Playtech Releases Q4 2011 Results

Gambling software developer Playtech Limited has released its fourth quarter 2011 financial results, highlighting a big jump in gross income, and a couple of joint venture announcements.

Commenting on his company's quarterly performance, Playtech CEO Mor Weizer said:

"Playtech has again delivered a robust fourth quarter performance. As a result, the Board is very comfortable with market expectations for the year ended 31 December 2011 and looks forward to 2012 with confidence."

"Growth from our existing business has created a solid platform for 2012. Taken together with today's other announcements, I believe Playtech is well positioned to take advantage of market opportunities wherever as and when they appear."

"It is clear that there is continuing momentum towards regulated gaming in Europe, with Denmark recently launched in regulated form, and both Spain and Belgium due to regulate this year. The US Department of Justice's pre-Christmas guidance has provided further encouragement for those looking to achieve regulation in the US . Playtech is preparing itself for each and every market to help its customers and partners make the most of the changing regulatory landscape and invest into those to certify its products."

"Playtech's acquisition of Geneity will enhance its sportsbook capabilities, replacing Playtech's existing offering and providing an important entry point for many operators in newly regulated markets. Taken with the acquisition of Ash Gaming, which we announced in December, we have invested in a substantially enhanced development capability in both product vertical and content areas."

Key financial indicators for the fourth quarter were:

• Gross income up 79% to €78.4 million, (Q4/2010: €43.9 million)

• Total revenues up an impressive 89% to €69.6 million, (Q4/2010: €36.9 million) and 13% higher than the €61.5 million achieved in Q3/2011.

Quarter on Quarter:

• Casino revenues up 13% to €32.8 million, (Q3/2011: €28.9 million)

• Poker revenues down 2% to €5.5 million, (Q3/2011: €5.6 million)

• Bingo revenues up 9% to €4.1 million, (Q3/2011: €3.8 million)

• Services revenues up 18% to €23.1 million, (Q3/2011: €19.5 million)

• Videobet up 22% to €2.7 million, (Q3/2011: €2.2 million)

12 months ending 31 December 2011:

• Gross income up 41% to €243.6 million, (2010: €173.1 million)

• Total revenues up 46% to €207.5 million, (2010: €142.3 million); an increase of 15% excluding impact from 2011 acquisitions

• Share of profit from William Hill Online (WHO) up 17% to €36.1 million for the full year (2010: €30.8 million), including €8.8 million in Q4/2011

• Cash balances net of credit facility debt at 31 December 2011 in excess of €137.3 million, after 2011 payment of €83.3 million for PTTS, IGS, Mobenga and Ash Gaming.

A trading update provided by Playtech announced that the company started the first 22 days of January up 25% over the same period last year in software royalties.

Playtech's joint venture announcements included:

• Playtech has entered in a 49.99% joint venture with German land-based gaming operator and owner of the Merkur gaming brand, Gauselmann.

• A 50:50 partnership with Peermont , a South African casino and resort operator, in anticipation of expected revisions to South African online gaming regulations.

• Rumours circulating in the industry this week of trouble in the joint venture between Scientific Games and Playtech seem to have been confirmed with the announcement that the Sciplay joint venture is to be restructured to a simple supplier relationship, allowing for expansion of the scope outside the initial lottery arrangement and on a non-exclusive basis.

Acquisitions announcements included:

• The acquisition of UK based Geneity for £11 million in cash. Geneity is a sports book developer.

• Integration is commencing, following its acquisition of Ash Gaming last month.

• Mobenga launched with Betchoice and provided Skybet with scorecast betting capabilities.

• Preparation continues for licencees launch in the Spanish and Danish markets.

• Videobet operational development including datacentre capacity and international expansion.

• Have begun initial projects with an outsourcing company in Kiev.