Playtech reports solid first quarter numbers

Playtech's first quarter 2009 numbers released this week are the first to include its online gambling venture with William Hill Online, which the company has described as having significantly evolved the company's income model. William Hill Online is performing well and in line with expectations, the company said in a statement.

Playtech's key performance indicator, being gross income, increased by 14% in Q1,2009 over Q4,2008. This performance is reflected by strong cash generation during Q1,2009 of more than €21 million and an enhanced adjusted EBITDA margin for the group.

The company noted the following financial highlights:

• Gross income for the quarter totalling €36.0 million, representing an increase of 46% on the €24.7 million earned in Q1,2008 and an increase of 14% on the €31.5 million achieved in Q4,2008
• Adjusted EBITDA margin for the group now exceeds 83%, reflecting the higher margin contribution from the William Hill Online business
• Net cash at 31 March 2009 was recorded as €53.0 million, an increase of €21.4 million from the year end position
• Following reduced royalties from the 'purchased assets' injected into William Hill Online, which are being more than offset by an increased level of profit share, total group revenues in Q1,2009 were €28.2 million, an increase of 14% from €24.7 million in Q1,2008 and a decrease of 10% from €31.5 million in Q4,2008. Pro-forma group revenues, adjusted historically for like for like comparison, show a 1% decrease in Q1,2009 on the previous quarter.
• Revenues from royalty income include only 13 days of William Hill Online poker migration and no contribution from the casino migration that is planned to be implemented later in the year
• Casino revenues totalled €18.5 million, an increase of 8% from the €17.2 million in Q1,2008 and a decrease of 16% on the €22.1 million earned in Q4,2008. Pro-forma casino revenues, adjusted historically for like for like comparison, show a 6% decrease in Q1,2009 on the previous quarter.
• Poker revenues totalled €8.8 million, an increase of 26% on €7.0 million in the comparable 2008 quarter and an increase of 3% on the €8.6 million achieved in Q4,2008. Pro-forma poker revenues, adjusted historically for like for like comparison, show a 7% increase in Q1,2009 on the previous quarter. Share of William Hill Online profit in Q1,2009 totalled ?7.8 million

Operational highlights included:

• William Hill integration is proceeding well with migration of the William Hill poker business to Playtech on March 19th earlier than planned
• Five new licence agreements were signed during the quarter, including well known operators Casino Grand Madrid in Spain and Gamenet in Italy
• Full launch of the Italian poker network in the second week of January 2009. Performance of the Italian poker network exceeding management expectations
• Strong pipeline of new licensees and exciting business opportunities ahead in 2009 including different online gaming operators as well as gaming operators in different and soon to be regulated jurisdictions
• Solid progress made towards entering other jurisdictions and MOUs agreed with several leading operators
• First branded game - The Gladiator - successfully launched
• Extension of live dealer gaming offering to European markets
• Launch of an improved bingo product, providing better player experience and enhanced management tools
• Exclusive multi-year licensing agreement signed with Marvel Characters B.V., a wholly owned subsidiary of Marvel Entertainment, Inc., to use Marvel's motion picture brands
• Exclusive multi-year licensing agreement signed with MGM Interactive Inc to use MGM Interactive Inc motion picture brands "Rocky" and "Pink Panther"

Chairman's report

The chairman of online gambling software provider Playtech plc, Roger Withers, reported on the company's progress to investors at the annual general meeting this week, flagging a financial performance for the year ended 31 December 2008 that showed significant growth as revenues rose by 70% to €111.5 million, whilst adjusted net profit before tax rose by 54% to €40.5 million. The Board recommended the payment of a final dividend of €7.6 cents per share, which follows an interim dividend payment of €7.6 cents per share, making a total dividend of €15.2 cents per share.

Withers noted that the group's most significant achievement during the year was the successful completion of a private placement in June 2008, which raised £112 million and underlined the confidence of investors in the company. The proceeds were used to undertake a transformational transaction with William Hill Online, which involved Playtech's acquisition of certain online gaming marketing assets, businesses and contracts from affiliates and other third parties for a total consideration of up to $250 million in cash and the immediate injection of those assets into a new joint venture with William Hill in return for a 29% interest in William Hill Online.

During the year, Playtech's enteded the newly regulated Italian market. Four of the group's 16 new licensees were derived from this major development, and regulated markets remain an important target for Playtech's expansionary ambitions in 2009.

Withers announced quarter one results (see above), saying that the venture with William Hill Online is performing well and in line with expectations. Current trading for April 2009 was positive, where on an average daily basis, gross income improved by over 5% compared with the daily average over the whole of Q1,2009.

"The Company maintains a strong pipeline of new licensees in various jurisdictions, with a strong focus on regulated markets, presenting exciting new business opportunities ahead in 2009," said Withers. "Despite the challenging economic environment, the board remains comfortable with market expectations for the full year."

Source: InfoPowa News

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