Britain's Playtech warns on revenue; shares plunge

Revenue from Asia could be about €70 million lower than prior expectations

Investec analysts said they estimated a more than 25 per cent drop in Playtech’s first-half average daily revenue in Asia. Photograph: iStock

Investec analysts said they estimated a more than 25 per cent drop in Playtech’s first-half average daily revenue in Asia. Photograph: iStock

 

Playtech’s shares slumped nearly 27 per cent on Monday after the British gambling technology company warned that its full-year revenue would be hurt by a highly competitive market in Asia.

Shares of the company fell to £5.52 (€6.23), lowest in more than four years, on the London Stock Exchange.

Playtech said pricing environment in Asia in the first half ended June 30th had been particularly aggressive due to newer players.

“Given the recent decline and in the absence of any change in market dynamics, we expect a significant impact on revenue throughout the rest of the year,” the company said.

Investec analysts said they estimated a more than 25 per cent drop in Playtech’s first-half average daily revenue in Asia. Playtech did not provide a breakup of its Asian business.

The Isle of Man-based company warned if the current run rate in Asia continued for the rest of 2018, revenue from Asia would be about €70 million lower than its prior expectations.

“Clearly the recent trading performance in Asia is disappointing,” Playtech chief executive Mor Weizer said.

However, the company said the overall performance for the first six months was broadly in line with its expectations.

Playtech, which makes software that powers thousands of fixed-odds betting terminals across the UK, posted a 7 per cent rise in year-to-date average daily revenue in its B2B gaming business, excluding Asia, on constant currencies.

The company forecast adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to be between €320 million and €360 million for the current year. Playtech reported an adjusted EBITDA of €322.1 million in 2017.

In a move to reduce its exposure to regulated markets, Playtech said in April it would buy a 70.6 per cent stake in Italian betting and gaming firm Snaitech for €291 million.

The Snaitech deal came after Playtech issued a profit warning in November, saying earnings would be impacted by a crackdown on gambling syndicates in Malaysia, one of its largest Asian markets. – Reuters