Playtech's (PTEC) reported results were heavily distorted by the €341m (£291m) gain the company made from selling its share of William Hill Online back to the eponymous high street bookmaker. In fact, the adjusted results had a transitional feel and showed largely flat pre-tax profits and EPS of €86m and 29.1¢, respectively, indicating that the next step for management is to decide how to use its immense war chest to restore vigour to its earnings.
This might not include an immediate large-scale cash return to investors as management used the first part of the William Hill windfall to fund the post-period acquisition of PokerStrategy for €38.3m. PokerStrategy is a so-called affiliates website that directs potential players to specific gaming sites and the deal should boost earnings immediately as PokerStrategy reported profits last year of €19.5m (£16.7m). It will also help Playtech to improve its poker offering as wider industry problems caused poker revenues to slide by 17 per cent to €8m for the half.
The best-performing division was Playtech's core casino games, where revenues increased by 26 per cent to €90.2m. Chief executive Mor Weizer said Playtech would concentrate on adding bolt-on acquisitions along with more "strategic alternatives" but added that all options were still on the table.
Broker Peel Hunt forecasts adjusted pre-tax profits for this year of €155m, giving EPS of 51.6¢, compared with €170m and EPS of 57.1¢ in 2012.
PLAYTECH (PTEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 663p | MARKET VALUE: | £1.94bn | |
| TOUCH: | 662-664p | 12-MONTH HIGH: | 717p | LOW: 365p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 299¢* | NET CASH: | €576m | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 154 | 27 | 9 | 7.80 |
| 2013 | 177 | 415 | 142 | 7.80 |
| % change | +15 | +1437 | +1478 | - |
Ex-div: 25 Sep Payment: 28 Oct *Includes intangible assets of €360m, or 123¢ a share £1=€1.17 | ||||
