Playtech begins trading on London's Main Market
Software supplier granted premium listing on London Stock Exchange " trading sees market cap exceed £1bn.
Playtech has begun trading on London’s main market this morning with early trading seeing its market cap exceed £1bn.
The stock opened at 333p, and at the time of writing has risen to 350p, with Playtech CEO Mor Weizer calling the move “an exciting day for Playtech”. Trading on the Alternative Investment Market (AIM) has been cancelled as a result of the switch.
“The company has experienced exceptional growth since the company’s foundation in 1999 and today marks a significant milestone in Playtech’s continued development,” he added.
Playtech originally gave notice of the cancellation of trading on the AIM last month, publishing a prospectus on 28 June. A statement released at the time explained: “The company believes that the Official List is the most appropriate platform for the continued growth of the group by increasing Playtech’s profile, assisting in the liquidity of the company’s shares and providing a greater range of potential investors for the company.”
The prospectus, published on Friday, while “approximately half” of the group’s revenues come from regulated European markets and it is understood to have applied for a Nevada egaming licence, almost a fifth of its gross income is derived from three grey to black markets, which it described as jurisdictions “where it may be unlawful or may become unlawful for individuals to engage in online gambling.”
“In these circumstances, any attempt in the future by regulatory authorities to take enforcement action against such individuals could significantly affect demand for the products and services supplied to Licensees by the Group and have a detrimental effect on its financial performance and reputation,” the prospectus explained.
The markets in question are China, Malaysia and Germany, with 3.6% of gross income coming from the Chinese market, where there is “Some ambiguity as to the laws in the territory [which] have dubious extraterritorial effect, [though] the enforcement agencies in the territory are unpredictable.”
Malaysia provides 8.4% of gross income, which eGaming Review understands is predominantly through gaming machine operations, while Germany accounts for 7.7%. However, the signing of a joint venture with Merkur Interactive GmbH, the online subsidiary of leading land-based German gaming operator Gauselmann Group, suggests that the supplier could potentially offset the loss of revenues from private operators that could be forced to withdraw from the market following the enforcement of the controversial state treaty signed by 14 of the country’s 15 Länder. Gauselmann Group is likely to apply for one of the proposed 20 operating licences.
The company’s first application for a premium listing was turned down in March last year, with the UK Listing Authority deeming Playtech to have failed to meet the criteria of being responsible for 75% of its income and profit, with its online joint venture with William Hill accounting for more than 25% of its earnings.
The original announcement came a day after the supplier completed a series of related party transactions including a software licensing agreement that saw the group gain use of founder and majority shareholder Teddy Sagi’s social gaming assets, including B2C platforms and products provided by CTXM, Viaden Gaming and Rummy Royal, with Sagi’s Skywind Holdings gaining use of Playtech’s real-money gaming software in return.
The deal also saw Playtech subsidiary Gaming Technology Solutions (GTS) rent office space and nine furnished apartments in London’s Camden Town from Anise Developments Limited and Anise Residential Limited “ companies in which Sagi is known to have a significant and beneficial interest. Sagi has also been appointed a special advisor on a nominal annual salary of 1, though “the company is not obliged to involve Mr Sagi in any matter.”
Following a minor share increase Sagi now owns more than 49% of the company.