of IFRS 10
Consolidated Financial Statements, paragraph 7 due to the following:
· Despite the Group previously having a nominated director on the
Caliplay board in 2020 and having consent rights on certain decisions (in each
case, removed in 2021), there was no ability to control the relevant
activities.
· The Playtech Call Option or the Playtech M&A Call Option, if
exercised, would result in Playtech having up to 49% of the voting rights and
would not result in Playtech having control.
· Whilst the Group currently does receive variable returns from its
strategic agreement, it does not have the power to direct relevant activities
so any variation cannot arise from such a power.
As at 31 December 2024 and 2023, the Group has significant influence over
Caliplay because it meets one or more of the criteria under IAS 28, paragraph
6 as follows:
· The standard operator revenue by itself is not considered to give
rise to significant influence; however, when combined with the additional B2B
services fee, this is an indicator of significant influence.
· The material transaction of the historical loan funding is also
an indicator of significant influence.
Accounting for each of the options
The Playtech Call Option was exercisable at 31 December 2024 and 31 December
2023, although it was still unexercised as at 31 December 2024. As the Group
has significant influence and the option is exercisable, the investment is
recognised as an investment in associate using the equity accounting method
which includes having current access to profits and losses. The cost of the
investment was previously deemed to be the loan given through September
Holdings of €16.8 million, which at the time was assessed under IAS 28,
paragraph 38 as not recoverable for the foreseeable future and part of the
overall investment in the entity.
In 2021, with the introduction of the September Put Option, the investment in
associate relating to the original Playtech Call Option was reduced to zero
and the €16.8 million original loan amount was determined by management to
be the cost of the new Playtech M&A Call Option and therefore fully offset
the balance of €16.8 million against the overall fair value movement of the
Playtech M&A Call Option (refer to part C of this Note).
The Playtech M&A Call Option is not currently exercisable (although it
will be amended, become exercisable and will be exercised in connection with
the closing of the revised strategic agreement) and therefore in accordance
with IAS 28, paragraph 14 has been recognised as derivative financial asset,
and disclosed separately under part C of this Note.
As per the judgement in Note 6, the Group did not consider it appropriate to
equity account for the share of profits as the current 100% shareholder is
entitled to any undistributed profits.
Below is the financial information of Caliplay:
31 December 31 December
2024 1 2023 1
€'m €'m
Current assets 191.8 215.0
Non-current assets 18.2 23.9
Current liabilities (204.5) (123.6)
Non-current liabilities - -
Equity 5.5 115.3
Revenue 863.7 759.4
Profit from continuing operations 36.3 58.8
Other comprehensive income, net of tax (20.5) 10.4
Total comprehensive income 15.8 69.2
1 The 2024 balances above have been extracted from Caliplay's draft
2024 financial statements.
The 2023 balances have been extracted from Caliplay's 2023 audited financial
statements.
Investment in ALFEA SPA
The Group has held 30.7% equity shares in ALFEA SPA since June 2018. At 31
December 2024, the Group's value of the investment in ALFEA SPA was €1.6
million (31 December 2023: €1.7 million). A share of loss of €0.1 million
was recognised in profit or loss within discontinued operations for the year
ended 31 December 2024 (2023: a share of profit of €0.1 million was
recognised in profit or loss within discontinued operations).The investment
was shown as held for sale as at 31 December 2024.
Investment in Galera
In June 2021, the Group entered into an agreement with Ocean 88 Holdings Ltd
(Ocean 88) (shareholder of Galera Gaming Group (together "Galera"), a company
registered in Brazil. Galera offers and operates online and mobile sports
betting and gaming (poker, casino, etc.) in Brazil. They will continue to do
so under the local regulatory licence, which was obtained and became effective
1 January 2025, when regulation went live in Brazil.
The Group's total consideration paid for the investment in Galera was $5.0
million (€4.2 million) in the year ended 31 December 2021, which was the
consideration for the option to subscribe and purchase from Galera an amount
of shares equal to 40% in Galera at nominal price.
In addition to the investment amount paid, Playtech made available to Galera a
line of credit up to $20.0 million. In 2022, an amendment was signed to the
original framework agreement to increase the credit line to $45.0 million. As
at 31 December 2024, an amount of €43.0 million, which is included in loans
receivable from related parties (refer to Note 33), has been drawn down (31
December 2023: €39.2 million). An amount of €1.4 million has been loaned
in the year ended 31 December 2024. The loan is required to be repaid to
Playtech prior to any dividend distribution to the current shareholders of
Galera. Galera repaid Playtech €1.5 million in the year ended 31 December
2024. The remainder of the year on year movement is additional interest
charged, as well as foreign exchange gain on retranslation of the loan, which
is denominated in US Dollars. The Group recognised an allowance for expected
credit losses (ECL) for this loan of €2.8 million at 31 December 2024
(2023: €1.6 million).
In respect of the loan receivable from Galera under this credit line, even
though the framework agreement does not state a set repayment term, management
has assessed that this should still be recognised as a loan as opposed to part
of the overall investment in associate in line with IAS 28. The Directors have
made a judgement that the loan will be settled from operational cash flows as
opposed to being settled as part of an overall transaction. The cost of the
investment was deemed to be the price paid for the option of $5.0 million
(€4.2 million), which was reduced to €Nil through the recognition of the
Group's share of losses as at 31 December 2022. The Galera Group continues to
be loss making as at 31 December 2024 and 31 December 2023.
On 6 November 2023, Ocean 88 acquired 60% of F12.bet. Playtech loaned Galera
the amount of $10.1 million (€9.5 million) for the acquisition of F12.bet.
As at 31 December 2024, this amount was €10.1 million and is included in
loans receivable from related parties (31 December 2023: €9.6 million)
(refer to Note 33). The loan is repayable within five years from the
disbursement date, in November 2028. The Group recognised an allowance for ECL
for this loan of €0.7 million as at 31 December 2024 (2023: €0.4
million).
On 15 May 2024, Playtech loaned an additional $10.0 million (€9.2 million)
to Galera to acquire 60% of Luva.bet. Luva.bet is a recently established
operator targeting the Brazilian market which commenced operations in April
2023. As at 31 December 2024, an amount of €9.5 million is included in loans
receivable from related parties (Note 33). The loan is repayable within five
years from the disbursement date, in May 2029. The Group recognised an
allowance for ECL for this loan of €0.6 million as at 31 December 2024.
On 6 December 2024, Playtech provided an additional credit facility of 70.0
million BRL (€11.0 million) to Galera to assist them in acquiring the Brazil
licenses. An amount of €9.2 million was withdrawn as at 31 December 2024 and
is included in loans receivable from related parties (Note 33). The loan is
repayable in November 2029. The Group recognised an allowance for ECL for this
loan of €0.6 million as at 31 December 2024.
An additional ECL percentage of 5% was recorded for all Galera loans at 31
December 2024 to reflect the risk that any operator faces at the verge of
regulation within a country. This includes risks related to system
integration, user experience, and compliance monitoring, which could result in
the loss of players due to operational disruptions, penalties, and loss of
licenses for Galera. The total ECL on Galera loans at 31 December 2024 is
€4.7 million (31 December 2023: €2.0 million).
The total outstanding loans to Ocean88 as at 31 December 2024 is €71.8
million (31 December 2023: €48.8 million), including interest.
Playtech has assessed whether it holds power to control Galera and it was
concluded that this is not the case. Even if the option is exercised,
it would only result in a 40% voting right over the operating entity and
therefore no control.
Under the agreement in place:
• the standard operator income to be generated from services
provided to Galera when combined with the additional B2B services fee, the
loan and certain other contractual rights, are all indicators of significant
influence; and
• the Group provides standard B2B services (similar to services
provided to other B2B customers) as well as additional services to Galera that
Galera requires to assist it in successfully running its operations, which
could be considered essential technical information.
Considering the above factors, the Group has significant influence under IAS
28, paragraph 6 over Galera.
As the option is currently exercisable and gives Playtech access to the
returns associated with the ownership interest, the investment is treated as
an investment in associate. Playtech's interest in Galera is accounted for
using the equity method in the consolidated financial statements. Galera is
currently loss-making. If the call option is exercised by Playtech, the Group
will no longer provide certain services and as such will no longer be entitled
to the additional B2B services fee. The additional B2B services fee was €Nil
in the year ended 31 December 2024 (2023: €Nil).
The cost of the investment was deemed to be the price paid for the option of
$5.0 million (€4.2 million), which was reduced to €Nil through the
recognition of the Group's share of losses.
Investment in LSports
Background
In November 2022, the Group acquired 15% of Statscore for €1.8 million,
making it a 100% subsidiary. Subsequently, the Group disposed of 100% of
Statscore to LSports Data Ltd (''LSports'') for €7.5 million, less a novated
inter-company loan of €1.6 million, resulting in a non-cash net
consideration of €5.9 million. Additionally, the Group acquired 31% of
LSports for €36.7 million, which included an option to acquire up to 18%
more shares. Of the total consideration, €29.2 million was paid in cash.
The Group exercised its option to acquire up to 49% (an additional 18%) of the
equity of LSports in September 2024, increasing their shareholding to 49%. The
Group paid LSports €18.9 million, calculated based on a valuation of LSports
at €115.0 million. Upon finalisation of LSports' annual audited financial
statements for the year ended 31 December 2024, an additional consideration of
€6.9 million, based on EBITDA multiplied by a factor of 7, was recorded as
deferred consideration and was paid in March 2025 (Note 38). Under IFRS 10,
paragraph 7, the Company does not have control over the investee despite being
the largest shareholder in LSports by holding 49% because the rest of the 51%
shareholders form a consortium by virtue of being related (Note 6).
LSports is a company whose principal activity is to empower sportsbooks and
media companies with the highest quality sports data on a wide range of
events, so they can build the best product possible for their business. The
company is based in Israel. The principal reason of the acquisition is the
attractive opportunity considered by Playtech to increase its footprint in the
growing sports data market segment.
Assessment of control and significant influence
As at the date of acquisition, 31 December 2024 and 2023, it was assessed that
the Group did not have control over LSports, because it does not meet the
criteria of IFRS 10 Consolidated Financial Statements, paragraph 7 due to the
following:
• despite the appointment and representation on the board of
directors by a Playtech employee as at 31 December 2024, there is still no
ability to control the relevant activities, as the total number of directors
including the Playtech appointed director is five;
• Playtech has neither the ability to change any members of the
board nor of the management of LSports; and
• as of 31 December 2024, despite Playtech's shareholding being 49%,
under IFRS 10, paragraph 7, the Group does not have control over LSports
because the other combined shareholding/voting power exceeds 50% and is
collectively held by family members.
Per the above assessment, Playtech does not hold power over the investee and
as such does not have control.
As at 31 December 2024 and 2023, the Group has significant influence over
LSports because it meets one or more of the criteria under IAS 28, paragraph
6, the main one being the Playtech employee appointed on the board of LSports,
enabling it to therefore participate in policy-making processes, including
decisions about dividends and/or other distributions. As a result of this
assessment, LSports has been recognised as an investment in associate.
Purchase Price Allocation (PPA)
The Group prepared an initial PPA following the acquisition of the investment
in 2022, where any difference between the cost of the investment and
Playtech's share of the net fair value of the LSports identifiable assets and
liabilities results in goodwill. Goodwill is not recognised separately but is
included as part of the carrying amount of the investment in associate.
The Group prepared an updated PPA in September 2024 upon acquiring the
additional 18% stake in LSports. The difference again resulted in goodwill,
included in the investment's carrying amount.
Details of Playtech's share of net fair value of the identifiable assets and
liabilities acquired are as follows:
Playtech's share
of net fair value
of the identifiable
assets and
liabilities acquired
2024
€'m
Net book value of assets acquired 3.7
Fair value of customer contracts and relationships 28.4
Fair value of technology - internally developed 23.4
Fair value of brand 4.8
Deferred tax arising on acquisition (4.3)
Total net assets 56.0
Resulting goodwill 14.0
The total share of profit recognised in profit or loss in the year ended 31
December 2024 from the investment is LSports was €Nil million (2023: €2.1
million). This includes the amortisation of intangibles and the release of the
deferred tax liability, arising from the original acquisition of the
investment and subsequent exercise of the option (2024: €2.9 million, 2023:
€2.1 million) and the share of the LSports profits (2024: €2.9 million,
2023: €4.2 million), with a corresponding entry against the investment in
associate on the consolidated balance sheet.
During 2024, the Group received a dividend of €0.2 million from LSports
(2023: €1.8 million), which reduced the investment in associate value in the
consolidated balance sheet.
Below is certain financial information of LSports:
31 December 31 December
2024 1 2023 1
€'m €'m
Current assets 9.5 10.9
Non-current assets 43.0 26.8
Current liabilities (8.7) (6.6)
Non-current liabilities (8.3) (2.3)
Equity 35.5 28.8
1 The 2024 and 2023 balances above have been extracted from LSport's
audited consolidated financial statements.
