TORONTO, May 15, 2019 /CNW/ - The Stars Group
Inc. (NASDAQ: TSG) (TSX: TSGI) today reported its financial results
for the first quarter ended March 31,
2019 and provided certain additional highlights and updates.
Unless otherwise noted, all dollar ($) amounts are in U.S.
dollars.
"During the quarter, we delivered on key components of our 2019
objectives," said Rafi Ashkenazi, The Stars Group's Chief Executive
Officer. "As we continue to lay the foundations to deliver
sustainable long-term growth across the group, we are also now
focused on positioning our new FOX Bet brand as a market leader in
the U.S."
"We continued to see growth in most markets in our International
segment on a constant currency basis during the quarter, despite
challenging operational conditions, the cessation of operations in
certain markets and foreign exchange headwinds having a significant
impact on our reported results as compared to the first quarter in
2018. Our United Kingdom segment
continues to exceed our expectations operationally with record
levels of new depositing customers, and an acceleration of growth
in QAUs, Stakes and gaming revenue, although this performance was
masked in the reported results by a record low Betting Net Win
Margin of 5%. In Australia, we are
pleased with our performance and continue to build our platform for
market share gains," said Mr. Ashkenazi.
"Underlying trends were similar in April and into May across the
three segments, but with a significantly higher Betting Net Win
Margin in the United Kingdom
segment that is above its historical average of 9%. As we look at
the remainder of 2019, we see opportunities for improved revenue
growth, with a deep pipeline of new products, content and offers,
leveraging our talent and skills across segments. Our leading
positions in attractive markets, strong brands, technology and
operating expertise have been bolstered by the new partnership with
FOX Sports and positions us well for long-term growth," concluded
Mr. Ashkenazi.
First Quarter 2019 Summary
Consolidated
|
|
|
Three Months Ended
March 31,
|
In thousands of U.S.
Dollars
(except percentages
and per share amounts)
|
|
|
2019
|
|
|
2018
|
|
|
|
%
Change
|
Total
revenue
|
|
|
|
580,384
|
|
|
|
392,891
|
|
|
|
47.7%
|
Gross profit
(excluding depreciation and amortization)
|
|
|
|
417,748
|
|
|
|
312,627
|
|
|
|
33.6%
|
Operating
income
|
|
|
|
61,537
|
|
|
|
113,867
|
|
|
|
(46.0%)
|
Net
earnings
|
|
|
|
27,658
|
|
|
|
74,361
|
|
|
|
(62.8%)
|
Adjusted Net
Earnings¹
|
|
|
|
105,600
|
|
|
|
138,762
|
|
|
|
(23.9%)
|
Adjusted
EBITDA¹
|
|
|
|
195,355
|
|
|
|
175,022
|
|
|
|
11.6%
|
Adjusted EBITDA
Margin¹
|
|
|
|
33.7%
|
|
|
|
44.5%
|
|
|
|
(24.4%)
|
Diluted earnings per
Common Share ($/Share)
|
|
|
|
0.10
|
|
|
|
0.36
|
|
|
|
(71.6%)
|
Adjusted Diluted Net
Earnings per Share ($/Share)¹
|
|
|
|
0.38
|
|
|
|
0.67
|
|
|
|
(42.8%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash inflows from
operating activities
|
|
|
|
110,385
|
|
|
|
132,069
|
|
|
|
(16.4%)
|
Free Cash
Flow¹
|
|
|
|
(37,513)
|
|
|
|
82,259
|
|
|
|
(145.6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at
|
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
|
|
%
Change
|
Long-term debt -
principal
|
|
|
|
5,439,072
|
|
|
|
5,566,075
|
|
|
|
(2.3%)
|
Long-term debt -
carrying value
|
|
|
|
5,323,705
|
|
|
|
5,446,958
|
|
|
|
(2.3%)
|
Cash -
operational
|
|
|
|
266,513
|
|
|
|
392,853
|
|
|
|
(32.2%)
|
_____________________________
|
1 Non-IFRS measure. For important
information on The Stars Group's non-IFRS measures, see below under
"Non-IFRS Measures" and the tables under "Reconciliation of
Non-IFRS Measures to Nearest IFRS Measures".
|
- Revenue – Revenue for the quarter increased primarily as
a result of the contribution of revenue from Sky Betting &
Gaming and BetEasy, as described below.
- U.S. Sports Betting – On May 8,
2019, The Stars Group and FOX Sports, a unit of Fox
Corporation (Nasdaq: FOXA, FOX), announced plans to launch FOX Bet,
the first-of-its-kind national media and sports wagering
partnership in the United States.
In addition to the commercial agreement of up to 25 years and
associated product launches, exclusive trademark, advertising and
editorial integration rights and licenses, Fox Corporation also
acquired 14,352,331 newly issued common shares in The Stars Group,
representing 4.99% of The Stars Group's issued and outstanding
common shares, at a price of $16.4408
per share, for aggregate proceeds of approximately $236 million. Prior to the tenth anniversary of
the commercial agreement, and subject to certain conditions and
applicable gaming regulatory approvals, FOX Sports has the right to
acquire up to a 50% equity stake in The Stars Group's U.S.
business.
- Debt and Cash – During the quarter, The Stars Group
prepaid $100 million outstanding on
its USD first lien term loan, ending the quarter with approximately
$267 million in operational cash and
$5.3 billion in of debt on its
balance sheet, resulting in Net Debt of $5.1
billion. Following the end of the quarter, The Stars Group
prepaid an additional $250 million
outstanding on its first lien term loans using a combination of the
proceeds from the issuance of common shares to Fox and cash on its
balance sheet, which would have brought its Net Debt to below
$4.9 billion.
International
|
|
Three Months Ended
March 31,
|
|
In thousands of U.S.
