A solid half for Playtech

Online gambling software developer Playtech plc has released its interim results for the six months ending 30 June 2011, reporting continued momentum and a positive future sustained by development and major licensee achievements.
Financial highlights included:
* Gross income up 19 percent to Euro 95.0 million and 8 percent on an absolute basis (H1-2010: Euro 87.9 million)
* Total revenues up by 18 percent to Euro 76.3 million and 5 percent on an absolute basis (H1-2010: Euro 72.9  million)
* EBITDA up by 4 percent to Euro 56.1 million (H1-2010: Euro 54.2 million), reflecting a margin of 59 percent on gross income (H1-2010: 62 percent) despite loss of revenues from the withdrawal from the French market
* Net profit after tax up 2 percent to Euro 37.9 million (H1-2010: Euro 37.0 million)
* Continued high cash conversion supports robust balance sheet with Euro 64.3 million in cash and cash equivalents as at 30 June 2011
* Dividend deferred: The Board has determined that due to exceptional joint venture and near term acquisition opportunities currently under discussion in certain key markets, it will defer a decision over the interim dividend until the final results for 2011, in order to retain maximum flexibility. Significant joint venture opportunities exist to create long term shareholder value in other regulated markets
* The Board remains confident in meeting its expectations for the year
H1-2011 operational highlights included:
* Completion of the acquisition of PT Turnkey Services on 1 July 2011, enabling Playtech to deliver a fully integrated software and services offering to new and existing licensees; a significant extension of group capabilities
* Agreement to supply Gala Coral announced in July 2011 with a full range of gaming products and technology platform, providing full player management, player retention and back-office tools across its online gaming products
* New regulation of cash poker and casino table games in Italy: new licensee Buongiorno launched casino; William Hill Online joined the iPoker.it network; and together with existing licensees SNAI, SISAL, Eurobet, Cogetech, and BetClic, launched cash poker in the first days of the new market
* Agreement to supply the California Online Poker Association (“COPA”) with poker software ahead of any regulation of online poker in California. Sciplay, the joint venture with Scientific Games, will supply ancillary services to COPA
* Playtech’s wholly owned subsidiary, Videobet, and The Global Draw, a Scientific Games subsidiary, completed roll out of its software platform to over 20,000 Global Draw gaming machines in the UK including Gala Coral, Ladbrokes, William Hill and Tote betting shops
* Acquisition of Intelligent Gaming Systems in January, extending Playtech’s land-based reach for multi-channel integration
* Agreement to acquire Mobenga AB in July 2011. The mobile sports betting enabler will add key capability in a channel viewed as being a major contributor to new player acquisition and future growth. Completion is expected at the end of August
* William Hill Online continues to perform strongly with growth across its product portfolio. It also launched a mobile betting application with Mobenga just after the period end.
* Casino Gran Madrid received the first Spanish online operator licence, authorising its activities in the Madrid region and is now operational with Playtech
Playtech’s current trading started the second half of 2011 with a strong performance despite a traditionally slow Q3, showing daily average software revenues for the first 54 days up more than 23 percent in comparison to the comparable quarter in 2010, and over 2 percent versus the previous quarter.
This has been materially influenced by both the introduction of casino games and poker cash table games in Italy, and the transition of players to Playtech’s poker licensees due to the licence suspension of the second largest poker operato, Full Tilt Poker, by the Alderney Gaming Control Commission.
In addition, service revenues introduced for the first time through the acquisition of PTTS, are trading strongly in line with expectations.
Roger Withers, non-executive chairman of the company, said:
“Playtech has continued to make strong progress in an uncertain market, winning new licensees, exploiting opportunities in existing and soon to be regulated markets and identifying valuable acquisitions which will add to the Group’s offering.
“Despite the complexity and uncertainty of moves towards regulation in Europe and the US, Playtech has positioned itself, both independently and through its joint ventures, to benefit from the continued growth of the online gaming market. As more jurisdictions move towards regulation, Playtech is able to offer new and existing operators a market leading suite of products and services, helping them to navigate the complexities of changing regulatory environments.
“With a strong pipeline of new opportunities and the continued development of our offering, we look to the second half and beyond with optimism and are excited about the future as Playtech is increasingly consolidating its position as the supplier of choice for technology and services for the worldwide online gaming industry.”

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