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

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Bybit expands into Europe amid regulatory scrutiny

Dubai-based cryptocurrency exchange Bybit is expanding its operations in Europe after encountering regulatory challenges in Hong Kong.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

<