Diversification is key to success, says Playtech boss

Diversification is key to success, says Playtech boss

Thursday, August 27, 2015
Alan Jackson backed the company's focus on financials growth in 2015

Playtech chairman Alan Jackson said that the firm’s ‘financials’ division helped trigger a “strong” performance as both the gaming services company’s and its soon-to-be-acquired Plus500 reported big revenue increases in H1 2015.

Playtech’s revenue was up 33 per cent compared to a year ago at €286m ($324.2m), with earnings before interest, tax, deprecation and amortisation (EBITDA) rising by 16 per cent to €112.9m and adjusted net profit growing 19 per cent to €115m.

Shareholders of both Playtech and trading services operator Plus500 have now agreed to the former’s €630.5m takeover, with finalisation to take place by the end of September, and Jackson emphasised the growing importance of a segment of the balance sheet that also includes TradeFX - now called Markets Limited - which was acquired earlier this year, and will soon also feature Ava Trade.

“We have made significant progress against all aspects of our strategy during the first half of the year,” Jackson said. “We have completed a series of strategic acquisitions to create and enhance our new ‘financials’ division, a high-growth and regulated industry, and our continued operational delivery across all business segments has translated into a strong financial performance across all key metrics, with revenues up by a third in the half year.”

Jackson’s upbeat message came as the markets reacted negatively, with Playtech’s share price down around two per cent today (Thursday), which TotallyGaming.com understands to be related to fears that a merger between Paddy Power and Betfair could reduce their reliance on third-party software provision. 

However, such developments make Playtech’s focus on diversification during 2015 seem all the wiser, with Plus500’s revenue growth coming despite regulatory problems earlier in the year.

"Our ‘gaming’ business continues to go from strength to strength with our strategy of focussing on regulated markets driving growth, Jackson said. "Our pipeline remains strong, with significant opportunities across all geographies, as customers seek to benefit from our market-leading omni-channel offering and our best-of-breed products in each and every product category.

“Taken together, the progress we have made gives me great confidence that the sustained momentum in our business will result in further growth in 2015 and beyond.”

Plus500 posted revenue of $127m in H1, which was up 20 per cent year-on-year, however EBITDA fell 23 per cent to $55.5m and net profit slumped 25 per cent to $40.6m.

Gal Haber, chief executive of Plus500, said: “Despite the disappointing regulatory setback in the second quarter, the group was profitable in every month in the first half and our business model continued to be cash generative. Our easy-to-use and robust platform continued to attract new customers and encourage active customers.

“Whilst the group has been the subject of a high level of regulatory scrutiny, we have made significant progress in enhancing our compliance and onboarding processes in line with the recommendations of our regulatory advisors.”

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