Investment in Stats International
Background
In January 2022, the Group provided a $2.3 million loan to Stats International
Limited ("Stats"), at an interest rate of 3.5% and a repayment date of 30 June
2024. As at 31 December 2024, the carrying value of the loan was €2.4
million and is included in loans receivable from related parties (Note 33)
(2023: €2.2 million).
The Stats group's business activities are focused on securing rights in
connection with sporting competitions and the exploitation of the same,
typically in exchange for the payment of certain fees and provision of
analytical and statistical services by the Stats group to the relevant
rightsholder. The initial focus of the Stats group is on Brazilian sports
competitions.
In May 2023, the Group and Stats signed an amended loan agreement which,
amongst other things, changed the repayment obligations such that the final
repayment date will be 31 December 2026 and the loan agreement will be novated
from Stats to Jewelrock (Stats' sole shareholder) in consideration of $1.
Moreover, a framework agreement was signed between Stats and Playtech whereby
Playtech, for a €1 consideration, has been granted the option to acquire
from Jewelrock 36% of the issued share capital of Stats.
Finally, Playtech entered into a service agreement whereby Playtech provides
Stats its business development and knowledge-sharing services in connection
with the operational and industry standard procedures of Stats in exchange for
additional B2B services fee as per Note 9. As the business is still a
start-up, the additional B2B services fee as at 31 December 2024 was €Nil
(2023: €Nil). Once the option is exercised, the Group would no longer
provide certain services and, as such, would no longer be entitled to the
additional B2B services fee.
The option may be exercised at any time but prior to the termination of all
sporting rights agreements. It shall also lapse on the expiry or termination
of the Playtech service agreement in accordance with its terms or at the
written election of Playtech.
Playtech has assessed whether it holds power to control the investee and it
was concluded that this is not the case. Even if the option is exercised, it
would only result in a 36% voting right over the operating entity and
therefore no control.
However, Playtech has assessed whether the Group has significant influence
over Stats and due to the existence of the service agreement whereby Playtech
would be assisting a start-up business by providing knowledge-sharing
services, these could be considered essential technical information.
Considering this, it was concluded that the Group has significant influence
under IAS 28, paragraph 6, over Stats.
The cost of the option, which was considered to be the inherent value of
Playtech allowing the loan repayment date to be extended, is considered
negligible. No share of profits/losses have been recognised as at 31 December
2024 in profit or loss as these were immaterial.
Investment in NorthStar
Background
NorthStar Gaming Inc. is a Canadian gaming brand incorporated in Ontario in Q4
2021. In Q2 2022, NorthStar received its license from the Alcohol and Gaming
Commission of Ontario (AGCO) and launched its online gaming site,
www.northstarbets.ca, offering regulated sports betting markets and a curated
casino experience. Playtech saw this as an opportunity to expand its presence
in the growing Canadian betting market.
In December 2022, the Group issued NorthStar a convertible loan of CAD 12.25
million, which could be converted into common shares, A warrants, and B
warrants upon the completion of a reverse takeover (RTO) transaction. Baden
Resources, listed on the TSX, agreed to acquire NorthStar through an RTO. The
loan's fair value as of 31 December 2022 was €8.4 million.
In March 2023, the RTO was completed, and Baden Resources was renamed
NorthStar Gaming Holdings ("NorthStar"). This triggered the automatic
conversion of the Group's loan into NorthStar common shares, which were then
exchanged for NorthStar common shares. The Group also received NorthStar
Warrants, exercisable at CAD 0.85 and CAD 0.90 per share, expiring on the
fifth anniversary of their issue.
In September 2023, the Group entered into a subscription agreement with
NorthStar, acquiring additional shares and warrants (exercisable at CAD 0.36
and CAD 0.40 per share) for CAD 5.0 million. This investment closed in October
2023, and Playtech also loaned NorthStar an 8% senior convertible debenture
for CAD 5.0 million.
As of 31 December 2024, Playtech owns approximately 25.8% of NorthStar's
issued and outstanding common shares (down from 27.5% as of 31 December 2023
following NorthStar's issue of new shares in June 2024). If the convertible
debenture is converted and all warrants are exercised, Playtech could
potentially increase its stake to over 40%.
The Group's convertible debenture has been classified at fair value through
profit or loss based on IFRS 9 criteria. As at 31 December 2024, an amount of
CAD 5.5 million (€3.6 million) is included in loans receivable from related
parties (31 December 2023: €3.4 million) (Note 33). The loan is required to
be repaid to Playtech by October 2026 or upon conversion (to the extent not
fully converted) once conversion criteria are met.
In April 2024, the Group signed a promissory note with NorthStar for the
amount of CAD 3.0 million (€2.1 million), which is included in current
assets as loans receivable from related parties. (Note 33). The principal and
the outstanding interest under the promissory note are required to be paid the
earliest of:
i. 12 months from April 2024,
ii. the date on which Playtech declares the Indebtedness to be
immediately due and payable following the occurrence of an event of default
(as defined in agreement between Playtech and NorthStar),
iii. the date on which NorthStar or any of its subsidiaries complete an
offering of debt or equity securities to one or more third parties that, when
aggregated with any other financing completed, results in gross proceeds to
NorthStar and its subsidiaries of at least CAD 10 million.
In September 2024 and December 2024 further promissory notes to the value of
CAD 3.0 million (€2.1 million) and CAD 3.5 million (€2.3 million)
respectively were issued to NorthStar to assist with its growth plans while
establishing more medium to long term financing, which are included in current
assets as loans receivable from related parties (Note 33). All three of these
promissory notes were repaid by NorthStar in January 2025 (Note 38).
The fair value of all of Playtech's warrants is €Nil as at 31 December 2024
(2023: €Nil) (refer to Note 19C).
Assessment of control and significant influence
As at 31 December 2024 and 2023, it was assessed that the Group did not have
control over NorthStar, because it does not meet the criteria of IFRS 10
Consolidated Financial Statements, paragraph 7 due to the following:
• despite representation on the NorthStar board of directors by
Playtech's CFO and one more Playtech employee at 31 December 2023 and 31
December 2024, there is still no ability to control the relevant activities,
as the total number of appointed directors is eight; and
• Playtech has neither the ability to change any other members of
the NorthStar board nor the management of NorthStar.
Per the above assessment, Playtech does not hold power over the investee and
as such does not have control.
As at 31 December 2024 and 2023, the Group has significant influence over
NorthStar because it meets one or more of the criteria under IAS 28, paragraph
6, the main one being that it has two appointed members sitting on the board
of NorthStar, enabling it to therefore participate in policy-making processes,
including decisions about dividends and/or other distributions. As a result of
this assessment NorthStar has been recognised as an investment in associate.
The NorthStar warrants are fair valued as per paragraph 14 of IAS 28 and shown
as a derivative financial asset in accordance with IFRS 9 (refer to Note 19C).
Purchase Price Allocation (PPA)
The Group prepared a PPA following the acquisition of the investment, where
any difference between the cost of the investment and Playtech's share of the
net fair value of NorthStar's identifiable assets and liabilities results in
goodwill.
Goodwill is not recognised separately but is included as part of the carrying
amount of the investment in associate. Up until October 2023, Playtech's
shareholding was diluted to 15% due to NorthStar issuing more shares as part
of an acquisition they completed in May 2023. Playtech's shareholding at 31
December 2024 was 25.8% (31 December 2023: 27.5%). Playtech's shareholding
decrease from 2023 to 2024 is due to NorthStar issuing more shares to new and
existing shareholders.
The total share of loss recognised in profit or loss in the year ended 31
December 2024 from the investment in NorthStar was €3.6 million (2023:
€2.8 million). This includes the amortisation of intangibles, arising on
acquisition, and the share of NorthStar's losses, with a corresponding entry
against the investment in associate on the consolidated balance sheet.
Investment in Sporting News Holdings Limited
Background
In August 2023, the Group acquired 12.6% of Sporting News Holdings Limited
("TSN"), for a total consideration of $6.3 million (€5.8 million).
TSN's principal activities are the sale of digital advertising and the
offering of media services, the provision of multimedia sports content across
internet-enabled digital platforms and the distribution directly to customers
and business clients around the world. The company is incorporated in the Isle
of Man. The principal reason of the acquisition is the attractive opportunity
considered by Playtech to increase its footprint in the growing sports and
media market segment.
Assessment of control and significant influence
As at the date of acquisition and at 31 December 2024 it was assessed that the
Group did not have control over TSN, because it does not meet the criteria of
IFRS 10 Consolidated Financial Statements, paragraph 7 due to the following:
• despite Playtech having the right to appoint a director on the TSN
board, as at 31 December 2024 and 31 December 2023, one had not yet been
appointed. Playtech has preferred to only appoint an observer to the board.
Moreover, once Playtech appoints a director, there is still no ability to
control the relevant activities, as the total number of directors including
potentially one Playtech appointed director will be five; and
• Playtech has neither the ability to change any members of the
board nor of the management of TSN.
Per the above assessment, Playtech does not hold power over the investee and
as such does not have control.
As at 31 December 2024, the Group has significant influence over TSN because
it meets one or more of the criteria under IAS 28, paragraph 6, the main one
being Playtech having the ability to appoint a member on the board of TSN,
enabling it to therefore participate in policy-making processes, including
decisions about dividends and/or other distributions. As a result of this
assessment TSN has been recognised as an investment in associate.
The cost of the investment was deemed to be the consideration paid for the
shares of $6.3 million (€5.8 million) in August 2023. The total share of
loss recognised in profit or loss in the year ended 31 December 2024 from the
investment in TSN was €0.2 million (2023: €0.2 million).
Other investments in associates that are fair valued under IFRS9 per IAS 28,
paragraph 14
The following are also investments in associates where the Group has
significant influence but where the option is not currently exercisable.
As there is no current access to profits, the relevant option is fair valued
under IFRS 9, and disclosed as derivative financial assets under part C
of this Note:
• Wplay;
• Tenbet (Costa Rica)
• Onjoc (Panama); and
• Tenlot El Salvador S.A. de C.V
The financial information required for investments in associates, other than
Caliplay and LSports, has not been included here as from a Group perspective
the Directors do not consider them to have a material impact jointly or
separately.
B. Other investments
Balance sheet
2024 2023
€'m €'m
Listed investments 11.1 15.8
Investment in Tenlot Guatemala - -
Investment in Tentech Costa Rica - -
Investment in Gameco - -
Investment in Hard Rock Digital 141.0 77.0
Total other investments 152.1 92.8
Statement of comprehensive income
2024 2023
€'m €'m
Profit and loss
Change in fair value of equity investments 51.1 (6.6)
Impairment of investment in Gameco (included in the impairment of financial - (1.3)
assets)
51.1 (7.9)
Other comprehensive income
Foreign exchange movement from equity investments held in a non-Euro 6.4 (2.6)
functional subsidiary
Listed investments
The Group has shares in listed securities, which includes new shares purchased
during the year for €1.8 million (2023: €14.3 million). The fair values of
these equity shares are determined by reference to published price quotations
in an active market. For the year ended 31 December 2024, the fair values of
these listed securities have decreased by €6.5 million (2023: increased by
€0.1 million).
Investment in Tenlot Guatemala
In 2020, the Group entered into an agreement with Tenlot Guatemala, a member
of the Tenlot Group. Tenlot Guatemala, which is in the lottery business in
Guatemala, commenced its activity in 2018.
The Group acquired a 10% equity holding in Tenlot Guatemala for a total
consideration of $5.0 million (€4.4 million) in 2020, which has been
accounted at fair value through profit or loss under IFRS 9.
The fair value of the equity holding as at 31 December 2024 and 31 December
2023 was €Nil because of changes to market conditions which led to changes
in its original business plans. The fair value of the equity holding has
decreased by €4.4 million to €Nil in the year ended 31 December 2023.
In addition, the Group was granted a 10% equity holding in Super Sports S.A.
at no additional cost. The Group also has an option to acquire an additional
80% equity holding in Super Sports S.A. If the option is exercised, the Group
would no longer provide certain services and, as such, would no longer be
entitled to the additional B2B services fee. The additional B2B services fee
was €Nil for the year ended 31 December 2024 (2023: €Nil). There are no
conditions attached to the exercise of the option.
The right of exercising the call option at any time and the acquisition of the
additional 80% in Super Sports S.A. give Playtech:
• power over the investee;
• exposure, or rights, to variable returns from its involvement with
the investee; and
• the ability to use its power over the investee to affect the
amount of the investor's returns.
It therefore satisfies all the criteria of control under IFRS 10, paragraph 7
and, as such, at 31 December 2024 Super Sports S.A. has been consolidated in
the consolidated financial statements of the Group, noting that this is not
material from a Group perspective.
Investment in Tentech Costa Rica
In 2020, the Group entered into an agreement in Costa Rica with the Tenlot
Group. The Group acquired a 6% equity holding in Tentech CR S.A., a member of
the Tenlot Group, for a total consideration of $2.5 million (€2.1 million).
