Playtech Q3 income up; William Hill JV hit by sports results
Playtech recorded a 12% year-on-year increase in gross income to 31.9m (£28.8m, US$47.6m) for the third quarter to 28.4m, the company announced in a trading update this morning, but its joint venture with William Hill has been hit hard by a string of unprofitable sports results.
PLAYTECH HAS RECORDED a 12% year-on-year increase in gross income to 31.9m (£28.8m, US$47.6m) for the third quarter to 28.4m, the company announced in a trading update this morning.
However the Playtech-William Hill Online (WHO) joint venture was hit by unusual sports results which affected sports betting margins, in particular by a low number of football match draws, and saw gross income dip 4% below the previous quarter figure of 33.1m.
The share of income contributed by WHO during the period fell to 4.2m, compared to a contribution of 5.3m in the previous quarter, but the company said it anticipated this share of income to improve as football margins in the WHO business returned in line with historic trading as anticipated. The William Hill JV was signed in December 2008, preventing year-on-year comparison.
Playtech chief executive Mor Weizer said: “”The is a solid set of numbers. Playtech has delivered and the underlying performance has been strong, with an uplift at the end of September which is continuing this month. Daily average royalties are up more than 5% than on the previous quarter.”
The exposure to sporting results has created more volatility for the company, but Weizer said: “For the first time we are exposed to sports (results) and that is more volatile than gaming, but there are many upsides. The joint venture is going very well, and we are already seeing much higher number of new accounts and the gaming activity is in line with expectations.”
Total revenues from poker and casino in the seasonally slow summer quarter also remained broadly flat, casino revenues remaining stable on the previous quarter figure of 18.5m, and poker revenues declining 3% to 8.2m, from 8.4m.
Playtech said that there had been a marked improvement in activity towards the end the quarter, with this trading momentum continued into the beginning of the fourth quarter, with daily average royalty revenues to date more than 5% ahead of those in the third quarter.
Playtech, the biggest company listed on London’s Alternative Index Market (AIM) junior bourse, said it expected adjusted earnings before interest, tax, debt and amortisation for the nine months to not less than 66m.
Weizer also added that the European poker market still had plenty of growth left in it in the face of competition from the sites still taking US bets. “European poker will be boosted by regulated markets, such as France, Italy and Serbia, in which we are or will be active. As a company, we are also be able to grow our poker revenues by adding more licensees rather than just putting more marketing money into it.
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