Playtech revenue rises almost a third in first half

Gambling software development company Playtech saw revenues jump 30% at constant currencies in its first half to €421.6m, it announced on Thursday, with adjusted EBITDA rising 24% by the same measure to €170.9m.

The FTSE 250 firm’s adjusted diluted earnings per share were 21% higher at constant exchange rates for the six months to 31 June at 36.2 euro cents, with the board confirming a total dividend ot 12.1 cents - an increase of 10%.

Its adjusted net profit was €125.5m, an improvement of 20% at constant currencies, while reported net profit was ahead 21% at constant exchange rates to €89.6m.

“The proven strength of the Playtech model was once again demonstrated with a strong H1 performance driven by both underlying growth and recent acquisitions,” said chairman Alan Jackson.

“As always, Playtech's performance has been converted into strong cash generation enabling a 10% increase in the interim dividend, in line with the progressive dividend policy.”

On the operational front, Playtech said it saw strong revenue performance in its gaming division, with 28% growth at constant currency led by its flagship casino offering.

It reported double-digit underlying growth, with a particularly strong performance in Asia, and said its recent acquisitions had been integrated and were performing in line with expectations.

Regulated gaming revenues accounted for 44%, the board said, compared to 39% in the first half of last year, while online software revenues from mobile were 38%, rising from 29%.

Significant contracts were renewed during the six months, including with Paddy Power Betfair, Skybet and Betfred.

A landmark sports contract was signed with Greek operator OPAP, and the board added that an “industry leading” live offering was launched with the world's largest ‘live casino’ in Riga, Latvia.

Playtech said the Sun Bingo contract remained “challenging”, while it maintained a pipeline of new licensees focussed on “large, high-quality omni-channel” opportunities.

“The first half of the year saw Playtech's Gaming Division deliver strong growth with double-digit underlying growth and recent acquisitions integrated and performing in line with expectations,” Alan Jackson said.

“Playtech has also continued to execute on its industry leading omni-channel solution by deepening its offering in key verticals with the integration of Playtech BGT Sports creating a fully integrated best-in-class sports technology solution and the launch of the world's largest Live Casino studio in Latvia, revolutionising the offering in a growing and dynamic channel.”

In its financials division, Playtech said the solid momentum from 2016 had continued into the first half with “strong performance” and improved key performance indicators.

The company’s business-to-business offering was further enhanced with the acquisition of Alpha Capital Markets assets since the period ended.

It also launched the TradeTech Group brand, which the board said was intended to reflect the full B2B and B2C capabilities of the financials division.

“As with the Gaming Division, momentum in the Financials Division continued with improvements across all KPIs,” added Alan Jackson.

“The announced acquisition of assets from Alpha brings an important new B2B revenue stream and the creation of TradeTech Group as our operating and corporate brand for the business is an important milestone and better reflects the broadening of the division's offering towards a full turnkey B2B financial trading solution.”

Looking ahead, Playtech’s management said it was confident of a strong performance in 2017 driven by both organic growth and the acquisitions made in 2016 and 2017, albeit with normalised levels of growth in the second half from Asia following unusually high levels of activity in the first half

Average daily revenue in the gaming division for the first 53 days of the third quarter - traditionally the slowest part of the year - was up 1% on the third quarter of or 6% at constant currency, and down 9% on an “unusually strong” second quarter of 2017, or down 6% at constant currency.

Excluding acquisitions, average daily revenue in the gaming division for the first 53 days of the third quarter was down by 1% on the prior year, increasing 3% at constant currency.

Playtech said the financials division was trading in line with expectations

“Taken all together, this proven platform for growth across the business has again delivered a strong performance and management remain confident of further strategic progress in the second half of 2017,” concluded Alan Jackson.