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Playtech Encouraged Despite Q3 Revenue Decline

21st October 2009 8:10 am GMT

Playtech Limited has reported total revenues for the third quarter of 2009 amounting to €27.7 million, a drop of 3% on the corresponding period last year, with strong growth in poker partially offsetting a decline in casino revenue and lower income from William Hill Online as a result of adverse sports results.

During the seasonally slow summer quarter, revenues from poker increased by 8% to €8.2 million while casino revenues fell 10% to €18.5 million.

Gross income for the quarter increased by 12% to €31.9 million but declined quarter-on-quarter following a run of unusual sports results reducing the sports betting margins of William Hill Online (WHO). Playtech said however that the performance of WHO outside of sports betting was better than expected.

The share of income from WHO amounted to €4.2 million during the quarter, compared to a contribution of €5.3 million in the previous quarter. Playtech said that the share of income is expected to improve assuming football margins in the WHO business return to historic trading levels.

Gross income for the nine month period amounted to €98.8 million, an increase of 24% on the same period last year, with total revenues up 5% to €84.4 million. Adjusted EBITDA for the nine month period amounted to over €66 million, with a share of profit from WHO of €14.5 million.

Playtech said that its poker network in Italy continues to progress with a number of operators due to launch during the fourth quarter. The company also plans to launch a new version of its bingo product which will be further boosted by increased liquidity contributed by existing and new licensees.

The company added that the launch of a new Playtech casino on WilliamHill.com before the end of the month will complete the integration of WHO's poker and casino operations onto the Playtech platform.

Going into the fourth quarter, Playtech said that initial trading in October has been strong with daily average royalty revenues more than 5% ahead of Q3. Together with anticipated revenues from new licensees, the Board said it expects better trading conditions during the final quarter of the year.

As at September 30th the company had net cash of €67.8 million, before payment of interim dividend of €21.4 million payable later this month.

Shares in Playtech Limited (Co. Profile) (LSE:PTEC) are currently trading at 342.00 pence per share in London this morning.

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