Playtech PLC (LON:PTEC) has suspended its share buyback and withdrawn its dividend as it tries to protect cash flow amid the coronavirus pandemic.
The FTSE 250-listed gaming company said it was looking for opportunities to cut costs without damaging the company in the long-term, but warned of losses of €4mln per month at its online sports betting arm, €3mln per month from its Italian bookmaking chain becuase of the cancellation of sporting events due to coronavirus.
READ: Bookmakers battered again as all British horseracing meetings cancelled
While poker and bingo have seen increases in activity in recent days following the quarantines and other social distancing restrictions put in place by governments around Europe, the company believes “there is a risk that player behaviour changes the longer the Covid-19 situation continues”.
Some of its offices will need to close in future, which could hit the Live Casino business as it requires a significant number of employees working in the same location.
Financial trading arm, TradeTech, has benefitted from the increase in market volatility due to the pandemic, generating more than €30mln of adjusted profit (EBITDA) so far in the year compared to an average of €19mln over the past two years.
The fourth leg of the business, Asia, continued to remain depressed, with €7mln revenue per month expected in February and March.
Playtech, which ended 2019 with net debt of €602.4mln and €333mln of cash, said its bank covenants permitted net debt to be three times EBITDA.
It has €250mln available under a revolving credit facility, with another €50mln cash expected in the second quarter of the year from a previously agreed sale of Snaitech land in Italy.
Shares in the company fell another 5% to 135p on Thursday morning, down around two thirds since the start of the year.