Online gaming technology developer Playtech Cyprus Ltd. (AIM:PTEC) today published its key performance indicators for the second quarter of 2009. For the first time, the company's quarterly revenue was less than achieved in the preceding quarter, and the company lowered its full-year forecasts.
Playtech's share dropped 22% by midday on London’s Alternative Investment Market (AIM) to ₤3.53, giving a market cap of ₤844 million.
Playtech attributed the decline to " a slower than anticipated start" by its joint venture with William Hill plc (LSE: WMH), William Hill Online, due to "a prolonged integration period and difficult trading conditions". Playtech said, "The combination of challenging economic conditions and William Hill Online's slower-than-expected start means that full-year trading will be below current market expectations." Analysts predict that the company will make €117-164 million, with a mid-point of €133 million for the year.
Late last year, Playtech acquired the assets of four affiliates for up to $250 million. Most of these affiliates were owned by Playtech controlling shareholder Teddy Sagi, who owns 40.9% of the company. Playtech then sold these affiliates to William Hill in exchange for a 29% stake in William Hill Online.
Playtech reported €33.1 million gross income for the second quarter of 2009, 23.3% more than the €26.9 million for the corresponding quarter of 2008. Gross income rose 29.8% in the first half to €66.9 million from €51.6 million in the first half of 2008.
However, Playtech said that total revenue of €27 million for the second quarter was only 0.4% more than for the corresponding quarter and was 4.2% less than the €28.2 million for the preceding quarter. Revenue from both Playtech's casino and poker operations was less in the second quarter than in the preceding quarter.
Playtech predicts that its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) will be €43-45 million in the first half. This implies that the company will miss the analysts' forecasts of an EBITDA of €93.8-127 million. The company had €48.7 million in cash at the end of June, after distributing an €18.2 million dividend.
Published by Globes [online], Israel business news - www.globes-online.com - on July 21, 2009
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