Turismo
GROUPE PARTOUCHE: Income 1st half-year 2019/2020 - Operation performance impacted by the sanitary issue - Solid financial situation
Paris, 16 July 2020, 06:00 pm
During the meeting it held on the 15 of July 2020 and after having reviewed the management report of Groupe Partouche Executive Board, the Supervisory Board examined the audited accounts for the 1 half-year 2019-2020 (November to April).
In view of the Covid 19 pandemic, business activity during the first half of the current financial year was penalized by the cessation of the Group's activities as from mid-March, with the exception of sports betting and online gaming in Belgium.
Over the period under review, the Gross Game Revenue (GGR) recorded a decrease of -20.6% to € 261.6 M and the turnover of -17.3% to € 183.6 M.
However, two indications of activity should be distinguished during the period: the GGR recorded satisfactory growth of + 5.1% between 1 November 2019 and the closure mid-March of the French casinos and those abroad, with the exclusion of sports betting and online gaming in Belgium, compared to the same period of the previous year; in addition, by neutralizing Boulogne-sur-Mer casino, included in the scope of consolidation in N-1 and whose operations ceased on 27 June, 2019, the growth of the GGR would amount to + 6.3%.
The Group's EBITDA fell to € 29.8 M, compared to € 44.8 M in the first half of 2019. This decrease was, however, mitigated by the first application of IFRS 16 during the period under review, which has the mechanical effect of improving EBITDA of € 7.3 M.
The current operating income (COI) reached € 0.3 M compared to € 23.3 M a year earlier, this contraction is directly correlated with the cessation of activity and therefore the turnover as of mid-March.
Under activity divisions, the COI of the casino sector reached € 6.6 M, compared to € 27.1 M in 2019 impacted by the closing of all the Group's casinos from mid-March, with the exception of the Aix-en-Provence Pasino which benefits from its renovation works, the first phase of which was completed in early April 2019 and whose COI is almost stable (- € 0.1 M).
The operating loss of COI in the “Other” sector increased mechanically to - € 4.7 M during the first half of 2020 (vs. - € 2.3 M in 1HY 2019), due to the increase in depreciation and impairment linked to the application of IFRS 16 for € 2.0 M.
Lastly, the operating income of the hotel sector slightly decreased to - € 1.7 M compared to - € 1.4 M in 2019, penalized by the renovation of the Aquabella in Aix-en-Provence.
The non-current operating income represents a net expense of - € 2.7 M, compared to a net expense of - € 1.9 M during 1HY 2019. In 2019, the expense included in particular the estimated cost of the ongoing restructuring of the Pasino in Aix-en-Provence and the shutdown of the activity at the 3.14 Hotel. Impairment of goodwill constitutes the main part of the net expense for the six-month period and is made up of the calculated impairments (- € 2.7 M).
In the end, the net income represents a loss of - € 3.9 M against a profit of € 16.6 M at 30 April, 2019, after taking into account the following items:
Furthermore, the impact of the application of IFRS 16 on consolidated net income is not significant (- € 0.1 M).
The Group's financial structure remains very healthy and solid with “cash net of levies” of € 78.9 M, shareholders' equity of € 384.1 M and a “net debt” of € 89.9 M (set up as provided by the terms of the syndicated loan agreement, according to the former IAS 17 standard, except IFRS 16).
Groupe Partouche acquired on 20 May 2020, mainly from Delahaye & Co, 95% of the shares of CLUB BERRI SAS.
Groupe Partouche now possesses a gaming club in Paris, thus completing its regional network.
« Club Berri » is located 11 rue de Berri, next to the Champs-Elysées, in the former premises of the Cercle Gaillon, a legendary gaming address in Paris. It is renowned for its setting and its quality clientele. Since mid-October 2019, "Club Berri" has been the 6 Parisian gaming club to be granted an operating license, among the 8 authorized to date. The club reopened on 24 June.
All of the Group's casinos reopened as follows: 2 June in France, 4 June in Tunisia, 6 June in Switzerland and 1 July in Belgium, thus respecting strict health protocols. This reopening concerned only slot machines and electronic forms of traditional games. The table games have been gradually re-operated and again available in France since 22 June.
The activities of slot machines and electronic forms of traditional games resumed with a very satisfactory trend.
In the context of the health crisis, a State Guaranteed Loan (PGE) was granted by the Group's partner banks on 5 June, 2020 for an amount of € 19.5 M, thereby strengthening its cash flow and making it possible to fully support the resumption of its business activities.
The Federal Council has extended the Meyrin casino concession in Switzerland, allowing the operations of the online casino gaming. The launching of the online site is scheduled for the end of summer 2020, under the brand Pasino.ch.
The Ostend City Hall recently awarded again the future concession (which will start in August 2021) to a competing operator, in contradiction with the decision of the Belgian Council of State to suspend the award decision, followed by the decision of the City Hall to cancel the allocation granted in June 2019 (decisions given following anomalies noted in this allocation). New appeals will therefore be brought.
