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Mixed news on investor returns for Playtech

The digital gaming software company said that 80 per cent of its revenue now comes from regulated markets
February 25, 2019

Playtech's (PTEC) focus on regulated markets continued to intensify over 2018. More than 80 per cent of its revenue is now derived from that source, with the top-line from the regulated business-to-business (B2B) gaming division up 12 per cent. 

IC TIP: Hold at 403p

Shareholders in the online gaming software specialist were reminded why the transition is accelerating, as performance was hampered during the first half of the year due to competitive pricing pressure in China and a marked decline in online revenues from Malaysia, both of which are unregulated. These markets are potentially lucrative but inherently risky – a point borne out by Malaysia's temporary ban on online gaming in late 2017.  

Part of the shift to regulated markets was achieved through acquisition. The marquee deal to acquire Italian gaming company Snaitech contributed to a 56 per cent increase in intangibles, but delivered an increase in adjusted cash profits of 14 per cent, partially offsetting continued weakness in Asia. 

Analysts Goodbody expect EPS of 60.7¢ during 2019, compared to 60.8¢ in 2018.

PLAYTECH (PTEC)   
ORD PRICE:403pMARKET VALUE:£ 1.28bn
TOUCH:402.5-403p12-MONTH HIGH:841pLOW: 357p
DIVIDEND YIELD:5.2%PE RATIO:12
NET ASSET VALUE:426¢*NET DEBT:14%
Year to 31 DecTurnover (€bn)Pre-tax profit (€m)Earnings per share (¢)Dividend per share (¢)
20140.4614448.426.4
20150.6314244.528.5
20160.7120061.432.7
20170.8126778.936.0
20181.2418339.324.1
% change+54-31-50-33
Ex-div:02 May   
Payment:31 May   
*Includes intangible assets of €1.64bn or 518¢ per share  £1=€1.15