Dollars (except otherwise noted)
|
|
2019
|
|
|
2018
|
|
|
%
Change
|
|
Stakes
|
|
|
275,259
|
|
|
|
222,985
|
|
|
|
23.4%
|
|
Betting Net Win
Margin (%)
|
|
|
7.3%
|
|
|
|
7.5%
|
|
|
|
(2.7)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Poker
|
|
|
214,149
|
|
|
|
245,870
|
|
|
|
(12.9)%
|
|
Poker
Constant Currency Revenue
|
|
|
234,856
|
|
|
|
245,870
|
|
|
|
(4.5)%
|
|
Gaming
|
|
|
98,908
|
|
|
|
106,710
|
|
|
|
(7.3)%
|
|
Gaming
Constant Currency Revenue
|
|
|
108,112
|
|
|
|
106,710
|
|
|
|
1.3%
|
|
Betting
|
|
|
20,049
|
|
|
|
16,686
|
|
|
|
20.2%
|
|
Betting Constant Currency Revenue
|
|
|
21,905
|
|
|
|
16,686
|
|
|
|
31.3%
|
|
Other
|
|
|
7,507
|
|
|
|
12,500
|
|
|
|
(39.9%)
|
|
Other
Constant Currency Revenue
|
|
|
8,173
|
|
|
|
12,500
|
|
|
|
(34.6%)
|
|
Total
revenue
|
|
|
340,613
|
|
|
|
381,766
|
|
|
|
(10.8%)
|
|
Constant
Currency Revenue
|
|
|
373,046
|
|
|
|
381,766
|
|
|
|
(2.3%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QAUs
(millions)
|
|
|
2.2
|
|
|
|
2.2
|
|
|
|
(2.9%)
|
|
QNY
($/QAU)
|
|
|
154
|
|
|
|
165
|
|
|
|
(6.7%)
|
|
Constant Currency
Revenue QNY
|
|
|
169
|
|
|
|
165
|
|
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
(excluding depreciation and amortization)
|
|
|
260,442
|
|
|
|
304,846
|
|
|
|
(14.6%)
|
|
Gross profit margin
(%)
|
|
|
76.5%
|
|
|
|
79.9%
|
|
|
|
(4.2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
98,975
|
|
|
|
105,220
|
|
|
|
(5.9%)
|
|
Sales and
marketing2
|
|
|
40,282
|
|
|
|
44,969
|
|
|
|
(10.4%)
|
|
Research and
development
|
|
|
6,602
|
|
|
|
7,819
|
|
|
|
(15.6%)
|
|
Operating
income
|
|
|
114,583
|
|
|
|
146,838
|
|
|
|
(22.0%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA¹
|
|
|
159,340
|
|
|
|
186,407
|
|
|
|
(14.5%)
|
|
Adjusted EBITDA
Margin (%)¹
|
|
|
46.8%
|
|
|
|
48.8%
|
|
|
|
(4.2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Deposits
(millions)
|
|
|
317
|
|
|
|
353
|
|
|
|
(10.2%)
|
|
____________________________
|
1 Non-IFRS measure. For important
information on The Stars Group's non-IFRS measures, see below under
"Non-IFRS Measures" and the tables under "Reconciliation of
Non-IFRS Measures to Nearest IFRS Measures".
|
2 Sales and marketing includes $1.5
million for the quarter ended March 31, 2019 that the Corporation
excluded from its consolidated results as it related to certain
non-gaming related transactions with the United Kingdom
segment.
|
- Poker – Poker revenue decreased year-over-year, in-line
with expectations, primarily driven by foreign exchange
fluctuations. Constant Currency Revenue for Poker declined 5%
year-over-year primarily as a result of continued headwinds in
certain markets, including reduced deposits by customers as a
result of local restrictions on some methods of payment processing
and on certain methods of downloading The Stars Group's poker
applications, which was partially offset by continued organic
growth in most other markets.
- Gaming – Gaming revenue for the quarter decreased
primarily as a result of foreign exchange fluctuations. Constant
Currency Revenue for Gaming increased 1% year-over-year primarily
driven by continued organic growth from product launches such as
"Spin of the Day" and the continued rollout of new casino games.
This more than offset the impact of the cessation of operations in
certain markets in the first quarter, notably Switzerland (gaming and betting) and
Slovakia (gaming, betting and
poker) and operational challenges in certain markets, including
local restrictions on some methods of payment processing.
- Betting - Betting revenue increased 20%
year-over-year, despite also facing foreign exchange headwinds (as
Constant Currency Revenue for Betting increased 31% year-over-year)
and the cessation of operations in certain markets as noted above.
The growth was primarily the result of an increase in Stakes and
customer engagement, driven by new markets and certain product
launches, including "Request-A-Bet", leveraging the strength of the
equivalent innovative Sky Bet product. Betting Net Win Margin was
relatively flat year-over-year.
- Customers – QAUs decreased primarily due to reduced
activity in certain markets and the closure of certain markets,
each as noted above.
United Kingdom
|
|
Three Months Ended
March 31,
|
|
In thousands of U.S.
Dollars (except otherwise noted)
|
|
2019
|
|
|
2018
|
|
|
%
Change
|
|
Stakes
|
|
|
1,504,972
|
|
|
|
—
|
|
|
|
—
|
|
Betting Net Win
Margin (%)
|
|
|
5.0%
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Poker
|
|
|
3,290
|
|
|
|
—
|
|
|
|
—
|
|
Gaming
|
|
|
90,303
|
|
|
|
—
|
|
|
|
—
|
|
Betting
|
|
|
74,497
|
|
|
|
—
|
|
|
|
—
|
|
Other2
|
|
|
11,007
|
|
|
|
—
|
|
|
|
—
|
|
Total
revenue
|
|
|
179,097
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QAUs
(millions)
|
|
|
2.1
|
|
|
|
—
|
|
|
|
—
|
|
QNY
($/QAU)
|
|
|
78
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
(excluding depreciation and amortization)
|
|
|
121,525
|
|
|
|
—
|
|
|
|
—
|
|
Gross profit margin
(%)
|
|
|
67.9%
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
108,587
|
|
|
|
—
|
|
|
|
—
|
|
Sales and
marketing
|
|
|
34,594
|
|
|
|
—
|
|
|
|
—
|
|
Research and
development
|
|
|
4,336
|
|
|
|
—
|
|
|
|
—
|
|
Operating
loss
|
|
|
(25,992)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA¹
|
|
|
42,219
|
|
|
|
—
|
|
|
|
—
|
|
Adjusted EBITDA
Margin (%)¹
|
|
|
23.6%
|
|
|
|
—
|
|
|
|
—
|
|
____________________________
|
1
|
Non-IFRS measure. For
important information on The Stars Group's non-IFRS measures, see
below under "Non-IFRS Measures" and the tables under
"Reconciliation of Non-IFRS Measures to Nearest IFRS
Measures".
|
2
|
Other revenue
includes $1.5 million for the quarter ended March 31, 2019, that
the Corporation excluded from its consolidated results as it
related to certain non-gaming related transactions with the
International segment.
|
- Revenue – Revenue for the quarter was negatively
impacted by a record low Betting Net Win Margin due to a
combination of operator-unfavorable sporting results and planned
investment in promotional activity, primarily relating to the
Cheltenham Festival, one of the U.K.'s most popular horse racing
events. The promotional activity was particularly successful and
contributed to the growth in QAUs and Stakes as noted below,
accelerating the underlying performance of the segment during the
quarter which, despite the short-term impact to Betting Net Win
Margin and revenues, The Stars Group expects will support its
expectations for the United
Kingdom segment for the remainder of the year and into the
medium-term.