Tentech CR S.A. sells printed bingo cards in accordance with article 29 of the
Law of Raffles and Lotteries of Costa Rica (CRC - Costa Rican Red Cross
Association).
The 6% equity holding in Tentech CR S.A. is accounted at fair value through
profit or loss under IFRS 9.
The fair value of the equity holding as at 31 December 2024 and 31 December
2023 was €Ni because of changes to market conditions which led to changes in
its original business plans. The fair value of the equity holding has
decreased by €2.3 million to €Nil in the year ended 31 December 2023.
Investment in Gameco
In 2021, the Group entered into a convertible loan agreement with GameCo LLC
("Gameco"), where it provided $4.0 million (€3.8 million) in the form of a
debt security with 8% interest. In December 2022, Gameco acquired Green Jade
Games and, subsequently, the Playtech debt was converted into equity shares,
representing a 7.1% interest in the newly formed group. Immediately prior to
the conversion, the loan was impaired by €3.0 million, and this has been
recognised in profit or loss in the prior year.
The 7.1% equity holding in the newly formed group was accounted at fair value
through profit or loss under IFRS 9 at 31 December 2022. As at 31 December
2024 and 2023, the fair value of the equity holding has been €Nil.
Investment in Hard Rock Digital
In March 2023, the Group invested $85.0 million (€79.8 million in March
2023, €77.0 million at 31 December 2023) in Hard Rock Digital (HRD) in
exchange for a small minority interest in a combination of equity shares and
warrants. HRD is the exclusive Hard Rock International vehicle for interactive
gaming and sports betting on a global basis and the primary vendor to the
Seminole Tribe of Florida (the "Seminole Tribe") for sports betting in the
State of Florida. During late 2023 and 2024 positive outcomes were received in
respect of claims made in both the Federal and Supreme Courts. Following this,
sports betting was re-launched in Florida by the Seminole Tribe.
The Group assessed whether the warrants met the definition of a separate
derivative as per IFRS 9. A financial instrument or other contract should have
all three of the following characteristics:
• its value changes in response to the change in a specified
interest rate, financial instrument price, commodity price, foreign exchange
rate, index of prices or rates, credit rating or credit index, or other
variable, provided, in the case of a non-financial variable, that the variable
is not specific to a party to the contract (sometimes called the
"underlying");
• it requires no initial net investment or an initial net
investment that is smaller than would be required for other types of contracts
that would be expected to have a similar response to changes in market
factors; and
• it is settled at a future date.
Management made a judgement that the warrants did not meet the definition of a
separate derivative asset as: (i) the value of the warrants is part of the
total investment and cannot be distinguished between the two and therefore the
value of the warrants was deemed to be equal to the equity shares value; and
(ii) the consideration was paid at the time of the transaction.
Furthermore, the equity investment did not meet the definition of held for
trading, as the investment was acquired for long-term investment purposes and
with no current intention for sale. The investment was therefore classified as
an investment held at fair value through profit or loss with initial and
subsequent recognition at fair value, with any subsequent gain/loss recognised
in profit or loss.
In the year ended 31 December 2024, the Group received a dividend of €3.1
million (2023: €Nil) from HRD, recognised in finance income.
Valuation
The Group has assessed the fair value of the investment at 31 December 2024 by
applying a DCF approach with a market exit multiple assumption to the two CGUs
within the investment. The discount rate and exit multiples used were within
the range of 19%-29% and 8.5x - 10.0x respectively. Due to the small minority
interest and the limited influence Playtech has over HRD, the Group included a
discount for lack of control of 10%, as well as a 15%-20% discount for lack of
marketability due to the shares not being publicly traded.
As at 31 December 2024, the fair value of the equity investment in HRD
increased to €141.0 million ($146.5 million). The difference of €64.0
million between the fair value at 31 December 2023 of €77.0 million and the
fair value at 31 December 2024 has been recognised as follows:
a. €57.6 million derived from the fair value increase of the equity
investment calculated using the DCF model in profit or loss for the period
ended 31 December 2024. The increase was mainly driven by the performance of
the business, positive developments in the regulatory environment which
primarily aided the relaunch of the Florida sports operations by the Seminole
Tribe in late 2023.
b. €6.4 million derived from the fair value increase due to the
exchange rate fluctuation of USD to EUR (as the equity investment is under a
foreign subsidiary of the Group whose functional currency is USD) in other
comprehensive income for the year ended 31 December 2024.
The Group will continue to monitor the development of the HRD business
including the wider regulatory landscape internationally, as well as in the
key operational states in the US which can impact the value of the equity
investment.
Sensitivity analysis
The assumptions and judgements made in the valuation of the equity investment
as at 31 December 2024 include the following sensitivities, noting that
factors and circumstances, for example regulatory changes, that may arise that
are outside the Group and HRD's control which could impact the option value
positively or negatively:
· A plus or minus shift of 5% to the discount rates used will
result in a fair value of the equity investment within the range of €127.1
million - €159.8 million.
· An increase or decrease of 2.0x on the 2029 exit multiple will
result in a fair value change of the equity investment within the range of
€124.7 million to €157.9 million.
· A 10% fluctuation in the revenue growth rate will result in a
fair value of the equity investment within the range of €105.9 million -
€190.6 million.
· A 10% fluctuation in the Adjusted EBITDA margin will result in a
fair value of the equity investment within the range of €130.0 million -
€152.6 million.
C. Derivative financial assets
Balance sheet
2024 2023
€'m €'m
Playtech M&A Call Option (Caliplay) 801.9 730.2
Wplay 84.7 88.0
Onjoc 3.4 3.1
Tenbet 0.4 1.7
Tenlot El Salvador S.A. de C.V 4.6 -
NorthStar warrants (Note 19A) - -
LSports (Note19A) - 4.8
Total derivative financial assets 895.0 827.8
Statement of comprehensive income impact
2024 2023
€'m €'m
Caliplay
Fair value change of Playtech M&A Call Option 26.1 180.9
Foreign exchange movement to profit or loss 45.6 (16.0)
Wplay
Fair value change in Wplay (9.0) (2.7)
Foreign exchange movement recognised in other comprehensive income 5.7 (2.8)
Onjoc
Fair value change in Onjoc 0.1 (5.3)
Foreign exchange movement recognised in other comprehensive income 0.2 (0.2)
Tenbet
Fair value change in Tenbet (1.3) (6.9)
Foreign exchange movement recognised in other comprehensive income - (0.3)
Tenlot El Salvador S.A. de C.V
Fair value change in Tenlot El Salvador S.A. de C.V - -
Foreign exchange movement recognised in other comprehensive income 0.1 -
LSports
Fair value change of call option (Note 19A) - 3.4
Total comprehensive income impact 67.5 150.1
Caliplay
The Playtech M&A Call Option is not currently exercisable and therefore in
accordance with IAS 28, paragraph 14 has been recognised as a derivative
financial asset and fair valued under IFRS 9.
As further disclosed in Note 19A, in September 2024 Playtech has signed a
revised strategic agreement in relation to Caliplay in which the Playtech
M&A Call Option currently held by Playtech would be amended so that on
exercise Playtech will receive a 30.8% equity interest in Caliente Interactive
Inc, Caliplay's newly incorporated US holding company. Exercise of the
amended Playtech M&A Call Option will occur in connection with closing of
the revised arrangements, with the 30.8% shareholding (the "Equity Right"),
being achieved after taking account of the rights of its service providers.
The completion of these revised arrangements, which were announced in
September 2024, was conditional upon Mexican antitrust approval, which was
received in March 2025, with closing now scheduled for 31 March 2025.
Furthermore, there is currently an agreed standstill of all current legal
proceedings between Caliente, Caliplay and Playtech, and those proceedings
will be dismissed in full once the revised arrangements come into effect.
Under the Equity Right scenario, Playtech will:
· no longer be entitled to the additional B2B services fee;
· have certain customary shareholder rights, including the right to
appoint a Director to the Board of Cali Interactive for so long as Playtech's
equity interest is at least 15% of Cali Interactive; and
· subject to available cash and applicable law, Playtech and all
other Cali Interactive stockholders will receive dividends, at least
quarterly, pursuant to an agreed dividend policy.
Whilst the resultant 30.8% shareholding on closing of the revised arrangements
is less than the 49% interest (before taking account of the rights of the
Playtech Group's service providers) which the Playtech Group would have held
in Caliplay were it to have exercised the existing Playtech M&A Call
Option, the Playtech Group was willing to accept this reduced interest in the
context of the terms of these revised arrangements taken as a whole which
include:
(i) the resultant settlement and dismissal of all legal
proceedings between Caliente, Caliplay and Playtech;
(ii) the receipt (and/or payment into escrow) of the
entirety of the outstanding fees owing to the Playtech Group;
(iii) Playtech holding shares in a newly incorporated US
holding company of Caliplay; and
(iv) the Caliente Call Option and the COC Option (and the
Playtech Call Option) ceasing to exist with the Playtech M&A Call Option
having been exercised.
At 31 December 2024, a key judgement was made that the Group is certain that
the revised arrangements with Caliplay would complete in H1 2025, and as such
only valued Playtech's 30.8% Equity Right.
As at 31 December 2023, the Group valued the existing Playtech M&A Option
using a DCF approach with a market exit multiple assumption. The Group also
made assumptions on the probability of a possible transaction that may be
completed on a number of exit date scenarios over a five-year period, until
December 2028. Management did not model a scenario of no exit as this was
considered highly remote. Finally, taking account of matters arising in the
period, Playtech included some probability weighted scenarios to consider the
impact of the COC Option as explained in part A of this Note, noting that the
probabilities assigned to this scenario were above zero but low.
Valuation
The Group has assessed the fair value of the Equity Right as at 31 December
2024 using the income approach, which estimates the value of the Equity Right
based on the value of the expected future cash flows generated by Caliplay.
The Group's view of a reasonable market participant base discount rate for the
31 December 2024 valuation is 1% higher than last year. However, as Playtech
was certain at 31 December 2024 that the revised arrangements will complete in
2025 and that therefore the legal proceedings will subsequently be dismissed,
the Group removed the additional company specific premium (of 5%) from the
discount rate used in the valuation as at 31 December 2023. The discount rate
used for the valuation of the Equity Right was 16% as at 31 December 2024
(2023: 20%).
The Group used a compound annual growth rate of 23.7% (2023: 17.0%) on revenue
over the forecasted cash flow period, an average Adjusted EBITDA margin of
23.5% (2023: 31.3%) and an exit multiple of 8.75x (2023: 7.7x). The change in
Adjusted EBITDA margin is due to changes in marketing strategies that impacted
2024 actuals and going forward into 2025 and beyond. The increase in the exit
EBITDA multiple is supported by the observed median EV/EBITDA multiple of the
publicly listed peers as at 31 December 2024 and share price increases.
Given the fact that under the revised arrangements related to Caliplay, the
Equity right will be 30.8%, the Group applied a 5% discount for lack of
control (DLOC) on the value of Playtech's indirect stake in Caliplay,
reflecting the fact that Playtech will not have control of Caliplay but it
will continue to have significant influence (Note 19A) with the ability to
appoint a director on the board and voting rights in proportion to its
shareholding. The Group also included an additional discount for lack of
marketability (DLOM) of 15% for the non- marketable equity right (2023:
10.0%). Furthermore, as part of the restructured arrangements, Playtech's
stake in Caliplay was adjusted to reflect the rights to Caliplay shares that a
service provider is entitled (currently also entitled to part of the value of
the Playtech M&A Call Option).
As at 31 December 2024, the fair value of the Playtech M&A Call Option was
$833.0 million (2023: $805.8 million) which converted to €801.9 million
(2023: €730.2 million). The year-on-year change in the fair value of the
Playtech M&A call option is a combination of an uplift from:
• the decrease in the discount rate to remove the 5% litigation risk
included in the discount rate as at 31 December 2023;
• the increase in the exit multiple as explained above;
• favourable movement in the USD to EUR foreign exchange rate;
• the roll forward of the valuation due to passage of time.
These were partially offset by:
• the change in methodology. In December 2023, the valuation was
based on an entitlement to 49% (pre share of service provider) of the equity
value on exercise of a call option (considering the impact of both the
Playtech M&A Call Option and the COC Option). Based on the revised
arrangements signed in September 2024, the equity stake to be held in Caliente
Interactive Inc. (Caliplay's newly incorporated US holding company) has
decreased to 30.8% (post share of service provider).
Sensitivity analysis
The assumptions and judgements made in the valuation of the derivative
financial asset as at 31 December 2024 include the following sensitivities,
noting that factors and circumstances may arise that are outside the Group's
control which could impact the option value:
• A different discount rate within the range of 11% to 21% will
result in a fair value of the derivative financial asset in the range of
€725.8 million - €889.5 million.
• A 5% fluctuation in the Adjusted EBITDA margin will result in
a fair value of the derivative financial asset within the range of €763.4
million - €840.4 million.
