Playtech off target in increasingly competitive Asian market

Playtech off target in increasingly competitive Asian market

Tuesday, July 3, 2018 Posted by Luke Massey
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The software provider has issued a second profit warning in a year

Playtech Plc has issued its second profit warning within a year, alerting the markets of further Asian woes for its services and operations.

Issuing a trading update, Playtech details that an ‘aggressive price environment’ driven by a number of new market incumbents has led to a slowdown in its Asian market revenues.

The FTSE250 gambling technology group said that it has seen no ‘material change’ with regards to its Malaysian gambling services which continue to be impacted by severe government restrictions.

Despite the continued growth of its European enterprise, Playtech has admitted that this Asian impact is likely to negatively impact the firm’s 2018 corporate run rate.

The company expects Asian market revenues to be €70 million below its original 2018 target, which has led Playtech to revise its full-year 2018 adjusted earnings to a €320-360 million range.

However, these full-year 2018 projections will not include the €220 million of profits made from its sale in GVC Holdings undertaken during H1 2018.

Mor Weizer, Group CEO of Playtech Plc, 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.”

Totally Gaming says: Despite the downturn, and its obvious disappointment, Weizer highlighted the opportunities that still exist within regulated European jurisdictions for Playtech, who continue to execute a tier1 operator strategy, which will include significant post-PASPA US market moves.

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