Gambling software company Playtech (PTEC) said annual profits should exceed consensus forecasts following a strong first half, during which prolific mobile gaming and new contracts in Mexico, Britain and Italy boosted top-line growth. Reported pre-tax profits took a nosedive, but strip out last year’s gain on the sale of a 29 per cent stake in William Hill Online and adjusted profits rose 45 per cent to €97m (£77m).
Playtech’s mobile revenues grew 56 per cent during the period, but still represent just 10 per cent of the total. Chief executive Mor Weizer said that proportion should grow as Playtech’s clients promote mobile gaming to their players.
A strong performance in unregulated Asian markets also drove first-half growth, with revenues in the region soaring by 72 per cent to account for over a third of the total. Growth in Europe proved more sluggish, with an 8 per cent increase in revenue, while sales across the rest of the world dipped 9 per cent.
Casino remains Playtech's key product, contributing over half of sales. Revenues jumped 29 per cent, helped by new deals with Ladbrokes (LAD), Gala Coral, Paddy Power (ie: PLS) and strong trading in Asia.
Following upgrades, brokerage Peel Hunt expects pre-tax profits of €196m for 2014, giving EPS of 60ȼ.
| PLAYTECH (PTEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 698p | MARKET VALUE: | £2.05bn | |
| TOUCH: | 697-699p | 12-MONTH HIGH: | 818p | LOW: 571p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 266ȼ* | NET CASH: | €366m | |
| Half-year to 30 June | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
|---|---|---|---|---|
| 2013 | 177 | 415 | 142 | 7.8 |
| 2014 | 214 | 77 | 26 | 8.9 |
| % change | +21 | -81 | -82 | +14 |
Ex-div: 24 Sep Payment: 27 Oct *Includes intangible assets of €385m, or 131ȼ a share £1 = €1.26 | ||||