- Customers – Growth in QAUs and Stakes were very
strong for the quarter primarily driven by Sky Bet as a result of
the successful promotional activity noted above and continued
product improvements. QAUs also benefited from the continued
roll-out of personalized promotions and new and exclusive Gaming
content across the Sky Betting & Gaming brands, including the
launch of Sky Vegas Creations, which emphasizes exclusive gaming
content.
Australia
|
|
Three Months Ended
March 31,
|
|
In thousands of U.S.
Dollars (except otherwise noted)
|
|
2019
|
|
|
2018
1
|
|
|
%
Change
|
|
Stakes
|
|
|
754,326
|
|
|
|
157,457
|
|
|
|
379%
|
|
Betting Net Win
Margin (%)
|
|
|
8.1%
|
|
|
|
7.1%
|
|
|
|
15%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Betting
|
|
|
61,120
|
|
|
|
11,125
|
|
|
|
449%
|
|
Other
|
|
|
1,054
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
|
|
62,174
|
|
|
|
11,125
|
|
|
|
458.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QAUs
(millions)
|
|
|
0.21
|
|
|
|
—
|
|
|
|
—
|
|
QNY
($/QAU)
|
|
|
285
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
(excluding depreciation and amortization)
|
|
|
37,281
|
|
|
|
7,636
|
|
|
|
388.2%
|
|
Gross profit margin
(%)
|
|
|
60.0%
|
|
|
|
68.6%
|
|
|
|
(12.6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
26,082
|
|
|
|
4,337
|
|
|
|
501.4%
|
|
Sales and
marketing
|
|
|
10,764
|
|
|
|
4,211
|
|
|
|
155.6%
|
|
Research and
development
|
|
|
1,573
|
|
|
|
216
|
|
|
|
628.2%
|
|
Operating
loss
|
|
|
(1,138)
|
|
|
|
(1,128)
|
|
|
|
0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
2
|
|
|
8,630
|
|
|
|
(846)
|
|
|
|
(1120.1%)
|
|
Adjusted EBITDA
Margin (%) 2
|
|
|
13.9%
|
|
|
|
(7.6%)
|
|
|
|
(282.5%)
|
|
_____________________________
|
1
|
The acquisition of
62% of BetEasy occurred on February 27, 2018 with the acquisition
of a further 18% of BetEasy and BetEasy's acquisition of the
William Hill Australia business occurring subsequent to the first
quarter of 2018.
|
2
|
Non-IFRS measure. For
important information on The Stars Group's non-IFRS measures, see
below under "Non-IFRS Measures" and the tables under
"Reconciliation of Non-IFRS Measures to Nearest IFRS
Measures".
|
- Revenue – Revenue for the quarter was marginally
impacted by a lower Betting Net Win Margin as compared to the
historical long-term average of approximately 8.5% primarily due to
a combination of operator-unfavorable sports results as well as
promotional spend as BetEasy maintained its position as one of the
market leaders in Australia.
- Customers – The successful migration of William
Hill Australia customers to the rebranded BetEasy platform last
year continued to drive growth in QAUs through further reactivation
of customers with over 90% of the William Hill Australia customers
subsequently becoming active on the BetEasy platform. The focus on
improving the customer experience also continued, with the launch
of MyRewards toward the end of the quarter, which allows for
targeted, personalized promotions.
For additional information regarding The Stars Group's reporting
segments and major lines of operations, please see The Stars
Group's interim condensed consolidated financial statements for the
quarter ended March 31, 2019 (the "Q1
2019 Financial Statements"), including note 5 therein, and
management's discussion and analysis thereon (the "Q1 2019
MD&A").
Consolidated Financial Statements, Management's Discussion
and Analysis and Additional Information
The Stars Group's Q1 2019 Financial Statements, Q1 2019
MD&A, and additional information relating to The Stars Group
and its business, can be found on SEDAR at www.sedar.com, Edgar at
www.sec.gov and The Stars Group's website at www.starsgroup.com.
The financial information presented in this news releases was
derived from the 2018 Annual Financial Statements.
In addition to press releases, securities filings and public
conference calls and webcasts, The Stars Group intends to use its
investor relations page on its website as a means of disclosing
material information to its investors and others and for complying
with its disclosure obligations under applicable securities laws.
Accordingly, investors and others should monitor the website in
addition to following The Stars Group's press releases, securities
filings and public conference calls and webcasts. This list may be
updated from time to time.
Conference Call and Webcast Details
The Stars Group will host a conference call today, May 15, 2019 at 8:30 a.m.
ET to discuss its financial results for the first quarter
2019 and related matters, and provide additional detail with
respect to the information in this news release, its webcast
presentation, and related Q1 2019 filings. To access via
tele-conference, please dial +1-877-451-6152 or +1-201-389-0879 ten
minutes prior to the scheduled start of the call. The playback will
be made available two hours after the event at +1-844-512-2921 or
+1-412-317-6671. The Conference ID number is 13690431. To access
the webcast please use the following link:
http://public.viavid.com/index.php?id=134412.
Reconciliation of Non-IFRS Measures to Nearest IFRS
Measures
The tables below present reconciliations of Adjusted EBITDA,
Adjusted Net Earnings and Adjusted Diluted Net Earnings per Share
to net earnings, which is the nearest IFRS measure. For additional
information, see "Reconciliations" in the Q1 2019 MD&A.
|
|
|
Quarter Ended
March 31, 2019
|
|
In thousands of U.S.
