Numis sings 888 and Playtech praises after Tel Aviv trip

Numis sings 888 and Playtech praises after Tel Aviv trip

Thursday, November 10, 2016 Posted by Andy McCarron
Playtech has high hopes for its BGT acquisition

London-based leisure analysts went on a road trip to Tel Aviv this week to visit both Playtech and 888 and the team at Numis came back unsurprisingly convinced of the “attractions of both companies.”

The Numis team, led by Richard Stuber, said that IT excellence and top-class CRM were the prevailing themes, and the attraction of first, 888 with its best-in-class technology and second, Playtech’s financial firepower and high barriers to entry made the pair attractive propositions.

Looking at each company in turn, the Numis team said 888 guided on lower marketing spend next year but at the same time it said that in the medium-term, the CRM systems meant the company would be able to outbid competitors on a cost-per-acquisition (CPA) basis while also maintaining lifetime values.

The team pointed out that of the 270 technology projects delivered in 2015, nearly half involved optimising current processes and the company was involved in maximising returns from current efforts rather than reinventing the wheel.

In terms of strategy, 888 also divulged that it would concentrate on new markets where it believed it would achieve at least 10% market share, and that if this were not achieved it would reconsider its decision. It also said it was now considering multiple brands, and that work on the 777 brand had already attracted a younger demographic of more recreational players.

Moving on to Playtech, Numis pointed out that the company had an “unmatchable R&D budget and un-replicable technology architecture” and added that though there was competition in all products, no one supplier providing a holistic solution. Further, the potential for structure agreements whereby basic B2B services could be bolted on, including marketing, multi-channel and operating activities could add huge value.

In sports, Numis noted that Playtech has high hopes for its BGT acquisition where it hopes it will be able to integrate with legacy sports platforms to create a fully-integrated offering. “There will be a big push on SSBTs in the UK and international opportunities,” the analysts added.

Totally Gaming says: Numis was clearly impressed with what it saw in Israel. Just look at its conclusion: “Whilst we remain bullish on the organic prospects for both we think there are opportunities to increase shareholder value through selective M&A opportunities; in 888's case to accelerate growth (operating leverage) and in Playtech's case, a shareholder-friendly acquisition might drive a rerating.”


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