Playtech tumbles after profit warning

Playtech tumbled on Monday after the gambling software company issued a profit warning following a disappointing performance in Asia.

The company said the current run rate in Asia is "materially" below the average in the second half of last year and what was expected for the second half of 2018 at the start of the year. If it remains unchanged for the rest of the year, including no material improvement in Malaysia, the group expects revenue from Asia to be around €70m lower than original expectations.

"Given that the downturn in Asia has been relatively sudden and taking into account Playtech's centralised cost base, the vast majority of this revenue loss will drop through to adjusted EBITDA," it said.

The company, which warned on profits last November, said it now expects adjusted earnings before interest, taxes, depreciation and amortisation for 2018 of between €320m and €360m, versus €322m a year earlier, excluding the €42m one-off gain relating to the sale of shares in Ladbrokes and GVC.

Chief executive officer Mor Weizer said: "Clearly the recent trading performance in Asia is disappointing. We have taken steps to further support our partners in the region and we will continue to work to preserve our position in the face of an increasingly competitive environment.

"In line with our stated strategy, progress in fast-growing, regulated and soon to-be-regulated markets continues apace. Momentum in key regulated markets continued in the first part of 2018 with new agreements with Gala Leisure in the UK, SAS in Portugal and Totalizator, the Polish national lottery. Additionally, regulatory developments in the US represent a significant opportunity for the group.

"The organic growth reported in the non-Asian B2B gaming business combined with the recent acquisition of Snaitech in Italy provides management with confidence that this strategy will materially improve the quality and diversification of Playtech's performance in 2018 and beyond."

At 0905 BST, the shares were down 25% to 65.20p.