Dollars (except per share amounts)
|
|
|
International
|
|
|
|
United
Kingdom
|
|
|
|
Australia
|
|
|
|
Corporate
|
|
|
|
Consolidated
|
|
Net earnings
(loss)
|
|
|
114,583
|
|
|
|
(25,992)
|
|
|
|
(1,138)
|
|
|
|
(59,795)
|
|
|
|
27,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
recovery
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13,098
|
|
|
|
13,098
|
|
Net financing
charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(46,977)
|
|
|
|
(46,977)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
114,583
|
|
|
|
(25,992)
|
|
|
|
(1,138)
|
|
|
|
(25,916)
|
|
|
|
61,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
37,979
|
|
|
|
61,671
|
|
|
|
9,442
|
|
|
|
202
|
|
|
|
109,294
|
|
Add (deduct) the
impact of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,736
|
|
|
|
2,736
|
|
Gains from
investments
|
|
|
(67)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(67)
|
|
Impairment of
intangible assets
|
|
|
12
|
|
|
|
142
|
|
|
|
—
|
|
|
|
—
|
|
|
|
154
|
|
Other costs
|
|
|
6,833
|
|
|
|
6,398
|
|
|
|
326
|
|
|
|
8,144
|
|
|
|
21,701
|
|
Total adjusting
items
|
|
|
6,778
|
|
|
|
6,540
|
|
|
|
326
|
|
|
|
10,880
|
|
|
|
24,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
159,340
|
|
|
|
42,219
|
|
|
|
8,630
|
|
|
|
(14,834)
|
|
|
|
195,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
March 31, 2018
|
|
In thousands of U.S.
Dollars (except per share amounts)
|
|
|
International
|
|
|
|
United
Kingdom
|
|
|
|
Australia
|
|
|
|
Corporate
|
|
|
|
Consolidated
|
|
Net earnings
(loss)
|
|
|
146,838
|
|
|
|
—
|
|
|
|
(1,128)
|
|
|
|
(71,349)
|
|
|
|
74,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,155)
|
|
|
|
(1,155)
|
|
Net financing
charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(38,351)
|
|
|
|
(38,351)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
146,838
|
|
|
|
—
|
|
|
|
(1,128)
|
|
|
|
(31,843)
|
|
|
|
113,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
37,969
|
|
|
|
—
|
|
|
|
1,280
|
|
|
|
9
|
|
|
|
39,258
|
|
Add (deduct) the
impact of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
costs and deal contingent forwards
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
15,191
|
|
|
|
15,191
|
|
Stock-based
compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,383
|
|
|
|
2,383
|
|
Loss (gain) from
investments
|
|
|
517
|
|
|
|
—
|
|
|
|
(5)
|
|
|
|
—
|
|
|
|
512
|
|
Impairment of
intangible assets
|
|
|
115
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
115
|
|
Other costs
(income)
|
|
|
968
|
|
|
|
—
|
|
|
|
(993)
|
|
|
|
3,721
|
|
|
|
3,696
|
|
Total adjusting
items
|
|
|
1,600
|
|
|
|
—
|
|
|
|
(998)
|
|
|
|
21,295
|
|
|
|
21,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
186,407
|
|
|
|
—
|
|
|
|
(846)
|
|
|
|
(10,539)
|
|
|
|
175,022
|
|
|
|
Three Months Ended
March 31,
|
|
In thousands of U.S.
Dollars (except per share amounts)
|
|
2019
|
|
|
2018
|
|
Net
earnings
|
|
|
27,658
|
|
|
|
74,361
|
|
Income tax (recovery)
expense
|
|
|
(13,098)
|
|
|
|
1,155
|
|
Net earnings
before tax
|
|
|
14,560
|
|
|
|
75,516
|
|
Add (deduct) the
impact of the following:
|
|
|
|
|
|
|
|
|
Interest
accretion
|
|
|
8,269
|
|
|
|
12,051
|
|
Re-measurement of
contingent consideration
|
|
|
(9,378)
|
|
|
|
—
|
|
Re-measurement of
embedded derivative
|
|
|
(22,600)
|
|
|
|
—
|
|
Unrealized foreign
exchange loss on financial instruments associated with financing activities
|
|
|
1,632
|
|
|
|
—
|
|
Ineffectiveness on
cash flow hedges
|
|
|
1,856
|
|
|
|
—
|
|
Acquisition-related
costs and deal contingent forwards
|
|
|
—
|
|
|
|
15,191
|
|
Amortization of
acquisition intangibles
|
|
|
89,955
|
|
|
|
31,376
|
|
Stock-based
compensation
|
|
|
2,736
|
|
|
|
2,383
|
|
Loss from
investments
|
|
|
(67)
|
|
|
|
512
|
|
Impairment of
intangibles assets
|
|
|
154
|
|
|
|
115
|
|
Other costs
|
|
|
21,701
|
|
|
|
3,696
|
|
Adjust for income tax
expense
|
|
|
(3,218)
|
|
|
|
(2,078)
|
|
Adjusted Net
Earnings
|
|
|
105,600
|
|
|
|
138,762
|
|
Adjusted Net
Earnings attributable to
|
|
|
|
|
|
|
|
|
Shareholders of The
Stars Group Inc.
|
|
|
104,826
|
|
|
|
140,232
|
|
Non-controlling
interest
|
|
|
774
|
|
|
|
(1,470)
|
|
|
|
|
|
|
|
|
|
|
Diluted
Shares
|
|
|
273,946,225
|
|
|
|
209,495,673
|
|
Adjusted Diluted
Net Earnings per Share
|
|
|
0.38
|
|
|
|
0.67
|
|
|
|
|
|
|
|
|
|
|
The table below presents certain items comprising "Other costs"
in the reconciliation tables above:
|
|
Quarter Ended
March 31,
|
|
|
|
2019
|
|
|
2018
|
|
In thousands of U.S.
Dollars
|
|
|
|
|
|
|
|
|
Integration costs of
acquired businesses
|
|
|
8,023
|
|
|
|
—
|
|
Financial expenses
(income)
|
|
|
1,030
|
|
|
|
(2,281)
|
|
Restructuring
expenses
|
|
|
3,909
|
|
|
|
632
|
|
AMF and other
investigation professional fees
|
|
|
2,709
|
|
|
|
1,784
|
|
Lobbying (US and
Non-US) and other legal expenses
|
|
|
3,272
|
|
|
|
2,993
|
|
Professional fees in
connection with non-core activities
|
|
|
1,820
|
|
|
|
451
|
|
Retention
bonuses
|
|
|
—
|
|
|
|
117
|
|
Other
|
|
|
938
|
|
|
|
—
|
|
Other
costs
|
|
|
21,701
|
|
|
|
3,696
|
|
The table below presents a reconciliation of Free Cash Flow to
net cash flows from operating activities, which is the nearest IFRS
measure:
|
Quarter Ended
March 31,
|
|
In thousands of U.S.
