The Stars Group has posted its financial results for Q4 and full-year ended December 31, 2019, yielding growth in overall revenue, profit and EBITDA. The rises came against a backdrop of acquisition and debt reduction as well as strong regulatory headwinds and continued investment in the US. The firm’s FOX Sports partner, however, showed a loss in line with expectations.
Total revenue for the group in Q4 was $688m ($653m), a rise of 5.4%, while the full-year saw total revenue rise by 24.6% to $2.5bn ($2bn). Operating income for Q4 was $92.4m ($74m), with full-year showing a rise of 1.6% to $264.2bn ($260.1bn). Q4 adjusted EBITDA was reported as $249.1m ($239.4m), ahead by 4.1%. For the full-year the firm saw AEBITDA grow 17.9% to $921.1m ($781m).
With international sales driving the biggest portion of the group’s overall revenue – $1.3bn or 52% – the update focused heavily on US activities, specifically the partnership with FOX Sports which showed an anticipated loss of $40m for the year.
It noted: “Since its launch in September 2019, just four months after The Stars Group announced its US media and sports wagering partnership with FOX Sports, the FOX Sports Super 6 app saw more than 1.3 million downloads in 2019, with an average of over 500,000 customers making at least one prediction each week during the fourth quarter.
“The Stars Group currently operates its FOX Bet real-money wagering products and PokerStars-branded real-money poker and casino products in New Jersey and Pennsylvania, and since the launch of FOX Bet in New Jersey and Pennsylvania in 2019, the performance has been in-line with The Stars Group’s expectations, with strong progress in both active customers and revenue on a month-to-month basis, with approximately 65,000 combined QAUs in the fourth quarter.”
“During 2019, FOX Bet’s financial performance was in-line with its previously disclosed expected loss of approximately $40m for the year. So far in 2020, The Stars Group announced a market access agreement with the Little Traverse Bay Bands of Odawa Indians Gaming Authority for first-skin online betting and gaming market access in the State of Michigan, and currently expects to increase investments in the United States to support planned FOX Bet launches in further states, including Colorado.”
Group CEO Rafi Ashkenazi also highlighted the international business, saying: “In 2019, we continued to execute on our strategy to deliver long-term sustainable growth and become the world’s favorite igaming destination. We not only began to see the full-year benefits of our transformative 2018 acquisitions, but executed on delivering a landmark media partnership in the US, with the launch of FOX Bet, strengthening our position in this emerging market.”
“With sports betting now our largest product vertical and 81% of our revenues coming from locally regulated or taxed markets, we are well positioned for diversified growth in 2020 and beyond.”
He added: “We entered 2020 with the full $100m run-rate of expected cost synergies from our 2018 Sky Betting & Gaming acquisition and earlier this month prepaid an additional $100m of debt, underpinning our ability to execute on complex integrations and the highly cash-generative nature of our business model.”
On the outlook, Ashkenazi commented: “In 2020, we plan to further enhance the global appeal of the PokerStars brand, including by launching the PokerStars Sports brand, leveraging the operational capabilities of our Sky Betting & Gaming business, and launching television advertising for PokerStars Casino.
“Lastly, ahead of closing our combination with Flutter, which will enhance and accelerate each company’s growth strategy, we remain focused on our key strategic priorities of integration, execution, and debt reduction.”