• A 10% fluctuation in the Adjusted EBITDA margin will result in
a fair value of the derivative financial asset within the range of €724.9
million - €878.9 million.
• A 5% fluctuation in the revenue growth rate will result in a
fair value of the derivative financial asset within the range of €715.2
million - €895.3 million.
• A 10% fluctuation in the revenue growth rate will result in a
fair value of the derivative financial asset within the range of €635.3
million - €997.3 million.
• A 1.0 fluctuation on the market exit multiple will result in a
fair value of the derivative financial asset within the range of €724.9
million - €878.9 million.
• If the incremental DLOM fluctuates by 5% (to 10% and 20%
instead of 15%) will result in a fair value of the derivative financial asset
within the range of €754.7 million - €849.1 million.
• If the incremental DLOC fluctuates by 5% (to 0% and 10%
instead of 5%) will result in a fair value of the derivative financial asset
within the range of €759.5 million - €844.2 million.
Wplay
In August 2019, Playtech entered into a structured agreement with Aquila
Global Group SAS ("Wplay"), which has a licence to operate online gaming
products and services in Colombia. Under the agreement, the Group provides
Wplay its technology products, where it receives standard operator revenue and
additional B2B services fee as per Note 9. The Group has no shareholding in
Wplay.
Playtech has a call option to acquire a 50% equity holding in the Wplay
business. As at 31 December 2024, the option exercise date was in February
2025 or earlier if an M&A event takes place, however management was in
active discussions with Wplay to further extend the option exercise date
pre-year end. The extension was signed in February 2025, and the option
exercise date was deferred to February 2026. For the call option valuation as
at 31 December 2024, Playtech assumed that the call option cannot be exercised
any date before February 2026. If the call option is exercised by Playtech,
the Group would no longer provide certain services and as such will no longer
be entitled to the additional B2B services fee. The additional B2B services
fee was €10.6 million for the year ended 31 December 2024 (2023: €1.2
million).
Assessment of control and significant influence
The Group assessed whether it holds power over the investee (in accordance
with IFRS 10, paragraph 7) with the following considerations:
• Playtech does not have the ability to direct Wplay's activities as
it has no voting representation on the executive committee or members of the
executive committee.
• Whilst they are not members on the executive committee, Playtech
has the ability to appoint and change both the COO and CMO who form part of
the management team (albeit this right has never been exercised). The COO and
the CMO are part of the wider management team but would not be able to control
the relevant activities of Wplay.
• If the option is exercised it would result in Playtech acquiring
50% of the voting rights of the operating entity and therefore would not
result in having control. Furthermore, as at 31 December 2024 and 31 December
2023, the option is not exercisable and therefore can be disregarded in the
assessment of power.
Per the above assessment Playtech does not hold power over the investee and as
such does not have control.
With regard to the assessment of significant influence, the following facts
were considered:
• Playtech has the right to appoint and remove the COO and CMO,
which is a potential indicator of significant influence given their relative
positions and involvement in the day-to-day operations of Wplay.
• The standard operator revenue is not considered to give rise to
significant influence. However, when combined with the additional B2B services
fee, this is an indicator of significant influence.
• The Group provides additional services to Wplay which Wplay
requires to assist it in successfully running its operations, which could be
considered essential technical information.
The Group therefore has significant influence under IAS 28, paragraph 6 over
Wplay. However, as the option is not currently exercisable, the Group has an
investment in associate but with no access to profits. As such, the option is
fair valued as per paragraph 14 of IAS 28 and shown as a derivative financial
asset in accordance with IFRS 9.
The Group has given two loans to Wplay, with an outstanding balance at 31
December 2023 of €1.3 million, included in loans receivable from related
parties (Note 33). The loans were repaid in 2024.
Valuation
The fair value of the option at 31 December 2024 has been estimated using a
DCF approach with a market exit multiple assumption. The Group used a discount
rate of 22% (2023: 22%), as well as a discount for illiquidity and control
until the expected Playtech exit date of February 2026 (used as an accounting
assumption solely for the purposes of valuing the Wplay option) (2023:
expected exit date of February 2025). The Group used a compound annual growth
rate of 7.1% (2023: 8.2%) over the forecasted cash flow period, an average
Adjusted EBITDA margin of 23.9% (2023: 28.5%) and an exit multiple of 10.4x
(2023: 10.2x). As part of the agreement, there is a lock-in mechanism that
contractually might prevent Playtech from selling the resulting shares,
however an assumption was made that if the exit date assumed in the model is
earlier, then both parties would be in agreement to this earlier exit point,
therefore no further discounts were applied post transaction. Furthermore,
Playtech's share in Wplay was adjusted to reflect the rights to shares that a
service provider has under its services agreement with the Group.
As at 31 December 2024, the fair value of the Wplay derivative financial asset
is €84.7 million. The difference of €3.3 million between the fair value at
31 December 2023 of €88.0 million and the fair value at 31 December 2024 has
been recognised as follows:
a. €9.0 million derived from the fair value decrease of the derivative
call option calculated using the DCF model in profit or loss for the year
ended 31 December 2024. The decrease was due to downgrading of forecasts
because of the depreciation of USD against COP by 14% from 31 December 2023 to
31 December 2024 and offset by the increase in the exit multiple.
b. €5.7 million derived from the fair value increase due to the
exchange rate fluctuation of USD to EUR (as the derivative call option is
under a foreign subsidiary of the Group whose functional currency is USD) in
other comprehensive income for the year ended 31 December 2024.
In February 2025, the Colombian government implemented a temporary 19% VAT on
online gambling deposits starting on 22 February 2025. The temporary tax will
be in place for 90 days, with the option of two extensions, each also 90 days
long. The tax reform bill, including the 19% VAT, was still under discussion
and had not been approved by Congress as at 31 December 2024. Playtech,
through advice also concluded that it would be unlikely that the bill around
the 19% VAT would be passed, especially since it has been on the agenda for
several years. As such it was not considered for purposes of valuing the Wplay
option at 31 December 2024, and will be assessed as part of the valuation at
30 June 2025, noting that it could have a material impact on the value
disclosed at 31 December 2024.
Sensitivity analysis
The assumptions and judgements made in the valuation of the derivative
financial asset as at 31 December 2024 include the following sensitivities,
noting that factors and circumstances may arise that are outside the Group's
control which could impact the option value:
• A different discount rate within the range of 17% to 27% will
result in a fair value of the derivative financial asset in the range of
€72.6 million - €99.8 million.
• If the expected Playtech exit date is extended by one year, the
fair value of the derivative financial asset will decrease to €75.8 million.
• A 5% fluctuation in the Adjusted EBITDA margin will result in a
fair value of the derivative financial asset within the range of €80.8
million - €88.6 million.
• A 10% fluctuation in the Adjusted EBITDA margin will result in a
fair value of the derivative financial asset within the range of €77.0
million - €92.4 million.
• A 5% fluctuation in the revenue growth rate will result in a fair
value of the derivative financial asset within the range of €80.1 million -
€89.3 million.
• A 10% fluctuation in the revenue growth rate will result in a fair
value of the derivative financial asset within the range of €75.6 million -
€94.0 million.
• A 1.0 fluctuation on the market exit multiple will result in a
fair value of the derivative financial asset within the range of €78.8
million - €90.6 million.
Onjoc
In June 2020, Playtech entered into a framework agreement with ONJOC CORP.
("Onjoc"), which holds a licence to operate online sports betting, gaming and
gambling activities in Panama. The Group has no equity holding in Onjoc but
has an option to acquire 50%. Under the agreement the Group provides Onjoc its
technology products, where it receives standard operator revenue and
additional B2B services fee as per Note 9. If the option is exercised, the
Group would no longer provide certain services and, as such, would no longer
be entitled to the additional B2B services fee. The additional B2B services
fee was €Nil in the year ended 31 December 2024 and 2023. The option can be
exercised any time subject to Onjoc having $15.0 million of Gross Gaming
Revenue (GGR) over a consecutive 12-month period.
Assessment of control and significant influence
The Group performed an analysis for Onjoc to assess whether it holds power
over Onjoc (in accordance with IFRS 10, paragraph 7) with the following
considerations:
• Playtech can propose an independent member to the board of
directors, who has to be independent to both Playtech and Onjoc, and as such
does not have the ability to direct Onjoc's activities as it has no voting
representation on the board;
• Playtech has the right to propose the COO, CTO and CMO, which
although would form part of the wider management team, would not be able to
control the relevant activities of Onjoc by themselves; and
• if the option is exercised it would result in Playtech acquiring
50% of the voting rights of the operating entity and therefore would not
result in having control. Furthermore, as at 31 December 2024 and 31 December
2023, the option is not exercisable and therefore can be disregarded in the
assessment of power.
Per the above assessment Playtech does not hold power over the investee and as
such does not have control.
Regarding the assessment of significant influence, the following facts were
considered:
• Playtech can propose an independent member to the board of
directors and has the right to propose the COO, CTO and CMO, which are
potential indicators of significant influence given their relative positions
and the involvement in day-to-day operations of Onjoc;
• the standard operator revenue is not considered to give rise to
significant influence. However, when combined with the additional B2B services
fee, this is an indicator of significant influence; and
• the Group provides additional services to Onjoc which Onjoc
requires to assist it in successfully running its operations which could be
considered essential technical information.
The Group therefore has significant influence under IAS 28, paragraph 6 over
Onjoc. However, as the option is not currently exercisable, the Group has an
investment in associate but with no access to profits. As such, the option is
fair valued as per paragraph 14 of IAS 28 and shown as a derivative financial
asset in accordance with IFRS 9. The Group has given an interest-bearing loan
to Onjoc of €3.3 million (2023: €2.3 million) which is due for repayment
in December 2027 and is included in loans receivable from related parties
(refer to Note 33).
Valuation
The fair value of the option at 31 December 2024 has been estimated using a
DCF approach with a market exit multiple assumption. The Group used a discount
rate of 34% (2023: 32%) reflecting the cash flow risk given the high growth
rates in place and the early stages of the business, as well as a discount for
illiquidity and control until the expected Playtech exit date of December 2028
(2023: expected exit date of December 2027). The Group used a compound annual
growth rate of 29.0% (2023: 49.2%) over the forecasted cash flow period and an
average Adjusted EBITDA margin of 21.3% (2023: 24.2%). As part of the
agreement, there is a lock-in mechanism that contractually might prevent
Playtech from selling the resulting shares, however an assumption was made
that if the exit date assumed in the model is earlier, then both parties would
be in agreement to this earlier exit point, therefore no further discounts
applied post transaction. Furthermore, Playtech's share in Onjoc was adjusted
to reflect the rights to shares that a service provider has under its services
agreement with the Group.
As at 31 December 2024, the fair value of the Onjoc derivative financial asset
is €3.4 million. The difference of €0.3 million between the fair value at
31 December 2023 of €3.1 million and the fair value at 31 December 2024 has
been recognised as follows:
a. €0.1 million derived from the fair value increase of the derivative
call option calculated using the DCF model in profit or loss in the year ended
31 December 2024. This increase is mostly due to the assumed exercise date
getting closer in 31 December 2024 than 31 December 2023 and the further 12
months roll forward of the valuation period.
b. €0.2 million derived from the fair value increase from the exchange
rate fluctuation of USD to EUR (as the derivative call option is under a
foreign subsidiary of the Group whose functional currency is USD) in other
comprehensive income in the year ended 31 December 2024.
Sensitivity analysis
The assumptions and judgements made in the valuation of the derivative
financial asset as at 31 December 2024 include the following sensitivities,
noting that factors and circumstances may arise that are outside the Group's
control which could impact the option value:
• A different discount rate within the range of 29% to 39% will
result in a fair value of the derivative financial asset in the range of
€2.9 million - €4.0 million.
• A 5% fluctuation in the Adjusted EBITDA margin will result in a
fair value of the derivative financial asset within the range of €3.2
million - €3.6 million.
• A 10% fluctuation in the Adjusted EBITDA margin will result in a
fair value of the derivative financial asset within the range of €3.0
million - €3.8 million.
• A 5% fluctuation in the revenue growth rate will result in a
fair value of the derivative financial asset within the range of €2.7
million - €4.1 million.
• A 10% fluctuation in the revenue growth rate will result in a
fair value of the derivative financial asset within the range of €2.1
million - €4.8 million.
• A 1.0 fluctuation on the market exit multiple will result in a
fair value of the derivative financial asset within the range of €2.8
million - €3.9 million.
Tenbet Costa Rica
In addition to the 6% equity holding in Tentech CR S.A as per section B of
this Note, the Group has an option to acquire 81% equity holding in Tenbet.