Dollars
|
2019
|
|
|
2018
|
|
Net cash inflows from
operating activities
|
|
110,385
|
|
|
|
132,069
|
|
Customer deposit
liability movement
|
|
(15,341)
|
|
|
|
189
|
|
|
|
95,044
|
|
|
|
132,258
|
|
Capital
Expenditure:
|
|
|
|
|
|
|
|
Additions to deferred
development costs
|
|
(20,146)
|
|
|
|
(6,431)
|
|
Additions to property
and equipment
|
|
(4,047)
|
|
|
|
(3,585)
|
|
Additions to
intangible assets
|
|
(4,534)
|
|
|
|
(2,427)
|
|
Interest
paid
|
|
(91,761)
|
|
|
|
(31,488)
|
|
Debt servicing cash
flows (excluding voluntary prepayments)
|
|
(12,069)
|
|
|
|
(6,068)
|
|
Free Cash
Flow
|
|
(37,513)
|
|
|
|
82,259
|
|
The table below presents a reconciliation of Net Debt:
|
|
|
|
In thousands of U.S.
Dollars
|
As at March 31,
2019
|
|
Current portion of
long-term debt
|
|
131,750
|
|
Long-term
debt
|
|
5,191,955
|
|
Less: Cash and cash
equivalents - operational
|
|
266,513
|
|
Net
Debt
|
|
5,057,192
|
|
About The Stars Group
The Stars Group is a provider of technology-based product
offerings in the global gaming and interactive entertainment
industries. Its brands have millions of registered customers
globally and collectively are leaders in online and mobile betting,
poker, casino and other gaming-related offerings. The Stars Group
owns or licenses gaming and related consumer businesses and brands,
including PokerStars, PokerStars Casino, BetStars, Full Tilt, FOX
Bet, BetEasy, Sky Bet, Sky Vegas,
Sky Casino, Sky Bingo, Sky Poker,
and Oddschecker, as well as live poker tour and events brands,
including the PokerStars Players No Limit Hold'em Championship,
European Poker Tour, PokerStars Caribbean Adventure, Latin American
Poker Tour, Asia Pacific Poker Tour, PokerStars Festival and
PokerStars MEGASTACK. The Stars Group is one of the world's most
licensed online gaming operators with its subsidiaries collectively
holding licenses or approvals in 21 jurisdictions throughout the
world, including in Europe,
Australia, and the Americas. The
Stars Group's vision is to become the world's favorite iGaming
destination and its mission is to provide its customers with
winning moments.
Cautionary Note Regarding Forward Looking Statements
This news release contains forward-looking statements and
information within the meaning of the Private Securities Litigation
Reform Act of 1995 and applicable securities laws, including,
without limitation, certain financial and operational expectations
and projections, such as certain future operational and growth
plans and strategies, and certain financial items relating to the
full year 2019 results, as well as the partnership between The
Stars Group and FOX Sports, a unit of FOX Corporation, and rights
and obligations related thereto. Forward-looking statements and
information can, but may not always, be identified by the use of
words such as "seek", "anticipate", "plan", "continue", "estimate",
"expect", "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", "would", "should",
"believe", "objective", "ongoing", "imply", "assumes", "goal",
"likely" and similar references to future periods or the negatives
of these words or variations or synonyms of these words or
comparable terminology and similar expressions. These statements
and information, other than statements of historical fact, are
based on management's current expectations and are subject to a
number of risks, uncertainties, and assumptions, including market
and economic conditions, business prospects or opportunities,
future plans and strategies, projections, technological
developments, anticipated events and trends and regulatory changes
that affect The Stars Group, its subsidiaries, and its and their
respective customers and industries. Although The Stars Group and
management believe the expectations reflected in such
forward-looking statements and information are reasonable and are
based on reasonable assumptions and estimates as of the date
hereof, there can be no assurance that these assumptions or
estimates are accurate or that any of these expectations will prove
accurate. Forward-looking statements are inherently subject to
significant business, regulatory, economic and competitive risks,
uncertainties and contingencies that could cause actual events to
differ materially from those expressed or implied in such
statements. Specific risks and uncertainties include, but are not
limited to: customer and operator preferences and changes in the
economy; reputation and brand growth; competition and the
competitive environment within addressable markets and industries;
macroeconomic conditions and trends in the gaming and betting
industry; ability to predict fluctuations in financial results from
quarter to quarter; ability to mitigate tax risks and adverse tax
consequences, including, without limitation, changes in tax laws or
administrative policies relating to tax and the imposition of new
or additional taxes, such as value-added and point of consumption
taxes, and gaming duties; The Stars Group's substantial
indebtedness requires that it use a significant portion of its cash
flow to make debt service payments; impact of inability to complete
future or announced acquisitions or to integrate businesses
successfully, including, without limitation, Sky Betting &
Gaming and BetEasy; contractual relationships of The Stars Group or
any of its subsidiaries with FOX Corporation, FOX Sports and Sky
plc and/or their respective subsidiaries; an ability to realize all
or any of The Stars Group's estimated synergies and cost savings in
connection with acquisitions, including, without limitation, the
acquisition of Sky Betting & Gaming and the Australian
acquisitions; ability to mitigate foreign exchange and
currency risks; legal and regulatory requirements; potential
changes to the gaming regulatory framework; the heavily regulated
industry in which The Stars Group carries on its business; ability
to obtain, maintain and comply with all applicable and required
licenses, permits and certifications to offer, operate and market
its product offerings, including difficulties or delays in the
same; social responsibility concerns and public opinion; protection
of proprietary technology and intellectual property rights;
intellectual property infringement or invalidity claims; and
systems, networks, telecommunications or service disruptions or
failures or cyber-attacks and failure to protect customer data,
including personal and financial information. These factors
are not intended to represent a complete list of the factors that
could affect The Stars Group; however, these factors as well as
other applicable risks and uncertainties include, but are not
limited to, those identified in its most recently filed annual
information form, including under the heading "Risk Factors and
Uncertainties", and in its most recently filed management's
discussion and analysis, including under the headings "Caution
Regarding Forward-Looking Statements", "Risk Factors and
Uncertainties" and "Non-IFRS Measures, Key Metrics and Other Data",
each available on SEDAR at www.sedar.com, EDGAR at www.sec.gov and
The Stars Group's website at www.starsgroup.com, and in other
filings that The Stars Group has made and may make in the future
with applicable securities authorities in the future, should be
considered carefully. Investors are cautioned not to put undue
reliance on forward-looking statements or information. Any
forward-looking statement or information in this news release are
expressly qualified by this cautionary statement. Any
forward-looking statement or information speaks only as of the date
hereof, and The Stars Group undertakes no obligation to correct or
update any forward-looking statement, whether as a result of new
information, future events or otherwise, except as required by
applicable law.
