These Playtech (PTEC) numbers were good, but a flat share price suggests a market hardly falling over itself. That may reflect ongoing nerves regarding the FCA's proposed protections for retail customers buying contract for difference (CFD) products. Given Playtech's evolving business model, tighter regulation could end up affecting its embryonic financials division (9 per cent of revenue).
But chief executive Mor Weizer says regulation would be an "opportunity" for Playtech, likening it to the introduction of the point-of-consumption tax to online gaming a couple of years ago. He says a number of internal changes are already under way to comply with new measures, but better legislation could create a higher barrier to entry for small online brokers looking to take market share. Overall, it could improve the quality of earnings - something already evident in Playtech's gaming division, where revenue from regulated markets edged up to 42 per cent from 41 per cent in 2015, led by its live casino offering.
Translation of figures into euros hurt somewhat: constant-currency revenue rose by a fifth last year. But cash profit margins widened, and adjusted cash profit improved by a third on the same basis.
Analysts at Canaccord Genuity expect EPS of 83.6¢ for 2017, based on cash profit of €359m (£303.6m), compared with 72.2¢ in 2016.
| PLAYTECH (PTEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 886p | MARKET VALUE: | £2.81bn | |
| TOUCH: | 886-887p | 12-MONTH HIGH: | 938p | LOW: 711p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 340¢* | NET CASH: | €345m | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 318 | 89.0 | 30.0 | 23.2 |
| 2013 | 367 | 491 | 167 | 23.2 |
| 2014 | 457 | 144 | 48.4 | 26.4 |
| 2015 | 630 | 142 | 44.5 | 28.5 |
| 2016 | 709 | 200 | 61.4 | 32.7 |
| % change | +12 | +41 | +38 | +15 |
Ex-div: 4 May Payment: 2 Jun *Includes intangible assets of €1.01bn, or 320¢ a share £1=€1.18 | ||||
