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Playtech gives back

RESULTS: Gambling software company Playtech (PTEC) is to reward shareholders after selling its 29 per cent stake in William Hill Online last year.
February 21, 2014

Gambling software company Playtech (PTEC) will round off a bumper year by returning £100m in special dividends to shareholders. The sale of a 29 per cent stake in William Hill Online to William Hill (WMH) for £424m - 3.5 times its original investment - boosted the group's cash reserves and reported profit numbers in 2013. Business founder Teddy Sagi, who still owns 49 per cent of the group, looks set to receive £76m, but other investors also celebrated, sending Playtech’s share price to an all time high of 828p on the morning of the results.

IC TIP: Buy at 806pp

The transformational year saw two agreements with high-street bookmaker Ladbrokes (LAD), which Playtech will provide with a full product suite until 2017. Other customers, including Paddy Power (ie: PLS) and Betfair (BET), moved their live casino and poker services onto the company’s online network during the year, and Playtech’s social gaming platform Wild Spin Casino also launched on Facebook. Strip out William Hill Online and cash profits rose 17 per cent to €159m (£131m).

The growth trend looks set to continue: trading in 2014 has started strongly, with daily average revenues up 15 per cent year-on-year. Numis Securities expects adjusted pre-tax profit of €175m this year, giving EPS of 58ȼ (from €169m and 56.3ȼ in 2013).

PLAYTECH (PTEC)
ORD PRICE:806pMARKET VALUE:£2.4bn
TOUCH:804-807p12-MONTH HIGH:828pLOW: 539p
DIVIDEND YIELD:2.4%*PE RATIO:6
NET ASSET VALUE:314ȼ**NET CASH:€527m

Year to 31 DecTurnover (€m)Pre-tax profit (€m)Earnings per share (ȼ)Dividend per share (ȼ)
2009115702918.3
2010142672719.0
2011207793216.5
2012318893023.2
201336749116723.2*
% change+16+452+457-

Ex-div: 26 Feb

Payment: 23 May

*Excludes special dividend of 41.3ȼ a share

£1=€1.21

**Includes intangible assets of €393m or 134ȼ a share