sees Revenues drop 37% in First Half 2016 as restructuring hits bottom line

Online gaming giant Playtech PLC (LON:PTEC) announced its First Half 2016 results today, which overall were pretty good. Playtech’s revenues and EBITDA were up in the healthy double digit percent range. The company increased its dividend. And post announcement Playtech’s shares reacted nicely, up more than 4% to a new all-time high for the stock at about £9.44 per share.

However the one not-so-bright spot was the company’s financials division, namely

We had exclusively reported back in February that was undergoing mass layoffs in a restructuring of sales, retention and customer service operations. The company looked to sever ties with and reliance on IBs, in an effort by Playtech management to automate the operations of Playtech even went as far as changing compensation internally, to do away with salesman commissions in favor of fixed salaries. Not surprisingly, many higher-performing sales people left, as they could no longer earn large commissions.

We had also exclusively reported that was canceling office leases for new planned office space in Tel Aviv, as it pared headcount by more than a third since being acquired by Playtech last spring.

The changes made certainly were reflected in’s results. Overall, Revenues at Playtech’s Financials division (namely fell 37% in the First Half to €31.3 million, down from €49.4 million in the second half of 2015. A good chunk of the drop was what in what calls ‘B2C indirect’ – namely IBs – which went from €18.4 million last year to zero in 2016.

But again, these were the result of voluntary changes made at In the company’s view, these were apparently necessary changes reflecting a more stringent regulatory environment for Forex brokers. In the company’s words:

We are now confident that Markets has the right platform for sustainable growth, which is beginning to show positive signs, as evidenced by an improved performance in July and August to date. The second half of the year will also benefit from further reductions in the cost base made in June with headcount now reduced by a third since the acquisition in April 2015. Finally, Markets gained traction as a B2B provider given its unique technology and offering, and has a good pipeline of B2B business which will augment B2C growth over time.

Playtech’s full First Half 2016 report can be seen here.

Read Also: