- Pollard Banknote’s (TSX:PBL) lottery and charitable gaming business is being severely impacted by the ongoing COVID-19 pandemic
- The company is expecting an overall reduction in revenue of up to 30 per cent for the year as a result of the virus
- A number of cost-saving measures have been put in place, including staff layoffs, cutbacks to expenses and capital projects, and salary reductions
- The company has a strong balance sheet, thanks in part to a significant backlog of orders that came prior to the outbreak of the virus
- Pollard Banknote (PBL) is currently down 8.71 per cent to C$14.77 per share, with a market cap of $378.64 million
Pollard Banknote’s (TSX:PBL) lottery and charitable gaming business is being adversely impacted by the ongoing COVID-19 pandemic
The company is primarily focused on the sale of instant tickets to government lotteries around the world, as well as the sale of charitable gaming products to charitable gaming organisations in North America.
Its lotteries sector accounts for roughly 78 per cent of its total revenue. While the vast majority of lotteries remain operational, Pollard Banknote has seen a recent reduction of 15 to 20 per cent in retail sales compared to this time last year.
The company’s production facilities also remain operational, with its supply chains relatively intact. However, with the reduced demand and the need to ensure a safe work environment, staff levels have been cut back along with production capacity.
As a result, Pollard Banknote is expecting its instant ticket revenue to drop by between 10 and 15 per cent.
On the other hand, the company’s charitable gaming sector contributes approximately 22 per cent of overall revenue. This includes the sale of pull-tab tickets, bingo paper and the operation of Diamond Game and Oasis branded e-gaming machines.
The sale of these products occurs primarily in social settings, such as bars, casinos and bingo centres. Most, if not all, jurisdictions have implemented shutdowns at these locations, resulting in an almost total elimination of revenue-generating activities.
With no indication as to when these establishments will re-open, staff levels on this side of the business have also been cut back.
Based on a comprehensive review of its operations, Pollard Banknote is expecting a total revenue loss for the year of between 25 and 30 per cent.
In order to survive until such time, the company has implemented a range of additional cost-cutting measures.
Discretionary expenses and capital expenditure projects have been postponed. Work-share programs have also been put in place, as well as salary reductions for senior and executive employees.
Pollard Banknote said that it did not take the decisions lightly and is working to take advantage of various programs to provide support for its workers.
Pollard Banknote (PBL) is currently down 8.71 per cent to C$14.77 per share at 3:25pm EST.
