Playtech still looking at financials acquisitions

Playtech still looking at financials acquisitions

Wednesday, May 18, 2016 Totally Gaming
Alan Jackson said Playtech may consider returning cash to shareholders

Playtech chairman Alan Jackson has said the operator is still interested in adding new acquisitions to its financials division, despite the disappointment of being prevented from buying Plus500 and AvaTrade during 2015.

In a trading update released ahead of today’s (Wednesday) AGM, the software and services company said growth in daily average revenues in its gaming division was in line with the figures for the first 53 days of the year which it reported in February. At that time Playtech said that average daily revenue was up 12 per cent year-on-year due to growth across the business including improved commercial terms and new customers in Asia.

The company also said that its financials division made a “strong start to the year” due to market volatility in January and February and changes to the business model actioned during Q4 2015. 

Jackson said the company was in “active discussions” over acquisitions in both the gaming and financial sector. While Playtech paid around €450m ($507m) for TradeFX last year, it withdrew its offer to buy Plus500 in November after interactions with the Financial Conduct Authority (FCA) suggested the €627m deal would not be approved. It also ended its pursuit of AvaTrade after the Central Bank of Ireland (CBI) opposed a potential deal.

“Our pipeline of M&A opportunities remains healthy with active discussions in the gaming division as well as discussions for selective bolt-on acquisitions in the financials division,” Jackson said. “As we stated at the time of our 2015 full year results, should suitable acquisitions not be available, consideration will be given to returning cash to shareholders as we look to maintain an efficient capital structure.

“We remain confident of continued success and strong growth in 2016 and beyond."

TotallyGaming.com says: “After announcing that it held a cash balance of €857.9m at the end of 2015, Playtech has the means to go on a shopping spree during 2016. However, following the negative impact of its financial division failures towards the end of 2015, the company looks sure to proceed with caution.”

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