EU regulations weigh on number of new customers at Playtech’s financials division in H1 2018

Maria Nikolova

During the first half, as preparation for the new measures issued by ESMA, the management decided to take a prudent approach to marketing spend on new customer acquisition.

The effects of the new rules for CFD offering to retail investors introduced by ESMA are made apparent by the report of another company which is engaged on online trading – Playtech PLC (LON:PTEC), or more precisely, its financial division TradeTech Group.

In a filing with the London Stock Exchange today, Playtech said that, during the first half of 2018, as preparation for the new measures issued by ESMA, the management decided to take a prudent approach to marketing spend on new customer acquisition. Management has taken the view that the incoming regulation may potentially impact the ‘customer life time value’ and ‘accordingly cost per acquisition’ metrics across the market. This resulted in slower growth in number of new customers in the period.

On the brighter side, in the B2B business segment, TradeTech saw revenue up 39% and 15%, and volumes up 109% and 55% on a proforma basis. This brought the business close to reaching the $1 trillion level in trading volume from B2B customers in the 6 months of 2018.

Playtech notes the importance of the CFH and TradeTech Alpha acquisitions, which complimented the existing frontend and backend technology and enabled TradeTech to deliver an end to end solution for brokers, delivering a full suite of products from unique trading platform and CRM systems, to liquidity control, risk management, real time risk applications and more. TradeTech’s strategy is to continue to establish its capabilities across the entire value chain in the financial trading sector.

Revenue in the TradeTech Group was €52.3 in the first half of 2018, up 16% versus the first half of 2017. The functional currency of the TradeTech Group is US Dollars and, looking at revenue on a USD basis, the H1-2018 growth was 37%; reflecting growth in both the B2B and B2C verticals driven through higher volume of trading.

Cost of operations in the Financials division decreased by €2.1 million in the first six months of 2018. However, on a USD basis the adjusted cost base increased by 17.5% due to the inclusion of ACM during the first half of 2018. Excluding the ACM expenditure, like for like adjusted costs in USD for the TradeTech Group were relatively flat year on year.

In terms of overall performance of Playtech, the results were not quite rosy, due to headwinds in Asia. Total reported revenue increased by 4%, but Adjusted EBITDA decreased by 15%. Adjusted Net Profit decreased by 34% predominantly due to the decrease in revenue from Asia.

Read this next

Digital Assets

Himalaya Exchange customers seek release of frozen funds from DOJ

FormerFeds, a corporate defense and litigation service provider, has filed a lawsuit against the U.S. Department of Justice (DOJ) on behalf of over three and a half thousand Himalaya Exchange customers.

Digital Assets

Nubank, Circle, and Talos join forces for crypto adoption in Brazil

Nubank, the Brazilian neobank backed by Warren Buffett’s Berkshire Hathaway and Softbank Group Corp, announced new partnerships with cryptocurrency firms Circle and Talos.

Metaverse Gaming NFT

Flare onboards Ankr, Figment, Restake, and NorthStake as validators

Flare, an EVM smart contract platform known for its focus on blockchain data utility, has announced a major step in its development. The platform has onboarded leading infrastructure providers, including Ankr, Figment, Restake, and NorthStake.

Digital Assets

Sui Joins DeFi Leaders, Topping $100M in Bridged USDC

Sui, the groundbreaking Layer 1 blockchain created by the technology experts who led Meta’s Diem blockchain initiative and created the Move smart contract language, continues its explosive ascent in decentralized finance (DeFi). This week, it surpassed $100 million in bridged USDC. 

Digital Assets

Poloniex hit by UK regulator, listed as ‘unauthorised’ exchange

The UK’s Financial Conduct Authority (FCA) has added the cryptocurrency exchange Poloniex to its warning list of non-authorized companies. Poloniex, which is based in Seychelles, has experienced four hacks in the last two months and is affiliated with entrepreneur Justin Sun.

Industry News

Exclusive Markets is Proudly ISO/IEC 27001:2013 Certified by MSECB for Unparalleled Commitment to Information Security

Exclusive Markets, a leading name in the FINTECH sector, proudly announces the attainment of ISO/IEC 27001:2013 Certification by the MSECB. This esteemed certification highlights Exclusive Markets’ persistent commitment to fortifying information security within its cutting-edge trading technology. 

Digital Assets

SEC is discussing ‘technical details’ of Bitcoin EFTs ahead of approval

Discussions between the U.S. Securities and Exchange Commission (SEC) and asset managers seeking to list Bitcoin exchange-traded funds (ETFs) have reportedly advanced to key technical details.

Digital Assets

Versatus Labs Reaches $50 Million Valuation Following $2.3 Million Seed Funding Round

Versatus Labs, a peer-to-peer web services protocol aiming to help Web2 developers transition to Web3, has completed a $2.3 million funding round at a $50 million valuation led by key investors in the Web3 space including NGC Ventures and Republic Crypto. The latest funding round aims to help the company develop the ‘world’s first stateless roll-up’, Versatus LASR. This follows Versatus Labs’ recent pivot from Layer 1 solutions to Ethereum scaling solutions. 

Digital Assets

Binance ex-chief’s sentencing looms as court accepts his guilty plea

A U.S. district judge has accepted a guilty plea from former Binance CEO Changpeng Zhao (CZ) on charges related to anti-money laundering violations. The plea was accepted by Judge Richard Jones in the U.S. District Court for the Western District of Washington in Seattle.