What has driven Playtech's Q3 upturn?

What has driven Playtech's Q3 upturn?

Friday, October 30, 2015 Totally Gaming
Weizer praises impressive quarterly results

Playtech chief executive Mor Weizer has outlined the company’s focus on regulated markets after the gaming software and services provider posted an impressive third-quarter trading update to propel its share price to a rise of more than 10 per cent on the London Stock Exchange yesterday (Thursday).

Growth in Playtech’s gambling software and financial trading operations helped to drive overall revenue to €170.9m ($187m), a huge 47-per-cent increase, well above analysts’ expectations.

“Three quarters of our growth in the third quarter came from regulated markets which now account for over half of all group revenues,” Weizer said.

“Our gaming division continues to enjoy double-digit underlying growth with our strong pipeline of opportunities giving us confidence in maintaining our momentum.”

Gaming revenue improved by 23 per cent to €143.4m, while the company’s poker division was the only one to drop, falling by 25 per cent to €2.5m.

Playtech’s revenues have already reached the €456.9m generated in the whole of 2014, and the latest figures took the company to the top of the FTSE 250 index of top-performing companies yesterday, with the share price soaring by 80.5p to 873p.

The latest uplift has come at the perfect time for Playtech after the company’s share price hit its lowest point in six months on October 5.

The share price dipped below 800p after the company announced a regulatory stumbling block in its acquisition of online trading platform Ava Trade.

The deal for Dublin-based Ava Trade has been opposed by the Central Bank of Ireland. The opposition – which came as a shock for the company and its analysts - came despite Playtech having been granted approval from the Financial Services Commission in the British Virgin Islands.

Playtech’s TradeFX subsidiary struck a deal to acquire Ava Trade for approximately $105m (€93m) in July, and an update in September claimed that the takeover would be completed by the end of the year. 

Playtech also expects its acquisition of Israeli spread betting company Plus500 to be completed in the coming months.

“Our financials division had a strong quarter driven by customer acquisition, with a focus on our direct marketing channels, and we hope to complement our growth with the completion of the acquisitions of Plus500 and Ava Trade,” Weizer added.

“Given the strength of our business and the momentum that we are enjoying, we have confidence for the remainder of 2015 and beyond.”

Broker Peel Hunt said: “If the AvaTrade and Plus500 acquisitions seemed a taxing affair, these results showed no signs of fatigue or distraction.”

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