Non-IFRS Measures
This news release references non-IFRS financial measures. The
Stars Group believes these non-IFRS financial measures will provide
investors with useful supplemental information about the financial
and operational performance of its business, enable comparison of
financial results between periods where certain items may vary
independent of business performance, and allow for greater
transparency with respect to key metrics used by management in
operating its business, identifying and evaluating trends, and
making decisions. The Stars Group believes that such non-IFRS
financial measures provide useful information about its underlying,
core operating results and trends, enhance the overall
understanding of its past performance and future prospects and
allow for greater transparency with respect to metrics and measures
used by management in its financial and operational
decision-making.
Although management believes these non-IFRS financial measures
are important in evaluating The Stars Group, they are not intended
to be considered in isolation or as a substitute for, or superior
to, financial information prepared and presented in accordance with
IFRS. They are not recognized measures under IFRS and do not have
standardized meanings prescribed by IFRS. These measures may be
different from non-IFRS financial measures used by other companies
any may not be comparable to similar meanings prescribed by other
companies, limiting its usefulness for comparison purposes.
Moreover, presentation of certain of these measures is provided for
period-over-period comparison purposes, and investors should be
cautioned that the effect of the adjustments thereto provided
herein have an actual effect on The Stars Group's operating
results. In addition to QNY, which is defined below under "Key
Metrics and Other Data", The Stars Group provides the following
non-IFRS measures in this news release:
Adjusted EBITDA means net earnings before financial expenses,
income tax expense (recovery), depreciation and amortization,
stock-based compensation, restructuring, net earnings (loss) on
associate and certain other items as set out in the reconciliation
tables under "above" below.
Adjusted EBITDA Margin means Adjusted EBITDA as a proportion of
total revenue.
Adjusted Net Earnings means net earnings before interest
accretion, amortization of intangible assets resulting from
purchase price allocations following acquisitions, stock-based
compensation, restructuring, net earnings (loss) on associate, and
certain other items. In addition, as previously disclosed, The
Stars Group makes adjustments for (i) the re-measurement of
contingent consideration, which was previously included in, and
adjusted for through, interest accretion, but starting with The
Stars Group's interim condensed consolidated financial statements
and related notes for the three and nine months ended September 30, 2018 (the "Q3 2018 Financial
Statements"), it is a separate line item, (ii) the re-measurement
of embedded derivatives and ineffectiveness on cash flow hedges,
each of which were new line items in the Q3 2018 Financial
Statements, and (iii) certain non-recurring tax adjustments and
settlements. Each adjustment to net earnings is then adjusted for
the tax impact, where applicable, in the respective jurisdiction to
which the adjustment relates. Adjusted Net Earnings and any other
non-IFRS measures used by The Stars Group that relies on or
otherwise incorporates Adjusted Net Earnings that was reported for
previous periods have not been restated under the updated
definition on the basis that The Stars Group believes that the
impact of the change to those periods would not be material.
Adjusted Diluted Net Earnings per Share means Adjusted Net
Earnings attributable to the Shareholders of The Stars Group
Inc. divided by Diluted Shares. Diluted Shares means the
weighted average number of Common Shares on a fully diluted basis,
including options, other equity-based awards such as warrants and
any convertible preferred shares of The Stars Group then
outstanding. The effects of anti-dilutive potential Common
Shares are ignored in calculating Diluted Shares. Diluted Shares
used in the calculation of diluted earnings per share may differ
from diluted shares used in the calculation of Adjusted Diluted Net
Earnings per Share where the dilutive effects of the potential
Common Shares differ. For the quarter ended March 31, 2019, Diluted Shares used for the
calculation of Adjusted Diluted Net Earnings per Share equalled
273,946,225, compared with 209,495,673 for the same period in
2018.
Constant Currency Revenue means IFRS reported revenue for the
relevant period calculated using the applicable prior year period's
monthly average exchange rates for its local currencies other than
the U.S. dollar. Currently, The Stars Group provides Constant
Currency Revenue for the International segment and its applicable
lines of operations. It does not currently provide Constant
Currency Revenue for the United
Kingdom and Australia
segments because The Stars Group does not yet have reported
comparative periods for these segments as a result of the
respective acquisition dates.
Free Cash Flow means net cash flows from operating activities
after adding back customer deposit liability movements, and after
capital expenditures and debt servicing cash flows (excluding
voluntary prepayments).
Net Debt means total long-term debt less operational cash.
For additional information on certain of The Stars Group's
non-IFRS measures and the reasons why it believes such measures are
useful, see above and the Q1 2019 MD&A, including under the
headings "Management's Discussion and Analysis", "Non-IFRS
Measures, Key Metrics and Other Data", "Segment Results of
Operations" and "Reconciliations".
Key Metrics and Other Data
The Stars Group provides the following key metrics in this news
release:
QAUs for the International and Australia reporting segments means active
unique customers (online, mobile and desktop client) who (i) made a
deposit or transferred funds into their real-money account with The
Stars Group at any time, and (ii) generated real-money online rake
or placed a real-money online bet or wager on during the applicable
quarterly period. The Stars Group defines "active unique customer"
as a customer who played or used one of its real-money offerings at
least once during the period, and excludes duplicate counting, even
if that customer is active across multiple lines of operation
(poker, gaming and/or betting, as applicable) within the applicable
reporting segment. The definition of QAUs excludes customer
activity from certain low-stakes, non-raked real-money poker games,
but includes real-money activity by customers using funds (cash and
cash equivalents) deposited by The Stars Group into such customers'
previously funded accounts as promotions to increase their lifetime
value.
