(Credit: Photo courtesy of RESTERS)In recognition of the company’s most famous asset, Canadian online gambling operator Amaya announced rebranding to “The Stars Group Inc”, as well as relocation of HD to Toronto.
Chief executive Rafi Ashkenazi said the company is making the changes as it continues to grow and alter its gaming mix.
“As we undergo this transformation, we look to embrace the future of our business while also recognizing the incredible consumer goodwill and loyalty associated with our primary brand,” he said Friday during a conference call.
Another reason for this change was probably to put more distance between itself and and former chairman and CEO David Baazov, whose insider trading charges and other potentially criminal acts have resulted in bad press and caused the company no shortage of image problems over the past year.
Revenue Growth From Diversification
The formal announcement of this rebranding came after a strong Q1 that surpassed analyst estimates. The figures released showed a 10{c118e36310c7bc75bef8f724f80ee0a52cfaf44be22f7e80906142f4c81518da} year-on-year revenue increase to US$317.3m in Q1, with 69{c118e36310c7bc75bef8f724f80ee0a52cfaf44be22f7e80906142f4c81518da} of which was made by poker, compared to 75{c118e36310c7bc75bef8f724f80ee0a52cfaf44be22f7e80906142f4c81518da} made the previous year.
This strong Q1 performance even with a 6{c118e36310c7bc75bef8f724f80ee0a52cfaf44be22f7e80906142f4c81518da} fall from Poker is evidence that the company’s efforts to move away from its pure poker roots continue to pay off as majority of growth came from markets other than poker. The combination of online casino games and sports betting increased to 27{c118e36310c7bc75bef8f724f80ee0a52cfaf44be22f7e80906142f4c81518da} of total revenue compared to 21{c118e36310c7bc75bef8f724f80ee0a52cfaf44be22f7e80906142f4c81518da} of this time last year.
“We continued our momentum in the first quarter as we execute on our strategy and reinforce the foundation for sustainable and diversified revenue growth, including through the strengthening of our core management team and operations,” Amaya CEO Rafi Ashkenazi said on the conference call.
Adjusted earnings shot up 22{c118e36310c7bc75bef8f724f80ee0a52cfaf44be22f7e80906142f4c81518da} to $151m and net earnings rose 18.5{c118e36310c7bc75bef8f724f80ee0a52cfaf44be22f7e80906142f4c81518da} to $65.7m
Timeline For Move And New CFO
Company shareholders will be asked to approve both the move and corporate rebrand at a forthcoming annual general meeting this summer.
CEO Rafi Ashkenazi gave no indication as to when the move to Ontario will take place, but noted that it won’t happen until the company’s new chief financial officer is in place, who has yet to be named but apparently works out of T.O.
Current CFO Daniel Sebag, a close friend and associate of ousted Amaya CEO David Baazov, announced his indefinite retirement plans back in January. All parties involved likely realize that this is a good time for Sebag and the company to part ways, as a continual effort on rebuilding its image and distancing itself from the negative press surrounding former CEO David Baazov.
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