Tenbet, which is another member of the Tenlot Group, operates online bingo
games and casino side games. Playtech provides certain services to Tenbet in
return for its additional B2B services fee. The Group has no equity holding in
Tenbet but has an option to acquire 81% equity. If the option is exercised,
the Group would no longer provide certain services to Tenbet and, as such,
would no longer be entitled to the additional B2B services fee. The additional
B2B services fee was €Nil in the year ended 31 December 2024 and 31 December
2023. In H1 2023, the Group signed an amendment to the Tenbet agreement in
which the option can be exercised at any time from July 2024 (previously 35
months of Tenbet going live). In H2 2023, the Group signed an amendment to the
Tenbet agreement in which the option can be exercised at any time from 1
January 2025 based on the condition that Tenbet has generated at least once,
prior to the exercise, accumulative GGR (as defined in the agreement) of at
least $10.0 million, in a consecutive 12-month period. Based on the business
plan used for the DCF valuation, the accumulative GGR is not expected to be
met before 31 December 2027.
The Group has given an interest-bearing loan to Tenbet of €6.0 million
(2023: €4.2 million) which is due for repayment in December 2029 and is
included in loans receivable from related parties (refer to Note 33).
Assessment of control and significant influence
The Group assessed whether it holds power over Tenbet (in accordance with IFRS
10, paragraph 7) with the following considerations:
• Playtech does not have the ability to direct Tenbet's activities
as it has no voting representation on the board of directors (or equivalent)
or people in managerial positions;
• Playtech has neither the ability to appoint, nor change, any
members of the board of Tenbet; and
• as at 31 December 2024 and 31 December 2023, the option is not
exercisable and therefore can be disregarded in the assessment of power.
Per the above assessment, Playtech does not hold power over the investee and
as such does not have control.
With regard to the assessment of significant influence, the standard operator
revenue alone is not considered to give rise to significant influence.
However, when combined with the additional B2B services fee, this is an
indicator of significant influence. Furthermore, the Group provides additional
services to Tenbet which Tenbet requires to assist it in successfully running
its operations that could be considered essential technical information.
Playtech therefore has significant influence under IAS 28, paragraph 6 over
Tenbet. However, as the option is not currently exercisable, the Group has an
investment in associate but with no access to profits. As such, the option is
fair valued as per paragraph 14 of IAS 28 and shown as a derivative financial
asset in accordance with IFRS 9.
Valuation
The fair value of the option at 31 December 2024 has been estimated using a
DCF approach with a market exit multiple assumption. The Group used a discount
rate of 34% (2023: 33%) reflecting the cash flow risk given the high growth
rates in place and the early stages of the business, as well as a discount for
illiquidity and control until the expected Playtech exit date of December 2028
(2023: expected exit date of December 2028). The Group used a compound annual
growth rate of 91.4% (2023: 96.2%) over the forecasted cash flow period and an
average Adjusted EBITDA margin of 1.1% (2023: average of 0.9%). As part of the
agreement, there is a lock-in mechanism that contractually might prevent
Playtech from selling the resulting shares, however an assumption was made
that if the exit date assumed in the model is earlier, then both parties would
be in agreement to this earlier exit point. Furthermore, Playtech's share in
Tenbet was adjusted to reflect the rights to shares that a service provider
has under its services agreement with the Group.
As at 31 December 2024, the fair value of the Tenbet derivative financial
asset is €0.4 million, with the €1.3 million decrease from the fair value
of €1.7 million at 31 December 2023 recognised in profit or loss for the
year ended 31 December 2024, primarily due to downgraded cash flow forecasts
based on Tenbet's current performance, calculated using the DCF.
Tenlot El Salvador S.A. de C.V
During 2024, the Group entered into a new structured agreement with Tenlot El
Salvador S.A. de C.V. (Tenlot El Salvador), which has a license to operate
online betting and gaming on behalf the national lottery of El Salvador. Under
the agreement the Group will provide Tenlot El Salvador its technological
platform, as well as operational and other related services, where it will
receive in return standard operator revenue and additional B2B services fee as
per Note 9. The additional B2B services fee was
€Nil in the year ended 31 December 2024.The Group has no shareholding in
Tenlot El Salvador.
Under the structured agreement, Playtech has paid Tenlot El Salvador an amount
of $3.3 million with an additional $1.3 million to be paid in instalments upon
certain conditions being met, in exchange for an option to acquire 70% of the
shares in Tenlot El Salvador. The option can be exercisable at any time after
18 months from February 2024 subject to Tenlot El Salvador generating at least
once prior to the exercise, a cumulative gross gaming revenue of at least
$10.0 million in any consecutive period of 12 months.
Playtech also made available to Tenlot El Salvador a $5.5 million line of
credit out. As at 31 December 2024, an amount of $0.5 million was withdrawn.
The carrying amount of the loan is €0.5 million as of 31 December 2024 and
is included in loans receivable from related parties (refer to Note 33).
Assessment of control and significant influence
The Group assessed whether it holds power over Tenlot El Salvador (in
accordance with IFRS 10, paragraph 7) with the following considerations:
• Playtech does not have the ability to direct Tenlot El Salvador's
activities as it has no voting representation on the board of directors (or
equivalent) or people in managerial positions;
• Playtech has neither the ability to appoint, nor change, any
members of the board of Tenlot El Salvador; and
• as at 31 December 2024, the option is not exercisable and
therefore can be disregarded in the assessment of power.
Per the above assessment, Playtech does not hold power over the investee and
as such does not have control.
Regarding the assessment of significant influence, the standard operator
revenue alone is not considered to give rise to significant influence.
However, when combined with the additional B2B services fee, this is an
indicator of significant influence. Furthermore, the Group will provide
additional services to Tenlot El Salvador which Tenlot El Salvador requires to
assist it in successfully running its operations that could be considered
essential technical information. Playtech therefore has significant influence
under IAS 28, paragraph 6 over Tenlot El Salvador. However, as the option is
not currently exercisable, the Group has an investment in associate but with
no access to profits. As such, the option is fair valued as per paragraph 14
of IAS 28 and shown as a derivative financial asset in accordance with IFRS 9.
Valuation
As at 31 December 2024, the fair value of the Tenlot El Salvador derivative
financial asset is €4.6 million. Since the date the derivative was acquired
until 31 December 2024, there have been no changes in the operations of Tenlot
El Salvador that would indicate that the fair value of the derivative
financial asset would be different to the original arm's length price payable
of $4.8 million (€4.5 million).
The difference of €0.1 million between the fair value at acquisition and the
fair value at 31 December 2024 is derived from the fair value increase from
the exchange rate fluctuation of USD to EUR (as the derivative call option is
under a foreign subsidiary of the Group whose functional currency is USD) in
other comprehensive income in the year ended 31 December 2024.
Note 20 - Other non-current assets
2024 2023
€'m €'m
Security deposits 2.5 4.3
Guarantee for gaming licences 2.1 2.2
Prepaid costs relating to Sun Bingo contract 56.2 58.7
Loans receivable (net of ECL) 3.4 3.1
Loans receivable from related parties (net of ECL) (Note 33) 82.5 58.5
Other receivables 0.3 10.2
147.0 137.0
The movement of loans and interest receivable is as follows:
€'m
Balance as at 1 January 2024 63.3
Net loans granted/repaid 25.3
Non-cash loans granted (transfer from trade receivables) 1.0
Interest charge for the year 3.3
ECL (2.6)
Foreign exchange movements 2.9
Balance as at 31 December 2024 93.2
Split to:
Non-current assets 85.9
Current assets (Note 22) 7.3
93.2
Note 21 - Trade receivables
2024 2023
€'m €'m
Trade receivables 85.4 109.9
Related parties (Note 33) 56.2 99.1
Trade receivables - net 141.6 209.0
Split to:
Non-current assets - 1.9
Current assets 141.6 207.1
141.6 209.0
Note 22 - Other receivables
2024 2023
€'m €'m
Prepaid expenses 21.4 23.3
VAT and other taxes 14.2 14.8
Security deposits for regulators - 24.4
Prepaid costs relating to Sun Bingo contract 4.5 4.4
Receivable for legal proceedings and disputes1 - 16.4
Loans receivable (net of ECL) 0.9 0.5
Loans receivable from related parties (net of ECL) (Note 33) 6.4 1.2
Other receivables from related parties (Note 33) 0.3 0.3
Other receivables 4.8 15.2
Caliplay - funds held in escrow (Note 6) 33.3 -
85.8 100.5
1 Receivable for legal proceedings and disputes relates to funds held
in escrow, in relation to a historical and ongoing legal matter. The
corresponding liability is included under gaming and other taxes. The funds
will be released when the case is finally settled, in accordance with the
escrow agreement. At 31 December 2024 this was included in assets held for
sale.
Note 23 - Cash and cash equivalents
Cash and cash equivalents for the purposes of the statement of cash flows
comprises:
2024 2023
€'m €'m
Continuing operations
Cash at bank 268.5 516.6
Treated as held for sale
Cash at bank 185.9 -
Cash and cash equivalents in the statement of cash flows 454.4 516.6
Less: expected credit loss (Note 35A) (0.4) (0.4)
454.0 516.2
Out of the total cash at bank (from continuing operations and treated as held
for sale), an amount of €6.2 million was held by payment processors as at 31
December 2024 (2023: €9.4 million). Of this, €4.8 million relates to cash
included in held for sale.
The total cash held on behalf of operators comprises of the following
balances:
2024 2023
€'m €'m
Continuing operations
Funds attributed to jackpots 76.7 81.1
Security deposits 23.1 29.9
Players' balances1 2.5 41.9
102.3 152.9
Treated as held for sale
Funds attributed to jackpots 5.9 -
Security deposits 7.2 -
Players' balances1 33.7 -
46.8 -
1 The player balances are held in segregated bank accounts in line with
licensing requirements.
Note 24 - Assets held for sale
2024 2023
€'m €'m
Assets
A. Property, plant and equipment - 19.3
B. Snaitech B2C CGU 1,058.6 -
C. HAPPYBET CGU 2.8 -
D. Poker Strategy 5.0 -
1,066.4 19.3
A. During 2021, the Group entered into a binding agreement for the
disposal of a real estate area in Milan for a total consideration of €20.0
million. Accordingly, the real estate was classified as held for sale. Of the
total consideration, €1.0 million was received during the year ended
31 December 2021. The advance received was classified as part of the
liabilities directly associated with assets classified as held for sale. The
sale has been finalised but the disposal is expected to complete in H1 2025
with the movement of the trot track from La Maura area to San Siro
(previously it was expected that the sale would be completed during 2024).The
balance at 31 December 2024 is now included in the Snaitech B2C CGU as part of
the overall asset held for sale group.
B. On 17 September 2024, the Group entered into an agreement for the
disposal of the Snaitech B2C segment for a cash consideration of €2,300
million. Completion of the sale, which is subject to certain conditions
including relevant antitrust, gaming and other regulatory authority approvals,
is currently expected by Q2 2025.
In this respect, the results of this CGU are presented as discontinued
operations in the consolidated statement of profit or loss and the
comparatives have been restated to show the discontinued operation separately
from the continuing operations.
The total major class of assets and liabilities of Snaitech B2C CGU classified
as held for sale as at 31 December 2024, are as follows:
€'m
Assets
Property, plant and equipment 288.8
Right of use assets 32.4
Intangible assets 409.8
Investment in associates 1.6
Trade receivables 81.1
Inventory 0.6
Other receivables 63.2
Cash and cash equivalents 181.1
Assets classified as held for sale 1,058.6
Liabilities
Deferred tax liability 143.6
Trade payables 25.8
Progressive operators' jackpots and security deposits 12.9
Client funds 33.2
Income tax payable 43.3
Gaming and other taxes payable 106.0
Lease liability 34.5
Deferred revenues 0.9
Contingent consideration 2.0
Provisions for risks and charges 8.2
Other payables 91.5
Liabilities directly associated with the asset classified as held for sale 501.9
C. The total major class of assets and liabilities of HAPPYBET CGU
classified as held for sale as at 31 December 2024, are as follows:
€'m
Assets
Trade receivables and other receivables 2.3
Cash and cash equivalents 4.8
Provision against assets held for sale (4.3)
Assets classified as held for sale 2.8
Liabilities
Trade payables 0.4
Progressive operators' jackpots and security deposits 0.2
Client funds 0.5
Gaming and other taxes payable 0.3
Lease liability 0.2
Provisions for risks and charges 0.5
Other payables 0.7
Liabilities directly associated with the asset classified as held for sale 2.8
D. By the end of the year, the Group was in discussion for the sale of
the business and assets comprising PokerStrategy.com. The negotiations as at
31 December 2024 were at an advance stage and close to the finalization of the
agreement and at that point, it was expected to complete beginning of 2025. In
this respect, the assets and liabilities of PokerStrategy.com were classified
as held for sale.
Based on the agreement, the consideration for the transfer of the business and
assets is $6.1 million (€5.9 million), out of which $0.5 million (€0.5
million) was received before the end of the year by a way of a non-refundable
deposit which was classified as part of the liabilities directly associated
with assets shown as held for sale. The agreement was finalised in January
2025, with an estimated profit on disposal of €0.9 million, which will be
recognised in the year ending 31 December 2025.