QAUs for the United Kingdom
reporting segment (which currently includes the Sky Betting &
Gaming business operations only) means active unique customers
(online and mobile) who have settled a Stake or made a wager on any
betting or gaming product within the applicable quarterly period.
The Stars Group defines active unique customer for the United Kingdom reporting segment as a customer
who played at least once on one of its real-money offerings during
the period, and excludes duplicate counting, even if that customer
is active across more than one line of operation.
QNY means combined revenue for its lines of operation (i.e.,
Poker, Gaming and/or Betting, as applicable) for each reporting
segment, excluding Other revenue, as reported during the applicable
quarterly period (or as adjusted to the extent any accounting
reallocations are made in later periods) divided by the total QAUs
during the same period.
Net Deposits for the International segment means the aggregate
of gross deposits or transfer of funds made by customers into their
real-money online accounts less withdrawals or transfer of funds by
such customers from such accounts, in each case during the
applicable quarterly period. Gross deposits exclude (i) any
deposits, transfers or other payments made by such customers into
The Stars Group's play-money and social gaming offerings, and (ii)
any real-money funds (cash and cash equivalents) deposited by The
Stars Group into such customers' previously funded accounts as
promotions to increase their lifetime value.
Stakes means betting amounts wagered on The Stars Group's
applicable online betting product offerings, and is also an
industry term that represents the aggregate amount of funds wagered
by customers within the betting line of operation for the period
specified.
Betting Net Win Margin means Betting revenue as a proportion of
Stakes.
The Stars Group is also continuing the process of integrating
its recent acquisitions, as applicable, and implementing its
recently changed operating and reporting segments, and once
complete, The Stars Group may revise or remove currently presented
key metrics or report certain additional or other measures in the
future.
For additional information on The Stars Group's key metrics and
other data, see the Q1 2019 MD&A, including under the headings
"Non-IFRS Measures, Key Metrics and Other Data" and "Segment
Results of Operations".
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS
|
|
|
|
Three Months Ended
March 31,
|
|
In thousands of U.S.
Dollars (except per share amounts)
|
|
|
|
2019
|
|
|
2018
|
|
Revenue
|
|
|
|
|
580,384
|
|
|
|
392,891
|
|
Cost of revenue
(excluding depreciation and amortization)
|
|
|
|
|
(162,636)
|
|
|
|
(80,264)
|
|
Gross profit
(excluding depreciation and amortization)
|
|
|
|
|
417,748
|
|
|
|
312,627
|
|
General and
administrative
|
|
|
|
|
(259,357)
|
|
|
|
(141,307)
|
|
Sales and
marketing
|
|
|
|
|
(84,343)
|
|
|
|
(49,418)
|
|
Research and
development
|
|
|
|
|
(12,511)
|
|
|
|
(8,035)
|
|
Operating
income
|
|
|
|
|
61,537
|
|
|
|
113,867
|
|
Gain on
re-measurement of deferred contingent payment
|
|
|
|
|
9,378
|
|
|
|
—
|
|
Gain on
re-measurement of Embedded Derivatives
|
|
|
|
|
22,600
|
|
|
|
—
|
|
Unrealized foreign
exchange loss on financial instruments
associated with
financing activities
|
|
|
|
|
(1,632)
|
|
|
|
—
|
|
Other net financing
charges
|
|
|
|
|
(77,323)
|
|
|
|
(38,351)
|
|
Net financing
charges
|
|
|
|
|
(46,977)
|
|
|
|
(38,351)
|
|
Earnings before
income taxes
|
|
|
|
|
14,560
|
|
|
|
75,516
|
|
Income tax recovery
(expense)
|
|
|
|
|
13,098
|
|
|
|
(1,155)
|
|
Net
earnings
|
|
|
|
|
27,658
|
|
|
|
74,361
|
|
Net earnings
(loss) attributable to
|
|
|
|
|
|
|
|
|
|
|
Shareholders of The
Stars Group Inc.
|
|
|
|
|
27,913
|
|
|
|
75,451
|
|
Non-controlling
interest
|
|
|
|
|
(255)
|
|
|
|
(1,090)
|
|
Net
earnings
|
|
|
|
|
27,658
|
|
|
|
74,361
|
|
Earnings per
Common Share (U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.10
|
|
|
$
|
0.51
|
|
Diluted
|
|
|
|
$
|
0.10
|
|
|
$
|
0.36
|
|
Weighted average
Common Shares outstanding (thousands)
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
273,368
|
|
|
|
148,233
|
|
Diluted
|
|
|
|
|
273,946
|
|
|
|
209,496
|
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
|
|
|
|
As at
March 31,
|
|
|
As at December
31,
|
|
In thousands of U.S.
