Playtech 1st half earnings report

9/3/09 - "Up" was the operative word in Playtech plc's half yearly results published this week as the online gambling software developer continued to shine despite the difficult trading environment.
 
Financial highlights for the six months ended June 30th included:
 
* Gross Income up by 29.8 percent to Euro 66.9 million (2008: Euro 51.6 million)
 
* Total revenues up by 9.8 percent to Euro 56.7 million (2008: Euro 51.6 million) 

* Casino revenues up by 2.2 percent to Euro 37.6 million (2008: Euro 36.8 million)
 
* Poker revenues up by 23.8 percent to Euro 17.3 million (2008: Euro 14.0 million)
 
* Adjusted EBITDA up by 33.2 percent to Euro 45.3 million (2008: Euro 34.0 million)
 
* Adjusted EBITDA margin 80 percent (2008: 66 percent) - largely due to the impact of the share of income in William Hill Online
 
* Adjusted net profit up by 19.0 percent to Euro 43.0 million (2008: Euro 36.2 million)
 
* Adjusted net profit margin of 76 percent (2008: 70 percent)
 
* Strong cash position of Euro 48.7million at 30 June 2009
 
* Interim dividend up 17.1 percent to 8.9 cents per share (2008:7.6 cents per share)
 
The company reported a long list of operational highlights that included the core royalty business performing strongly, good progress on integration with the William Hill Online business, and new agreements with Betfair and NetPlayTV (see previous InfoPowa reports). Five new license agreements were signed during the second quarter, including well known operators Casino Grand Madrid in Spain and Gamenet in Italy.
 
Management reported a strong pipeline of new licensees and exciting business opportunities ahead in 2009 including diverse online gaming operators as well as gaming operators in soon-to-be-regulated jurisdictions 
 
A successful launch of a new dedicated Italian online poker network had gone well, with performance exceeding management's expectations, and a strategic partnership had been inked with the Serbian State Lottery.
 
Management used the release of its results to announce an agreement with Olympic Entertainment Group, a leading gaming operator in the Baltic states and Eastern Europe.
 
New live-gaming facilities have proved increasingly attractive to Playtech licensees in the European market sector, who reported that the facility enhanced the experience of players significantly.
 
Playtech noted the successful launch of Gladiators - its first branded game, and the successful launch of an improved bingo product.
 
Exclusive multi-year licensing agreements were signed with Marvel Characters B.V., and MGM Interactive Inc to use motion picture brands in Playtech games.
 
Under its "Corporate" section, the company reported an initiative for its board of directors to become Code Compliant, and searches were commenced for additional new independent non-executive directors and Investor Relations representatives.
 
The company has still to appoint a permanent CFO.
 
Playtech CEO Mor Weizer commented: "The first half of 2009 has seen Playtech's licensees operating in a challenging macro-economic environment, yet total revenues have increased by 9.8 percent. The underlying performance of Playtech's core royalty business continues to be resilient. I remain confident that our industry leading products and services, diversified licensee base and strong reputation, will mean that Playtech continues to perform strongly."
 
In a conference call on the results, Weizer revealed that France represented the company’s major market focus as it neared online gambling regulation status, and that his company was in discussions with possible French partners of the future. He indicated that Baltic states likely to regulate online gambling soon included Estonia and hinted that any liberalisation of the US market would be of interest to his company.  
 
Playtech's Q3 results thus far - excluding Will Hill Online - were 1.4 percent up in the traditionally quieter northern summer season and can be expected to gather steam going forward.