Note 25 - Shareholders' equity
A. Share capital
Share capital is comprised of no par value shares as follows:
2024 2023
Number Number
of shares of shares
Authorised1 N/A N/A
Issued and paid up 309,294,243 309,294,243
1 The Company has no authorised share capital, but the Directors are
authorised to issue up to 1,000,000,000 shares of no par value.
The table below shows the movement of the shares:
Shares in issue/ Treasury shares Shares held by Total
circulation EBT
Number of shares
At 1 January 2023 300,988,316 2,937,550 5,368,377 309,294,243
Transfer from treasury shares to EBT - (2,937,550) 2,937,550 -
Exercise of options 3,704,491 - (3,704,491) -
At 31 December 2023/1 January 2024 304,692,807 - 4,601,436 309,294,243
Exercise of options 2,531,953 - (2,531,953) -
At 31 December 2024 307,224,760 - 2,069,483 309,294,243
B. Employee Benefit Trust
In 2014, the Group established an Employee Benefit Trust by acquiring
5,517,241 shares for a total of €48.5 million.
In 2021, the Company transferred 7,028,339 shares held by the Company in
treasury to the Employee Benefit Trust for a total of €22.6 million.
In 2023, the Company transferred 2,937,550 shares held by the Company in
treasury to the Employee Benefit Trust for a total of €12.5 million.
During the year ended 31 December 2024, 2,531,953 shares (2023: 3,704,491)
were issued at a cost of €9.1 million (2023: €11.9 million). As at
31 December 2024, a balance of 2,069,483 shares (2023: 4,601,436 shares)
remains in the EBT with a cost of €8.7 million (2023: €17.8 million).
C. Share options exercised
During the year 2,685,843 (2023: 3,880,633) share options were exercised, of
which 153,890 were cash settled (2023: 176,142).
D. Distribution of dividends
During 2024 the Group did not pay any dividends.
E. Reserves
The following describes the nature and purpose of each reserve within owners'
equity:
Reserve Description and purpose
Additional paid in capital Share premium (i.e. amount subscribed for share capital in excess of nominal
value)
Employee Benefit Trust Cost of own shares held in treasury by the trust
Foreign exchange reserve Gains/losses arising on retranslating the net assets of overseas operations
Employee termination indemnities Gains/losses arising from the actuarial remeasurement of the employee
termination indemnities
Non-controlling interest The portion of equity ownership in a subsidiary not attributable to the owners
of the Company
Retained earnings Cumulative net gains and losses recognised in the consolidated statement of
comprehensive income
F. Non-controlling interest
During the year the Group acquired 48.32% of the shares in Mix Zone Ltd
("MixZone"), however the Group assessed that it has control over MixZone in
accordance with IFRS10 Consolidated Financial Statements and therefore Mixzone
has been consolidated in the results of the Group for the year ended 31
December 2024. In this respect, a non-controlling interest is recognised from
the date of the acquisition.
Note 26 - Loans and borrowings
The main credit facility of the Group is a revolving credit facility (RCF) up
to €277.0 million and is available until October 2025, with an option to
extend by 12 months. Interest payable on the loan is based on SONIA depending
on the currency of each withdrawal. As at the reporting date the credit
facility drawn amounted to €Nil (2023: €Nil).
Under the RCF, the covenants are monitored on a regular basis by the finance
department, including modelling future projected cash flows under a number of
scenarios to stress-test any risk of covenant breaches, the results of which
are reported to management and the Board of Directors. The covenants are as
follows:
• Leverage: Net Debt/Adjusted EBITDA to be less than 3.5:1 for the
year ended 31 December 2024 (2023: less than 3.5:1).
• Interest cover: Adjusted EBITDA/Interest to be over 4:1 for the
year ended 31 December 2024 (2023: over 4:1).
As at 31 December 2024 and 2023 the Group met these financial covenants.
Note 27 - Bonds
2018 Bond 2019 Bond 2023 Bond Total
€'m €'m €'m €'m
At 1 January 2023 199.6 348.0 - 547.6
Repayment of bonds (200.0) - - (200.0)
Issue of new bond - - 297.2 297.2
Release of capitalised expenses 0.4 0.6 0.3 1.3
At 31 December 2023/1 January 2024 - 348.6 297.5 646.1
Repayment of bonds - (200.0) - (200.0)
Release of capitalised expenses - 1.0 0.6 1.6
At 31 December 2024 - 149.6 298.1 447.7
2024 2023
€'m €'m
Split to:
Non-current 447.7 646.1
Current - -
447.7 646.1
Bonds
(a) 2018 Bond
On 12 October 2018, the Group issued €530.0 million of senior secured notes
(the "2018 Bond") maturing in October 2023. The net proceeds of issuing the
2018 Bond after deducting commissions and other direct costs of issue totalled
€523.4 million.
Commissions and other direct costs of issue have been offset against the
principal balance and are amortised over the period of the 2018 Bond.
The issue price was 100% of its principal amount and bears interest from 12
October 2018 at the rate of 3.75% per annum payable semi-annually, in arrears,
on 12 April and 12 October commencing on 12 April 2019.
During the year ended 31 December 2022, the Group made a partial repayment
towards the 2018 Bond of €330.0 million. It was fully repaid in 2023.
(b) 2019 Bond
On 7 March 2019, the Group issued €350.0 million of senior secured notes
(the "2019 Bond") maturing in March 2026. The net proceeds of issuing the 2019
Bond after deducting commissions and other direct costs of issue totalled
€345.7 million.
Commissions and other direct costs of issue have been offset against the
principal balance and are amortised over the period of the 2019 Bond.
The issue price is 100% of its principal amount and bears interest from 7
March 2019 at a rate of 4.25% per annum payable semi-annually, in arrears, on
7 September and 7 March commencing on 7 September 2019.
During the year, the Group made a partial repayment towards the 2019 Bond of
€200.0 million.
(c) 2023 Bond
On 28 June 2023, the Group issued €300.0 million of senior secured notes
(the "2023 Bond") maturing in June 2028. The net proceeds of issuing the 2023
Bond after deducting commissions and other direct costs of issue totalled
€297.2 million.
Commissions and other direct costs of issue have been offset against the
principal balance and are amortised over the period of the 2023 Bond.
The issue price is 100% of its principal amount and bears interest from 28
June 2023 at a rate of 5.875% per annum payable semi-annually, in arrears, on
28 December and 28 June commencing on 28 December 2023.
As at 31 December 2024 and 2023, the Group met the required interest cover
financial covenant of 2:1 Adjusted EBITDA/Interest ratio, for the combined
2018, 2019 and 2023 Bonds.
Note 28 - Provisions for risks and charges, litigation and contingent
liabilities
The Group is involved in proceedings before civil and administrative courts,
and other legal or potential legal actions related to its business, including
certain matters related to previous acquisitions. Based on the information
currently available, and taking into consideration the existing provisions for
risks, the Group currently considers that such proceedings and potential
actions will not result in an adverse effect upon the financial statements;
however, where this is not considered to be remote, they have been disclosed
as contingent liabilities.
All the matters were subject to a review and estimate by the Board of
Directors based on the information available at the date of preparation of
these financial statements and, where appropriate, supported by updated legal
opinions from independent professionals. These provisions are classified based
on the Directors' assessment of the progress and probabilities of success of
each case at each reporting date.
Movements of the provisions outstanding as at 31 December 2024 are shown
below:
Legal and Contractual Other Total
regulatory €'m €'m €'m
€'m
Balance at 1 January 2024 5.7 0.8 3.0 9.5
Provisions made during the year 0.5 - 1.4 1.9
Provisions used during the year (0.7) - (0.3) (1.0)
Provisions reversed during the year (0.4) (0.5) (0.8) (1.7)
Reclassification to assets classified as held for sale (Note 24) (5.1) (0.3) (3.3) (8.7)
Balance at 31 December 2024 - - - -
Legal and Contractual Other Total
regulatory €'m €'m €'m
€'m
2023
Non-current 5.7 0.3 2.9 8.9
Current - 0.5 0.1 0.6
5.7 0.8 3.0 9.5
2024
Non-current - - - -
Current - - - -
- - - -
Provision for legal and regulatory issues
The Group is subject to proceedings and potential claims regarding complex
legal matters which are subject to a different degree of uncertainty.
Provisions are held for various legal and regulatory issues that relate to
matters arising in the normal course of business including, in particular,
various disputes that arose in relation to the operation of the various
licences held by the Group's subsidiary Snaitech. The uncertainty is due to
complex legislative and licensing frameworks in the various territories in
which the Group operates. The Group also operates in certain jurisdictions
where legal and regulatory matters can take considerable time for the required
local processes to be completed and the matters to be resolved.
Contractual claims
The Group is subject to historic claims relating to contractual matters that
arise with customers in the normal course of business. The Group believes they
have a robust defence to the claims raised and has provided for the likely
settlement where an outflow of funds is probable. The uncertainty relates to
complex contractual dealings with a wide range of customers in various
jurisdictions, and because, as noted above, the Group operates in certain
jurisdictions where contractual disputes can take considerable time to be
resolved in the local legal system.
Given the uncertainties inherent, it is difficult to predict with certainty
the outlay (or the timing thereof) which will derive from these matters.
It is therefore possible that the value of the provisions may vary further
based on future developments. The Group monitors the status of these matters
and consults with its advisers and experts on legal and tax-related matters in
arriving at the provisions recorded. The provisions included, which were shown
as part of assets held for sale at 31 December 2024, represent the Directors'
best estimate of the potential outlay and none of the matters provided for are
individually material to the financial statements.
Accounting for uncertain tax positions
The Group is subject to various forms of tax in a number of jurisdictions.
Given the nature of the industry and the jurisdictions within which the Group
operates, the tax, legal and regulatory regimes are continuously changing and
subject to differing interpretations. As such, the Group is exposed to a small
number of uncertain tax positions and open audits/enquiries. Judgement is
applied in order to adequately provide for uncertain tax positions where it is
believed that it is more likely than not that an economic outflow will arise.
The Group has provided for uncertain tax positions which meet the recognition
threshold and these positions are included within tax liabilities. There is a
risk that additional liabilities could arise. Given the uncertainty and the
complexity of application of international tax in the sector, it is not
feasible to accurately quantify any possible range of liability or exposure,
and this has therefore not been disclosed.
Note 29 - Deferred and contingent consideration
2024 2023
€'m €'m
Non-current contingent consideration
Acquisition of AUS GMTC PTY Ltd 9.8 5.4
Others - 0.4
Total non-current contingent consideration 9.8 5.8
Current deferred and contingent consideration consists of:
LSports - deferred 6.9 -
Other acquisitions - contingent 1.2 0.4
Total current deferred and contingent consideration 8.1 0.4
Total contingent consideration 17.9 6.2
The maximum deferred and contingent consideration payable is as follows:
2024 2023
€'m €'m
Acquisition of AUS GMTC PTY Ltd 48.1 45.3
LSports 6.9 -
Other acquisitions 1.2 0.8
56.2 46.1
Note 30 - Trade payables
2024 2023
€'m €'m
Suppliers 25.2 46.0
Customer liabilities 36.4 20.9
61.6 66.9
Note 31 - Deferred tax
The movement on the deferred tax is as shown below:
2024 2023
€'m €'m
At 1 January as previously reported (83.8) (10.8)
Impact of correction of errors - 15.3
Restated balance at 1 January (83.8) 4.5
Charge to profit or loss (continuing and discontinued operations) (62.4) (87.4)
On business combinations - (0.9)
Reclassification to assets classified as held for sale (Note 24) 143.6 -
At 31 December (2.6) (83.8)
2024 2023
€'m €'m
Split as:
Deferred tax liability (19.2) (161.6)
Deferred tax asset 16.6 77.8
(2.6) (83.8)
Deferred tax assets and liabilities are offset only when there is a legally
enforceable right of offset, in accordance with IAS 12.
As at 31 December 2024, the Directors continued to recognise deferred tax
assets arising from temporary differences and tax losses carried forward, with
the latter only to the extent that it is probable that future taxable profit
will be available against which the unused tax losses can be utilised. Please
refer to Notes 6 and 13 for the assessment performed on the recognition of
deferred tax in the period.
Details of the deferred tax outstanding as at 31 December 2024 and 2023 are as
follows:
2024 2023
€'m €'m
Deferred tax recognised on Group restructuring - 36.8
Tax losses 2.9 20.6
Other temporary and deductible differences (5.3) (6.4)
Deferred tax on acquisitions (0.2) (81.2)
Intangible assets - (53.6)
(2.6) (83.8)
Details of the deferred tax, amounts recognised in profit or loss are as
follows:
2024 2023
€'m €'m
Accelerated capital allowances (24.2) (2.0)
Other temporary and deductible differences (21.3) (39.4)
Leases - 0.1
Tax losses (16.9) (46.1)
(62.4) (87.4)
Note 32 - Other payables
2024 2023
€'m €'m
Non-current liabilities
Payroll and related expenses 14.0 30.6
Other 1.1 4.2
15.1 34.8
Current liabilities
Payroll and related expenses 146.0 99.8
Accrued expenses 47.9 76.0
VAT payable 3.1 2.7
Interest payable 2.6 5.9
Other payables 11.2 33.1
210.8 217.5
Note 33 - Related parties
Parties are considered to be related if one party has the ability to control
the other party or exercise significant influence over the other party's
making of financial or operational decisions, or if both parties are
controlled by the same third party. Also, a party is considered to be related
if a member of the key management personnel has the ability to control the
other party.