Dollars
|
|
|
|
2019
|
|
|
2018
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents -
operational
|
|
|
|
|
266,513
|
|
|
|
392,853
|
|
Cash and cash equivalents -
customer deposits
|
|
|
|
|
333,205
|
|
|
|
328,223
|
|
Total cash and cash
equivalents
|
|
|
|
|
599,718
|
|
|
|
721,076
|
|
Restricted cash
advances and collateral
|
|
|
|
|
11,479
|
|
|
|
10,819
|
|
Prepaid expenses and
other current assets
|
|
|
|
|
49,254
|
|
|
|
43,945
|
|
Current investments -
customer deposits
|
|
|
|
|
106,507
|
|
|
|
103,153
|
|
Accounts
receivable
|
|
|
|
|
118,142
|
|
|
|
136,347
|
|
Income tax
receivable
|
|
|
|
|
24,753
|
|
|
|
26,085
|
|
Total current
assets
|
|
|
|
|
909,853
|
|
|
|
1,041,425
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
|
|
Restricted cash
advances and collateral
|
|
|
|
|
10,517
|
|
|
|
10,630
|
|
Prepaid expenses and
other non-current assets
|
|
|
|
|
31,787
|
|
|
|
32,760
|
|
Non-current accounts
receivable
|
|
|
|
|
18,727
|
|
|
|
14,906
|
|
Property and
equipment
|
|
|
|
|
147,571
|
|
|
|
85,169
|
|
Income tax
receivable
|
|
|
|
|
23,178
|
|
|
|
15,611
|
|
Deferred income
taxes
|
|
|
|
|
2,253
|
|
|
|
1,775
|
|
Derivatives
|
|
|
|
|
96,122
|
|
|
|
54,583
|
|
Intangible
assets
|
|
|
|
|
4,734,896
|
|
|
|
4,742,699
|
|
Goodwill
|
|
|
|
|
5,320,324
|
|
|
|
5,265,980
|
|
Total non-current
assets
|
|
|
|
|
10,385,375
|
|
|
|
10,224,113
|
|
Total
assets
|
|
|
|
|
11,295,228
|
|
|
|
11,265,538
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
other liabilities
|
|
|
|
|
335,066
|
|
|
|
424,007
|
|
Customer
deposits
|
|
|
|
|
436,694
|
|
|
|
423,739
|
|
Current
provisions
|
|
|
|
|
28,870
|
|
|
|
39,189
|
|
Derivatives
|
|
|
|
|
17,726
|
|
|
|
16,493
|
|
Income tax
payable
|
|
|
|
|
66,802
|
|
|
|
72,796
|
|
Current portion of
lease liability
|
|
|
|
|
18,996
|
|
|
|
—
|
|
Current portion of
long-term debt
|
|
|
|
|
131,750
|
|
|
|
35,750
|
|
Total current
liabilities
|
|
|
|
|
1,035,904
|
|
|
|
1,011,974
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
|
|
Lease
liability
|
|
|
|
|
48,405
|
|
|
|
—
|
|
Long-term
debt
|
|
|
|
|
5,191,955
|
|
|
|
5,411,208
|
|
Long-term
provisions
|
|
|
|
|
3,550
|
|
|
|
4,002
|
|
Derivatives
|
|
|
|
|
81,468
|
|
|
|
6,068
|
|
Other long-term
liabilities
|
|
|
|
|
72,799
|
|
|
|
79,716
|
|
Income tax
payable
|
|
|
|
|
27,388
|
|
|
|
18,473
|
|
Deferred income
taxes
|
|
|
|
|
576,629
|
|
|
|
580,697
|
|
Total non-current
liabilities
|
|
|
|
|
6,002,194
|
|
|
|
6,100,164
|
|
Total
liabilities
|
|
|
|
|
7,038,098
|
|
|
|
7,112,138
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
|
|
4,116,717
|
|
|
|
4,116,287
|
|
Reserves
|
|
|
|
|
(394,225)
|
|
|
|
(469,629)
|
|
Retained
earnings
|
|
|
|
|
530,674
|
|
|
|
502,761
|
|
Equity
attributable to the Shareholders of The Stars Group
Inc.
|
|
|
|
|
4,253,166
|
|
|
|
4,149,419
|
|
Non-controlling
interest
|
|
|
|
|
3,964
|
|
|
|
3,981
|
|
Total
equity
|
|
|
|
|
4,257,130
|
|
|
|
4,153,400
|
|
Total liabilities
and equity
|
|
|
|
|
11,295,228
|
|
|
|
11,265,538
|
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
Three Months Ended
March 31,
|
|
In thousands of U.S.
Dollars
|
|
2019
|
|
|
2018
|
|
Operating
activities
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
|
27,658
|
|
|
|
74,361
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
Income tax (recovery)
expense recognized in net earnings
|
|
|
(13,098)
|
|
|
|
1,155
|
|
Net financing
charges
|
|
|
45,345
|
|
|
|
37,615
|
|
Depreciation and
amortization
|
|
|
109,294
|
|
|
|
39,258
|
|
Stock-based
compensation
|
|
|
2,736
|
|
|
|
2,383
|
|
Unrealized gain on
foreign exchange
|
|
|
(7,837)
|
|
|
|
(4,425)
|
|
Unrealized gain on
investments
|
|
|
(243)
|
|
|
|
(1,033)
|
|
Impairment of
intangible assets
|
|
|
154
|
|
|
|
115
|
|
Realized loss on
current investments and promissory note
|
|
|
27
|
|
|
|
437
|
|
Income taxes
paid
|
|
|
(7,818)
|
|
|
|
(1,370)
|
|
Changes in non-cash
operating elements of working capital
|
|
|
(62,163)
|
|
|
|
(13,308)
|
|
Customer deposit
liability movement
|
|
|
15,341
|
|
|
|
(189)
|
|
Other
|
|
|
989
|
|
|
|
(2,930)
|
|
Net cash inflows
from operating activities
|
|
|
110,385
|
|
|
|
132,069
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
Acquisition of
subsidiaries, net of cash acquired
|
|
|
—
|
|
|
|
(101,703)
|
|
Additions to
intangible assets
|
|
|
(4,534)
|
|
|
|
(2,427)
|
|
Additions to property
and equipment
|
|
|
(4,047)
|
|
|
|
(3,585)
|
|
Additions to deferred
development costs
|
|
|
(20,146)
|
|
|
|
(6,431)
|
|
Net (purchase) sale
of investments utilizing customer deposits
|
|
|
(3,354)
|
|
|
|
12,447
|
|
Settlement of minimum
revenue guarantee
|
|
|
(675)
|
|
|
|
(2,713)
|
|
Other
|
|
|
—
|
|
|
|
575
|
|
Net cash outflows
from investing activities
|
|
|
(32,756)
|
|
|
|
(103,837)
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
Issuance of Common
Shares in relation to stock options
|
|
|
379
|
|
|
|
9,737
|
|
Repayment of
long-term debt
|
|
|
(108,938)
|
|
|
|
(6,068)
|
|
Repayment of lease
liability principal
|
|
|
(3,131)
|
|
|
|
—
|
|
Interest
paid
|
|
|
(91,761)
|
|
|
|
(31,488)
|
|
Proceeds on loan
issued to the holders of non-controlling interest
|
|
|
1,421
|
|
|
|
—
|
|
Net cash outflows
from financing activities
|
|
|
(202,030)
|
|
|
|
(27,819)
|
|
Decrease (increase)
in cash and cash equivalents
|
|
|
(124,401)
|
|
|
|
413
|
|
Unrealized foreign
exchange difference on cash and cash equivalents
|
|
|
3,043
|
|
|
|
1,850
|
|
Cash and cash
equivalents – beginning of period
|
|
|
721,076
|
|
|
|
510,323
|
|
Cash and cash
equivalents – end of period
|
|
|
599,718
|
|
|
|
512,586
|
|
View original
content:http://www.prnewswire.com/news-releases/the-stars-group-reports-first-quarter-2019-results-300850629.html
SOURCE The Stars Group Inc.