Amaya trades its way out of choppy waters

Amaya trades its way out of choppy waters

Monday, January 23, 2017 Posted by Luke Massey
PokerStars operator brushes aside M&A distractions

Amaya’s trading update brought some good news for investors in a company which has been brought low in the past 12 months by various takeover rumours, both real and imagined.

The new guidance issued on Friday last week said that revenues for the year would be at the high end of expectations between C$1.153bn and C$1.158bn. At the top end this would represent an 8 percent rise of the 2015 full-year revenue figure of C$1.07bn. Adjusted EBITDA is now forecast to come in at between C$521m and $526m or circa 14.5 percent ahead of last year’s figure of $459m.

Chief executive Rafi Ashkenazi, chief executive at Amaya, hailed the upcoming figures as representing a record year and said that the better-than-expected fourth-quarter numbers from the online casino operation and a successful re-launch on Portugal were augers of an even better 2017.

Said Ashkenazi: “We built positive momentum in 2016 that accelerated throughout the year and which we believe was largely the result of the positive impact of our strategy to improve the poker ecosystem for recreational players and leverage our global competitive advantage in online poker to acquire new customers, cross-sell existing and new customers into our online casino and sportsbook offerings, and maximize the lifetime value of all of our customers.”

He added that the progress in the year ahead would come despite the already apparent headwinds of the declining value of customers’ local currencies against the US dollar and the upcoming cessation of real-money online poker in Australia.

“We anticipate that certain operational initiatives, including the introduction of a new cross-vertical customer loyalty program, the potential expansion into new markets, our continued focus on achieving product parity in our online casino and sportsbook, and our operational excellence program, will help to both drive our business forward and mitigate these and future headwinds,” Ashkenazi concluded.

Amaya has been involved in two high-profile failed merger and acquisition discussions with the last 12 months, including a merger with William Hill and a bid from former chief executive David Baazov which collapsed late last year after a public failure to find sufficient investment capital to fund a buyout.

Amaya appears to be following the lead of 888 which similarly said earlier this month it was exiting the Australian gaming market.

The company will release its full-year results in early March.

Totally Gaming says: The degree to which Ashkenazi and his team have been able to focus on the operational side even while the M&A sideshows have been entertaining onlookers is impressive. More testing times lie ahead; analysts will be keen to see how the casino trends play out in the next few quarters, for instance, and it would be good to get some better visibility on the sportsbook. But the company is well-placed to continue to forge ahead even if, as is likely, more buyout rumours emerge.

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