Playtech H1 revenues up despite France exit
Initial revenue growth in Q3 shows early impact of PTTS acquisition " supplier hints at further acquisitions and JVs in new and existing markets by the end of the year.
Playtech has recorded an 18% increase in revenues for the six months ended 30 June when stripping out the 7m impact of its withdrawal from the French offshore market, the software supplier revealed this morning in first half figures.
Revenues were also up on an absolute basis, rising 5% from 72.9m to 76.3m, while net profit rose 2% to 37.9m.
The third quarter of 2010 saw the AIM-listed company experience a year-on-year increase in daily revenues for the first 54 days of Q3 of more than 23%, a figure largely attributed to the launch of cash poker and casino in Italy. Playtech was among the first wave of licensees to launch in the EU country, along with Ongame and 888.
In a statement to the stock exchange this morning the company noted “exceptional joint venture and near term acquisition opportunities currently under discussion in certain key markets”, however despite rumours linking the company with a number of possible purchases, including Ash Gaming, CEO Mor Weizer (pictured) refused to be drawn on exactly which new and existing markets and companies Playtech could look to enter and buy.
“We believe there is a window of opportunity given certain regulation in certain markets as well as the financial market conditions. This opened up in the last few months and we would like to use the opportunity to take advantage of market conditions and establish ourselves in regulated markets and extended our reach to additional operators beyond our reach today,” he told eGaming Review this morning.
“This window will not stay forever so we decided to re-invest into the business in order to grow the company in the medium to long-term. I can’t refer to specific markets, we refer to markets that are either opened up or seriously considering opening up in the future. We now believe that with the combination of Playtech and PTTS is our best position to establish our presence in those markets within JVs and acquisitions.
I can’t comment on specific acquisitions, but definitely mobile is an area which we would like to grow and establish a presence and we’ve done that with Mobenga, but there are other areas where we would like to position ourselves,” he added.
Asked to identify any areas Playtech could improve he added: “Establishing ourselves in different regulated markets in order to create new revenue streams and extending our reach beyond just software through PTTS is what we keep our eyes on and, I wouldn’t say that it concerns me but it’s definitely something that we put a lot of focus in and we dedicate a large portion of our time to it.”
Recent weeks have also seen Playtech begin to see the benefits of its acquisition of PT Turnkey Services “ a deal completed in July “ while the weeks since the end of H1 have also featured the notable purchase of mobile specialist Mobenga and the agreement of a 10-year supply deal with Gala Coral.
Weizer said Gala Coral would spend the rest of this year preparing to launch a number of Playtech’s products by early 2012. “We are the technology partner on the gaming side and will replace their existing product and suppliers with Playtech. It reiterates that Playtech is the best choice for well-established operators. The idea is to successfully launch in the first half of next year and ensure they have everything in place from a technology point of view to ensure they succeed and grow their business.”
Several analysts maintained their firms’ ‘buy’ recommendations after a widespread consensus that the H1 figures rose above expected levels, although the decision to defer an interim dividend decision in the light of the aforementioned acquisition opportunities was described by Simon French of Panmure Gordon as “disappointing.”
Nick Batram of Peel Hunt agreed that the deferral was “a surprise”, but noted that “Playtech… has an impressive acquisition track record”.
After its SciPlay joint venture was selected by the California Online Poker Association (COPA) for its online poker services, Playtech has also acknowledged the impact of the delay to California intrastate regulation, citing “the complexity and uncertainty of moves towards regulation in Europe and the US”.
However, it did note that “As more jurisdictions move towards regulation, Playtech is able to offer new and existing operators a market leading suite of products and services, helping them to navigate the complexities of changing regulatory environments.”