During the year, Group companies entered into the following transactions with
related parties which are not members of the Group:
2024 2023
€'m €'m
Revenue
Investments in associates 209.2 193.4
Interest income
Investments in associates 10.6 1.7
Operating expenses
Investments in associates 0.8 0.7
Dividend income
Investments in associates 0.4 2.0
The revenue from investments in associates includes income from Caliplay,
Galera, Wplay, Onjoc, Tenbet and NorthStar. The interest income relates to the
same companies plus Stats International.
The following amounts were outstanding at the reporting date:
2024 2023
€'m €'m
Trade receivables (Note 21)
Investments in associates 56.2 99.1
Other receivables (Note 22)
Investments in associates 0.3 0.3
Loans and interest receivable - current (Note 22)
Investments in associates 6.5 1.3
Loans and interest receivable - non-current (Note 20)
Investments in associates 87.6 60.9
Trade payables
Investments in associates 0.2
-
The loans and interest receivables above do not include the expected credit
losses. For the year ended 31 December 2024, the Group recognised a provision
for expected credit losses of €0.1 million relating to amounts owed by
related parties in less than one year (2023: €0.1 million) and €5.1
million for more than one year (2023: €2.4 million).
The loans due from related parties are further disclosed in Note 19.
Key management personnel compensation, which includes the Board members
(Executive and Non-executive Directors) and senior management personnel,
comprised the following:
2024 2023
€'m €'m
Short-term employee benefits 48.8 16.5
Post-employment benefits - 0.1
Termination benefits - 0.1
Share-based payments 2.2 2.8
51.0 19.5
The Group is aware that a partnership in which a member of key management
personnel (who is not a Board member) has a non-controlling interest provides
certain advisory and consulting services to third-party service providers of
the Group in connection with certain of the Group's structured and other
commercial agreements. The partnership contracts with and is compensated by
the third-party service providers, and the Group has no direct arrangement
with the partnership. The total paid to this partnership by the third-party
service providers was €2.7 million (2023: €12.5 million).
Note 34 - Subsidiaries
Details of the Group's principal subsidiaries as at the end of the year are
set out below:
Name Country of Proportion of voting rights Nature of business
incorporation and ordinary share capital held
Playtech Holdings Limited Isle of Man 100% Main trading company of the Group up to December 2020, which owned the
intellectual property rights and licensed the software to customers. From
January 2021 onwards, following the transfer of intellectual property rights
to Playtech Software Limited, the principal activity of this company is the
holding of investment in subsidiaries
Playtech Software Limited United Kingdom 100% Main trading company from 2021 onwards. Owns the intellectual property rights
and licenses the software to customers
Video B Holding Limited British Virgin Islands 100% Trading company for the Videobet software. Owns the intellectual property
rights of Videobet and licenses it to customers. From January 2021 onwards,
the principal activity is the holding of investment in subsidiaries
Playtech Services (Cyprus) Limited Cyprus 100% Manages the iPoker Network in regulated markets and is a main holding company
of the Group
VB (Video) Cyprus Limited Cyprus 100% Trading company for the Videobet product to Romanian companies
Virtue Fusion (Alderney) Limited Alderney 100% Online bingo and casino software provider
Intelligent Gaming Systems Limited United Kingdom 100% Casino management systems to land-based businesses
VF 2011 Limited Alderney 100% Holds licence in Alderney for online gaming and Bingo B2C operations
PT Turnkey Services Limited Isle of Man 100% Holding company of the Turnkey Services group
PT Entertenimiento Online EAD Bulgaria 100% Poker and bingo network for Spain
PT Marketing Services Limited British Virgin Islands 100% Holding company
PT Operational Services Limited British Virgin Islands 100% Holding company
PT Network Management Limited British Virgin Islands 100% Holding company
Videobet Interactive Sweden AB Sweden 100% Trading company for the Aristocrat Lotteries VLTs
Quickspin AB Sweden 100% Owns video slots intellectual property
Best Gaming Technology GmbH Austria 100% Trading company for sports betting
Playtech BGT Sports Limited Cyprus 100% Trading company for sports betting and provider of development services
ECM Systems Ltd United Kingdom 100% Owns bingo software intellectual property and bingo hardware
Eyecon Limited Alderney 100% Develops and provides online gaming slots
Rarestone Gaming PTY Ltd Australia 100% Development company
HPYBET Austria GmbH Austria 100% Operating shops in Austria
Snaitech SPA Italy 100% Italian retail betting market and gaming machine market
OU Playtech (Estonia) Estonia 100% Designs, develops and manufactures online software
Techplay Marketing Limited Israel 100% Provider of marketing support services, software development and support
services
OU Videobet Estonia 100% Develops software for fixed odds betting terminals and casino machines (as
opposed to online software)
Playtech Bulgaria EOOD Bulgaria 100% Designs, develops and manufactures online software
PTVB Management Limited Isle of Man 100% Management services company
Techplay S.A. Software Limited Israel 100% Software development and operational support services
CSMS Limited Bulgaria 100% Consulting and online technical support, data mining processing and
advertising services to Group companies
Mobenga AB Limited Sweden 100% Mobile sportsbook betting platform developer
PokerStrategy Ltd Gibraltar 100% Operates poker community business
Snai Rete Italia S.r.l. Italy 100% Italian retail betting market
PT Services UA LTD Ukraine 100% Designs, develops and manufactures software
Trinity Bet Operations Ltd Malta 100% Retail and digital sports betting
Euro live Technologies SIA Latvia 100% Provider of live services to Group companies
Note 35 - Financial instruments and risk management
The Group has exposure to the following risks arising from financial
instruments:
• credit risk;
• liquidity risk; and
• market risk.
There have been no substantive changes in the Group's exposure to financial
instrument risks, its objectives, policies and processes for managing those
risks or the methods used to measure them from previous periods unless
otherwise stated in this note.
The principal financial instruments of the Group, from which financial
instrument risks arises, are as follows:
• trade receivables;
• loans receivable;
• convertible loans;
• cash and cash equivalents;
• investments in equity securities;
• derivative financial assets;
• trade payables;
• bonds;
• loans and borrowings; and
• deferred and contingent consideration.
Financial instrument by category
The following table shows the carrying amounts and fair values of financial
assets and financial liabilities, including their levels in the fair
value hierarchy.
Carrying Fair value
amount
Note Measurement 2024 Level 1 Level 2 Level 3
category €'m €'m €'m €'m
Continuing operations
31 December 2024
Non-current assets
Equity investments 19B FVTPL 152.1 11.1 - 141.0
Derivative financial assets 19C FVTPL 895.0 - - 895.0
Loans receivable 20 Amortised cost 85.9
- - -
Current assets
Trade receivables 21 Amortised cost 141.6 - - -
Loans receivable 20 Amortised cost 7.3 - - -
Cash and cash equivalents 23 Amortised cost 268.1
- - -
Non-current liabilities
Bonds 27 Amortised cost 447.7 - - -
Lease liability 17 Amortised cost 26.5 - - -
Deferred and contingent and consideration 29 FVTPL 9.8 9.8
- -
Current liabilities
30 Amortised cost 61.6 - - -
Trade payables
Lease liability 17 Amortised cost 19.8 - - -
Progressive operators' jackpots and security deposits 23 Amortised cost 99.8 - - -
Client funds 23 Amortised cost 2.5 - - -
Deferred and contingent and consideration 29 FVTPL 8.1 - - 8.1
Interest payable 32 Amortised cost 2.6
- - -
Carrying Fair value
amount
Note Measurement 2024 Level 1 Level 2 Level 3
category €'m €'m €'m €'m
Treated as held for sale
31 December 2024
Current assets
Trade receivables 24 Amortised cost 81.7 - - -
Cash and cash equivalents 23 Amortised cost 185.9
- - -
Current liabilities
Trade payables 24 Amortised cost 26.2 - - -
Lease liability 24 Amortised cost 34.7 - - -
Progressive operators' jackpots and security deposits 24 Amortised cost 13.1 - - -
Client funds 24 Amortised cost 33.7 - - -
Contingent consideration 24 FVTPL 2.0 - - 2.0
Carrying Fair value
amount
Note Measurement 2023 Level 1 Level 2 Level 3
category €'m €'m €'m €'m
31 December 2023
Non-current assets
Equity investments 19B FVTPL 92.8 15.8 - 77.0
Derivative financial assets 19C FVTPL 827.8 - - 827.8
Convertible loans 20 FVTPL 3.5 - - 3.5
Trade receivables 21 Amortised cost 1.9 - - -
Loans receivable 20 Amortised cost 58.1 - - -
Current assets
Trade receivables 21 Amortised cost 207.1 - - -
Loans receivables 20 Amortised cost 1.7 - - -
Cash and cash equivalents 23 Amortised cost 516.2 - - -
Non-current liabilities
Bonds 27 Amortised cost 646.1 - - -
Lease liability 17 Amortised cost 61.9 - - -
Contingent consideration 29 FVTPL 5.8 - - 5.8
Current liabilities
Trade payables Amortised cost 66.9 - - -
30
Lease liability 17 Amortised cost 24.9 - - -
Progressive operators' jackpots and security deposits 23 Amortised cost 111.0 - - -
Client funds 23 Amortised cost 41.9 - - -
Contingent consideration 29 FVTPL 0.4 - - 0.4
Interest payable 32 Amortised cost 5.9 - - -
The fair value of the contingent consideration is calculated by discounting
the estimated cash flows. The valuation model considers the present value of
the expected future payments, discounted using a risk adjusted discount rate.
For details of the fair value hierarchy, valuation techniques and significant
unobservable inputs relating to determining the fair value of equity
investments and derivative financial assets, which are classified as Level 1
and 3 of the fair value hierarchy, refer to Note 6.
The carrying amount does not materially differ from the fair value of the
financial assets and liabilities.
The Board has overall responsibility for the determination of the Group's risk
management objectives and policies and, whilst retaining ultimate
responsibility for them, it has delegated the authority for designing and
operating processes that ensure the effective implementation of the objectives
and policies to the Group's Finance function. The overall objective of the
Board is to set policies that seek to reduce risk as far as possible without
unduly affecting the Group's competitiveness and flexibility.
Further details regarding these policies are set out below:
A. Credit risk
Credit risk is the risk that a counterparty will not meet its obligations
under a financial instrument or customer contract, leading to a financial
loss. The Group is exposed to credit risk from its operating activities
(primarily trade receivables), its investing activities through loans made
and from its financing activities, including deposits with banks and
financial institutions. After the impairment analysis performed at the
reporting date, the expected credit losses (ECLs) are €10.7 million (2023:
€9.7 million). As at 31 December 2024, two customers had combined loans
and receivables outstanding of €113.3 million (2023: €139.7 million).
Cash and cash equivalents
The Group held cash and cash equivalents (before ECL) of €454.4 million as
at 31 December 2024 including amounts shown in held for sale (2023: €516.6
million). The cash and cash equivalents are held with bank and financial
institution counterparties, which are rated from Caa- to AA+, based on Moody's
ratings.
Impairment on cash and cash equivalents has been measured on a 12-month
expected credit loss basis and reflects the short maturities of the exposures.
The Group considers that its cash and cash equivalents have low credit risk
based on the external credit ratings of the counterparties. The Group uses a
similar approach for assessment of ECLs for cash and cash equivalents to those
used for trade receivables. The ECL on cash balances as at 31 December 2024 is
€0.4 million (2023: €0.4 million).
A reasonable movement in the inputs of the ECL calculation of cash and cash
equivalents does not materially change the ECL to be recognised.
Total Financial institutions Financial institutions
€'m with A- and with below A- rating
above rating and no rating
€'m €'m
Continuing operations
At 31 December 2024 268.5 254.9 13.6
At 31 December 2023 516.6 337.0 179.6
Treated as held for sale
At 31 December 2024 185.9 61.0 124.9
At 31 December 2023 - - -
Trade receivables
The Group's exposure to credit risk is influenced mainly by the individual
characteristics of each customer. However, management also considers the
factors that may influence the credit risk of its customer base, including the
default risk associated with the industry and country in which customers
operate.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses which uses a lifetime expected loss allowance for all trade
receivables. To measure the ECL, trade receivables have been grouped based on
shared credit risk characteristics and the days past due. The trade balances
from related parties have also been included in the ECL assessment. The
expected loss rates are calculated based on past default experience and an
assessment of the future economic environment. The ECL is calculated with
reference to the ageing and risk profile of the balances.
