Playtech starts 2011 strongly
Software business sees activity in fourth quarter and start of 2011 surge ahead - acquires IGS, casino software management systems business
Playtech has started the year as it means to go on with daily activity in the first three weeks of January more than 11% ahead of 2010, it said in a fourth quarter trading update to the stock exchange this morning.
The firm also said it had acquired Intelligent Gaming Solutions (IGS), a provider of software based casino management systems to land-based casinos, for an initial £2.5m, rising to £3m. IGS has recently installed systems in nine casinos, including the Aspers Group in the UK and the Regency casinos in Greece.
Commenting on the acquisition Mor Weizer, chief executive of Playtech, said: “The convergence of land-based and online segments is becoming a key theme in the industry. We see this deal as increasing Playtech’s unique competitive advantage and cross-platform capabilities.
“The IGS management team has a long track record in the development of such systems and we are delighted to welcome them into the Playtech family. They will enhance our capabilities in a product area which will further our attractiveness to land-based operators”.
The software developer and licensor said total revenues for the 12 months to 31 December 2010 were up 24% to 142.3m (£122.4m) compared to 114.8m in 2009 and that it was confident it would meet market expectations when it unveils its final results on 10 March later this year.
Total revenues for the fourth quarter ending 31 December 2010 were up 21% to 36.9m compared to 30.4m last year and 13% higher than the 32.5m achieved in the third quarter of 2010, while quarter-on-quarter revenue performance for casino revenues rose 20% to 25.9m, poker revenues were up 3% to 5.9m, while bingo revenues were up 9% to 3.3m.
The company said its share of profit from its partnership with William Hill Online (WHO) was up 37% to 30.8m for the full year compared to 22.5m in 2009, including 7m in the fourth quarter of 2010.
Nick Batram, analyst at Peel Hunt, put a firm ‘buy’ recommendation on the stock in a note this morning, saying: “As expected, this was a solid update and at the current time Playtech looks the most attractive entry point to play the online gaming sector. There are numerous catalysts that could drive a re-rating in 2011, and we reiterate our Buy recommendation.”
In the last quarter Playtech signed a deal with Finnish provider RAY for its poker and casino that launched on 29 November registering 60,000 players by 21 December, according to the company; acquired two new licensees including Unibet (bingo) and Codere (Italian bingo); launched additional product launches for existing licensees including bet365 (games tab content) and Titan (French poker); and Tain (casino), which is due shortly, Playtech said in a statement. It added that discussions on additional products with various existing licensees were “underway”. New license agreements announced for regulated markets included Buongiorno (Italian casino) and Nordic Bet (bingo).