- 3 quarter financial information : Wednesday 9 September, after Paris stock market close
- Turnover 4 quarter: Wednesday 9 December, after Paris stock market close
Groupe Partouche Phone : 01.47.64.33.45 – Fax : 01.47.64.19.20
Valérie Fort, Chief Financial Officer Info-finance@partouche.com
IFRS 16 "lease agreements" is applicable to the Group as of the fiscal year beginning 1st November, 2019. It replaces IAS 17 and the associated interpretations. This standard removes the distinction to be made between operating leases and financial leases. All rental contracts, with the exception of contracts not exceeding 12 months and contracts relating to assets of low value, must now be recognized in the tenant's balance sheet by the recognition of a right to use the asset rented, in return for a debt representing the rents to be paid over the expected duration of the rental contract.
In its transition, the Group adopted the “simplified retrospective” method, which allows the recognition of a liability on the transition date equal to only discounted residual rents, in return for a user right adjusted by the amount of advance payments of rents or accrued liabilities.
(*) : The impacts as of 30th April, 2020 include the Pornic property leasing formerly restated in accordance with IAS 17.
Insignificant impact on the consolidated net income
Purchases and external expenses decreased by € 8.2 M (-10,7 %), impacted mainly by:
The employee expenses amounted to € 73.5 M, down € 14.8 M (-16.8%) due in particular to the effects of the health crisis and partial unemployment. The compensation received for partial unemployment accounts for € 8.3 M, to which are added the savings generated in employer contributions. In addition, the Macron premium was not renewed this year (impact + € 0.4 M) and the net impact induced by the abolition of the Competitiveness and Employment Tax Credit (CICE) amounted to - € 0.9 M.
Depreciation and impairment on fixed assets increased by 32.9% to - € 29.0 M, mainly impacted by the application of IFRS 16 (negative impact of € 6.8 M) over the half-year and the sustained investments made in recent years.
Other current operating income and expenses represent a net expense of € 4.0 M compared to € 2.4 M in the first half of 2019, which increased due to the approach of the expiration of the property development contract at La Grande Motte (impact of - € 0.7 M) and changes in provisions.
Non-current operating income was impacted mainly by the impairment of goodwill carried out at the casinos of Andernos (- € 0.6 M) and Val-André (- € 0.5 M), as well as on the SEGR Le Laurent restaurant (- € 1.6 M)
Given the above developments, operating profit amounted to -€ 2.4 M compared to +€ 21.4 M in 1HY 2019.
The financial result is a net expense of - € 0.8 M compared to - € 0.4 M in 1HY 2019, an expense doubled by the application of IFRS 16 (- € 0.6 M) while the drop in costs net financial expenses excluding IFRS 16 continues. These benefit from a slightly lower half-yearly average interest rate.
Income before tax is a loss of - € 3.3 M compared to a profit of € 21.0 M in HY 2019.
Tax expense (including CVAE) reaches - €0.6 M against -€ 4.2 M in 1HY 2019, mainly due to the decrease in tax payable after the cessation of business activities of the Group at mid-March.
The share in income from equity-accounted associates is a deficit of € 0.1 M and follows the acquisition, on 29 January, 2020, of a 15% minority stake in La Pensée Sauvage Lifestyle and three companies wholly owned (La Pensée Sauvage, SCI Pierre Blanche and SCI Plan B). Leader in its market, La Pensée Sauvage is involved in food detox cures.
Consolidated net income for the 1HY is a loss of € 3.9 M compared to a profit of € 16.6 M at 30 April 2019.
The impact of the application of IFRS 16 on the net consolidated income is insignificant (- € 0,1 M).
Total net assets at 30 April, 2020 increased sharply and represent € 786.3 M compared to € 720.0 M at 31 October, 2019, an increase of € 66.3 M, of which € 76.0 M are related to the reprocessing induced by the application of the IFRS 16 standard over the six-month period (including the Pornic property leasing, previously restated according to the old IAS 17 standard). The remarkable developments of the period are as follows:
On the liabilities side, equity including minority interests, decreased from € 391.9 M at 31 October, 2019 to € 384.1 M at 30 April 30, 2020. Financial debt increased by € 60.8 M. It should be noted that:
The Group's financial structure can be assessed using the following table (set up as provided by the terms of the syndicated loan contract, according to the old IAS 17 standard, excluding IFRS 16):
(**)
The "Gross Gaming Revenue" corresponds to the sum of the various operated games, after deduction of the payment of the winnings to the players. This amount is debited of the "levies" (i.e. tax to the State, the city halls, CSG, CRDS).
The «Gross Gaming Revenue» after deduction of the levies, becomes the "Net Gaming Revenue ", a component of the turnover.
“Current Operating Income” COI includes all the expenses and income directly related to the Group's activities to the extent that these elements are recurrent, usual in the operating cycle or that they result from specific events or decisions pertaining to the Group's activities.
Consolidated EBITDA is made up of the balance of income and expenses of the current operating income, excluding depreciation (allocations and reversals) and provisions (allocations and reversals) linked the Group' business activity included in the current operating income but excluded from Ebitda due to their non-recurring nature.
Warning : the accounts include the first application of the IFRS 16 norm, “lease agreements”, whose impacts can be found in the current press release annex and are detailed in the half-year consolidated accounts annex (note 2.1.2)
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