As at 31 December 2024, the Group has trade receivables (including amounts
disclosed as held for sale) of €223.2 million (2023: €209.0 million) which
is net of an allowance for ECL of €5.1 million (2023: €6.8 million).
The carrying amounts of financial assets represent the maximum credit
exposure.
Set out below is the movement in the allowance for expected credit losses of
trade receivables:
31 December 2024 Total Not past due 1-2 months More than
€'m €'m overdue 2 months
€'m past due
€'m
Expected credit loss rate 2.2% 2.2% 3.4% 2.1%
Trade receivables after specific provision 228.3 193.4 11.6 23.3
Expected credit loss (5.1) (4.2) (0.4) (0.5)
Trade receivables - net 223.2 189.2 11.2 22.8
31 December 2023 Total Not past due 1-2 months More than
€'m €'m overdue 2 months
€'m past due
€'m
Expected credit loss rate 3.2% 4.8% 1.0% 2.1%
Trade receivables after specific provision 215.8 109.3 62.9 43.6
Expected credit loss (6.8) (5.3) (0.6) (0.9)
Trade receivables - net 209.0 104.0 62.3 42.7
A reasonable movement in the inputs of the ECL calculation of trade
receivables does not materially change the ECL to be recognised.
Impairment losses on trade receivables and contract assets are presented as
net impairment losses within the impairment of financial assets. Subsequent
recoveries of amounts previously written off are credited against the same
line item.
The movement in the ECL in respect of trade receivables during the year was as
follows:
2024 2023
€'m €'m
Balance at 1 January 6.8 4.5
(Reversed) / Charged to profit or loss (1.7) 2.3
Balance at 31 December 5.1 6.8
As at 31 December 2024, the Group has a significant concentration of trade
receivables from a related party, representing 16% of the net trade receivable
balance (2023: 41%). This concentration of receivables from a related party
exposes the Group to concentration risk, as any adverse financial performance
or inability of the related party to fulfil its obligations could have a
material adverse impact on the Group's financial position, results of
operations and cash flows. The Group believes that this amount is recoverable
and expects timely payment (refer to Note 6 for significant judgement made).
Loans receivable
The Group recognised an allowance for expected credit losses for all debt
instruments given to third parties based on past default experience and
assessment of the future economic environment. For the year ended 31 December
2024, the Group recognised provision for expected credit losses of €5.2
million in profit or loss relating to loans receivable (2023: €2.5 million).
2024 2023
€'m €'m
Balance at 1 January 2024/2023 2.5 1.6
Charged to profit or loss 2.7 0.9
Balance at 31 December 2024/2023 5.2 2.5
B. Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset. The Group's objective when
managing liquidity is to ensure, as far as possible, that it will have
sufficient liquidity to meet its liabilities when they are due, under both
normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
The following are the remaining contractual maturities of financial
liabilities at the reporting date. The amounts are gross and undiscounted and
include contractual interest payments. Balances due within one year equal
their carrying balances as the impact of discounting is not significant.
Contractual cash flows
2024 Carrying Total Within 1 year 1-5 years More than
amount €'m €'m €'m 5 years
€'m €'m
Bonds 447.7 519.7 24.0 495.7 -
Lease liability 46.3 54.7 20.8 23.7 10.2
Deferred and contingent consideration 17.9 19.7 8.1 11.6 -
Trade payables 61.6 61.6 61.6 - -
Progressive operators' jackpots and security deposits 99.8 99.8 99.8 - -
Client funds 2.5 2.5 2.5 - -
Interest payable 2.6 2.6 2.6 - -
678.4 760.6 219.4 531.0 10.2
Contractual cash flows
2023 Carrying Total Within 1 year 1-5 years More than
amount €'m €'m €'m 5 years
€'m €'m
Bonds 646.1 762.8 32.5 730.3 -
Lease liability 86.8 96.8 26.7 53.5 16.6
Deferred and contingent consideration 6.2 7.8 0.4 7.4 -
Trade payables 66.9 66.9 66.9 - -
Progressive operators' jackpots and security deposits 111.0 111.0 111.0 - -
Client funds 41.9 41.9 41.9 - -
Interest payable 5.9 5.9 5.9 - -
Provisions for risks and charges 9.5 9.5 0.6 8.9 -
974.3 1,102.6 285.9 800.1 16.6
C. Market risk
Market risk is the risk that changes in market prices, such as foreign
exchange rates, interest rates and equity prices, will affect the Group's
income or the value of its holding of financial instruments.
The objective of market risk management is to manage and control market risk
exposures within acceptable parameters while optimising the return.
Currency risk
Currency risk is the risk that the value of financial instruments will
fluctuate due to changes in foreign exchange rates.
Foreign exchange risk arises because the Group has operations located in
various parts of the world. However, the functional currency of those
operations is the same as the Group's primary currency (Euro) and the Group is
not substantially exposed to fluctuations in exchange rates in respect of
assets held overseas.
Foreign exchange risk also arises when the Group operations enter into foreign
transactions, and when the Group holds cash balances, in currencies
denominated in a currency other than the functional currency.
31 December 2024 In EUR In USD In GBP In other Total
€'m €'m €'m currencies €'m
€'m
Continuing operations
Cash and cash equivalents 180.9 11.7 61.8 14.1 268.5
Progressive operators' jackpots and security deposits (87.8) (1.0) (13.5) - (102.3)
Cash and cash equivalents less client funds 93.1 10.7 48.3 14.1 166.2
31 December 2024 In EUR In USD In GBP In other Total
€'m €'m €'m currencies €'m
€'m
Treated as held for sale
Cash and cash equivalents 185.9 - - - 185.9
Progressive operators' jackpots and security deposits (46.8) - - - (46.8)
Cash and cash equivalents less client funds 5 - - - 139.1
31 December 2023 In EUR In USD In GBP In other Total
€'m €'m €'m currencies €'m
€'m
Cash and cash equivalents 418.7 11.2 69.7 17.0 516.6
Progressive operators' jackpots and security deposits (140.3) (0.4) (12.2) - (152.9)
Cash and cash equivalents less client funds 278.4 10.8 57.5 17.0 363.7
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate due to changes in market interest rates.
The Group's exposure to the risk of changes in market interest rates relates
primarily to the Group's long-term debt obligations with floating interest
rates. The Group manages its interest rate risk by having a balanced portfolio
of fixed and variable rate bonds and loans and borrowings. At 31 December
2024, none of the Group's borrowings are at a variable rate of interest (2023:
Nil%).
Any reasonably possible change to the interest rate would have an immaterial
effect on the interest payable.
Equity price risk
The Group is exposed to market risk by way of holding some investments in
other companies on a short-term basis. Variations in market value over the
life of these investments will have an immaterial impact on the balance sheet
and the statement of comprehensive income.
Note 36 - Reconciliation of movement of liabilities to cash flows arising from
financing activities
Liabilities
Loans and Bonds Interest on Deferred and contingent Lease Total
borrowings €'m loans and consideration liabilities €'m
€'m borrowings €'m €'m
and bonds
€'m
Balance at 1 January 2024 - 646.1 5.9 6.2 86.8 745.0
Changes from financing cash flows
Interest paid on bonds - - (35.0) - - (35.0)
Repayment of bonds - (200.0) - - - (200.0)
Payment of contingent consideration - - - (0.5) - (0.5)
Principal paid on lease liability - - - - (25.8) (25.8)
Interest paid on lease liability - - - - (4.7) (4.7)
Total changes from financing cash flows
- (200.0) (35.0) (0.5) (30.5) (266.0)
Other changes
Liability related
New leases - - - - 16.7 16.7
On business combinations - - - 1.6 2.0 3.6
Contingent consideration on acquisition of investments - - - 8.1 - 8.1
Interest on bonds and loans and borrowings - 1.6 32.4 - - 34.0
Interest on lease liability - - - - 4.7 4.7
Movement in contingent consideration - - - 3.8 - 3.8
Foreign exchange difference - - - 0.7 1.5 2.2
Total liability-related other changes - 1.6 32.4 14.2 24.9 73.1
Balance at 31 December 2024 - 447.7 3.3 19.9 81.2 552.1
Liabilities
Loans and Bonds Interest on Deferred and contingent Lease Total
borrowings €'m loans and consideration liabilities €'m
€'m borrowings €'m €'m
and bonds
€'m
Balance at 1 January 2023 - 547.6 7.3 2.9 85.8 643.6
Changes from financing cash flows
Interest paid on bonds - - (31.3) - - (31.3)
Repayment of loans and borrowings (77.4) - - - - (77.4)
Proceeds from loans and borrowings 79.9 - - - - 79.9
Proceeds from the issuance of bonds - 297.2 - - - 297.2
Repayment of bonds - (200.0) - - - (200.0)
Payment of contingent consideration - - - (0.2) - (0.2)
Principal paid on lease liability - - - - (23.1) (23.1)
Interest paid on lease liability - - - - (5.2) (5.2)
Total changes from financing cash flows 2.5 97.2 (31.3) (0.2) (28.3) 39.9
Other changes
Liability related
New leases - - - - 22.0 22.0
On business combinations - - - 0.4 1.9 2.3
Interest on bonds and loans and borrowings - 1.3 29.6 - - 30.9
Interest on lease liability - - - - 5.2 5.2
Movement in contingent consideration - - - 3.3 - 3.3
Foreign exchange difference (2.5) - 0.3 (0.2) 0.2 (2.2)
Total liability-related other changes (2.5) 1.3 29.9 3.5 29.3 61.5
Balance at 31 December 2023 - 646.1 5.9 6.2 86.8 745.0
Note 37 - Correction of error
The 2022 and 2023 financial statements have been restated due to an accounting
error principally arising on consolidation. The error was principally due to
a deferred tax liability arising at subsidiary level only which should have
been eliminated at the consolidation but was incorrectly offset against a
deferred tax asset in the Group balance sheet.
A third balance sheet has been represented for the 2022 year-end to increase
the deferred tax asset by €15.3 million with corresponding adjustment to
2023 balance sheet and retained earnings. The adjustment to the 2022 balance
sheet includes the impact in profit or loss for the year ended 31 December
2023 which is not material and therefore has been included as part of the
opening reserves adjustment. The adjustment increases net assets by €15.3
million in each of the years.
The following tables summarise the impact on the Group's consolidated
financial statements:
Impact of correction of error
31 December 2022 As previously reported Adjustments As restated
€'m €'m €'m
Deferred tax assets 114.0 15.3 129.3
Other assets 2,909.9 - 2,909.9
Total assets 3,023.9 15.3 3,039.2
Total liabilities 1,321.4 - 1,321.4
Retained earnings 1,113.0 15.3 1,128.3
Others 589.5 - 589.5
Total equity 1,702.5 15.3 1,717.8
31 December 2023 As previously reported Adjustments As restated
€'m €'m €'m
Deferred tax assets 62.5 15.3 77.8
Other assets 3,263.3 - 3,263.3
Total assets 3,325.8 15.3 3,341.1
Total liabilities 1,519.6 - 1,519.6
Retained earnings 1,219.2 15.3 1,234.5
Others 587.0 - 587.0
Total equity 1,806.2 15.3 1,821.5
There is no impact on the Group's basic or diluted earnings per share, or on
the total operating investing or financing cash flows for the year ended 31
December 2023.
Note 38 - Events after the reporting date
In January 2025, NorthStar secured a credit arrangement of up to CAD 43.4
million from Beach Point Capital Management LP, with the Playtech Group
agreeing to provide credit support for certain obligations under the credit
facility. The purpose of this credit arrangement is to support NorthStar's
continued growth by strengthening its balance sheet. One of the uses of the
proceeds was the repayment of CAD 9.5 million promissory notes owed by
NorthStar to Playtech at 31 December 2024, which was received in January 2025.
NorthStar also issued to Playtech 32,735,295 common share purchase warrants,
exercisable at a price of CAD 0.055 per share, expiring in 5 years, in
exchange for Playtech being the loan guarantor.
In March 2025, the Group paid LSports the additional consideration of €6.9
million which was recorded as deferred consideration as at 31 December 2024.
Also in March 2025, the Group confirmed that the Mexican antitrust approval
has now been received for the revised arrangements related to its strategic
agreement with Caliplay, and as such completion is scheduled to take place on
31 March 2025.
On 26 March 2025, the Group signed an agreement for a new amended €225.0
million 5-year RCF facility, which, subject to completion of the sale of
Snaitech, expected to occur in Q2 2025, will amend and restate the existing
€277.0 million RCF facility and become effective on completion of the sale.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR QDLBLEXLXBBXRecent news on Playtech
See all newsREG - Playtech PLC - Director/PDMR Shareholding
AnnouncementREG - Playtech PLC - Remaining redemption of €350 million bond
AnnouncementREG - Playtech PLC - Return of approximately €1.8bn to shareholders
AnnouncementREG - Playtech PLC - Completion of Snaitech sale
AnnouncementREG - Playtech PLC - Director/PDMR Shareholding
Announcement