Q2 Key Performance Indicators

RNS Number : 9854V

Playtech Limited

21 July 2009

 



Playtech Limited
('Playtech' or 'the Company')

Key Performance Indicators for the quarter ending 30 June 2009 

Announcement of strategic partnership with the Serbian State Lottery 

Playtech (AIM: PTEC), the international designer, developer and licensor of software for the online, mobile and land-based gaming industry, today announces its Key Performance Indicators for the second quarter ended 30 June 2009. 

The underlying performance of Playtech's business continues to be resilient with the Company successfully exploiting a series of new opportunities in the period and delivering adjusted EBITDA up over 27% on the first half of 2008. Despite the industry experiencing a slowdown in activity, Playtech's diversified licensee base has allowed the Company to deliver gross income 23% ahead of Q2 2008 and only slightly below that achieved in the first quarter of 2009.

The William Hill Online (WHO) business is making encouraging progress after a slower than anticipated start to the year due to a prolonged integration period and difficult trading conditions. This will impact our expectations for the first year's trading, however, Playtech remains confident that the WHO transaction will prove to be transformational for the Company and will make an important contribution to earnings in 2009 and beyond. 

The Board is confident the Company will deliver strong growth for the full year to December 2009 compared to 2008.  However, owing to the slower than anticipated start to WHO and the general challenging economic environment impacting some of our licensees, the Board believes that full year trading will be below current market expectations. Adjusted EBITDA[2] in the first half of 2009 is expected to be in the range of €43 million to €45 million. 

Today the Company announces that it has entered into a strategic partnership for the provision of Playtech's Casino and Poker product to the Serbian State Lottery, the sole provider of online gaming in that country. In addition the Company has signed a number of significant licence agreements in the first half of 2009, such as with Betfair and NetPlay TV, that will start to deliver additional revenue streams towards the end of the year which, in addition to the positive impact of William Hill Online migrating all of its casino activity to Playtech's platform, provide new initiatives for growth in the medium term.

Financial highlights

• Gross Income[1] for the quarter rose 23.3% to €33.1 million, (Q2/08: €26.9 million) and was slightly below the €33.8 million achieved  Q1/09[3], with a decrease of 1.9%; 
  

• Gross Income[1] for H1/09 was up 29.8% to €66.9 million, (H1/08: €51.6 million);
  

• Adjusted EBITDA[2] for the Group for the six months is expected to be not less than €43 million;
  

• Net cash at 30 June 2009 of €48.7 million, after payment of a dividend totalling €18.2 million (Q1/09: €53.0 million before payment of dividend);
  

• Total Group revenues in Q2/09 increased by 0.4% to €27.0 million, (Q2/08: €26.9 million) but decreased by 4.2% from €28.2 million in Q1/09;
  

• Casino revenues decreased by 8.1% to €17.9 million, (Q2/08: €19.5 million) and decreased by 3.3% on the €18.5 million earned in Q1/09; 
  

• Poker revenues increased 17.8% to €8.2 million, (Q2/08: €7.0 million) but decreased by 6.4% on the €8.8 million earned in Q1/09;
  

• Total Group revenues in H1/09 were up 7.0% to €55.2 million, (H1/08: €51.6 million); 
  

• Share of William Hill Online profit in Q2/09 totalled €6.1 million, an increase of 9.8% 
  compared with a contribution of €5.6 million in Q1/09[3].

[1] Gross Income is defined as income from royalties plus profits generated from the Company's share in William Hill Online.

[2] Adjusted EBITDA includes the Share of William Hill Online profit

[3] The Q1/09 figures have been re-calculated following adjustment to the method by which profits are allocated to Playtech under the agreements with William Hill.

Operational highlights

• Outside of the period the Company secured a new agreement with Serbia's State Lottery which will benefit from Playtech's online casino and poker products. 

• Significant new licence agreement signed with Betfair to provide casino and bingo products which is expected to deliver additional royalties commencing Q4/09;

• Outside of the period the Company signed a Memorandum of Understanding with NetPlay TV Plc in the United Kingdom for a five year exclusive licence to provide the full range of Playtech's software including casino, poker, bingo, TV and mobile games, positioning Playtech as a market leader in TV gaming technology;

• The Italian poker network is exceeding management's expectations and is now Italy's third largest poker network by revenues generated by the network licensees, while further positive progress in regulations will bring new opportunities in Italy from this strong base; and
  

• Agreement with Chillipoker, a strategic partner in the French market, in anticipation of the introduction of new regulations liberalising the French market for on-line gaming.

Strategic partnership with Serbia's State Lottery

In line with the Company's strategy to focus on anticipated regulatory change in different jurisdictions, significant progress has been made in Europe and around the world. 

Today the Company is delighted to announce that it has entered into a strategic partnership for the provision of Playtech's Casino and Poker product to the Serbian State Lottery. 

Under the terms of the agreement, the Serbian State Lottery, which by law is Serbia's exclusive online gaming license holder, will benefit from Playtech's online casino and poker products. All games and products will be provided in the Serbian language and will be fully customised to appeal to the local audience.

Playtech's market leading operating platform will integrate with the existing Serbian Lottery platform enabling it to provide its customers with a seamless gaming experience. The agreement is a landmark for Playtech - its first with a state lottery - and yet another endorsement of Playtech's first class product offering. 

The Serbian State Lottery decided to partner with Playtech because of its market leading software expertise in regulated markets and customer-focused approach. 

Current trading

Playtech enjoys a solid pipeline of new licensees and exciting business opportunities ahead in 2009 with operators in soon-to-be-regulated jurisdictions, in addition to various other online gaming operators. Several additional MOU's were signed with operators in the period.

During the third quarter the Company will work with its licensees to exploit additional opportunities that have appeared in Italy, as the government there moves to further liberalise online gaming. 

Initial trading in July 2009 continues to be flat over Q2/09. Playtech remains strongly cash-generative: gross income is significantly ahead of last year and the Company has maintained its EBITDA margins through careful management of its administrative and other expenses. 

Second quarter Key Performance Indicators at 30 June 2009

Gross Income

Three months ended '000 (€)	30 Jun 09	30 Jun 08	Change %	31 Mar 09	Change %
Gross Income	33,146	26,888	+23.3%	33,794	-1.9%
Total Revenue	27,000	26,888	+0.4%	28,198	-4.2%
WHO Share of profit	6,146	-		5,596	+9.8%

Total Revenue

Three months ended '000 (€)	30 Jun 09	30 Jun 08	Change %	31 Mar 09	Change %
Total revenue	27,000	26,888	+0.4%	28,198	-4.2%
Casino revenue	17,940	19,521	-8.1%	18,547	-3.3%
Poker revenue	8,210	6,969	+17.8%	8,773	-6.4%

Revenue - share of geographical diversity [1]

Three months ended	30 Jun 09	30 Jun 08	31 Mar 09
Europe	62%	72%	63%
Asia Pacific	32%	21%	31%
Rest of the world	6%	7%	6%

Revenue - nominal change in geographical regions

Period	Q2/09 to Q2/08	Q2/09 to Q1/09
Europe	13%	-4%
Asia Pacific	96%	+2%
Rest of the world	18%	-6%

First half Key Performance Indicators at 30 June 2008 

Gross Income 

Six months ended '000 (€)	30 Jun 09	30 Jun 08	Change %
Gross income	66,940	51,588	+29.8%
Total revenue	55,198	51,588	+7.0%
WHO share of profit	11,742	-

Total Revenue 

Six months ended '000 (€)	30 Jun 09	30 Jun 08	Change %
Total revenue	55,198	51,588	+7.0%
Casino revenue	36,488	36,761	-0.7%
Poker revenue	16,983	13,950	+21.7%

Share of geographical diversity

Six months ended	30 Jun 09	30 Jun 08
Europe	63%	73%
Asia Pacific	31%	21%
Rest of the world	6%	6%

Nominal change in geographical regions 

Period	H1/09 to H1/08
Europe	+22%
Asia Pacific	+115%
Rest of the world	+21%

[1] The relative share is calculated as the total players' income derived from the specific region divided by the total players' income from all regions

There will be a conference call for analysts at 9.00 am. The details are as follows:

Dial-in no UK: [phone]

Dial-in no US: [phone]

Conference title: Playtech Q2 KPIs

A replay will be available thereafter for one week:

Dial-in no UK: [phone]

Dial-in no US: [phone]

PIN code: 4121427#

- Ends -

For further information contact:

Mor Weizer, CEO, Playtech Ltd  Shuki Barak, CFO, Playtech Ltd c/o Bell Pottinger Corporate & Financial	[phone]
Piers Coombs / Bruce Garrow Collins Stewart	[phone]
Mumtaz Naseem  Deutsche Bank	[phone]
David Rydell / Olly Scott / Laura Pope Bell Pottinger Corporate & Financial	[phone]

About Playtech

Playtech develops unified software platforms for the online and land based gambling industry, primarily targeting existing online operators wanting to upgrade their system; sportsbooks looking to diversify and land-based operators making their online debut. Playtech gaming applications - online casino, poker, bingo, mobile gaming, live gaming, land-based kiosk networks and fixed-odds games - are fully inter-compatible and can be freely incorporated as stand-alone applications, accessed and funded by players through the same user account and managed by the operator by means of a single powerful management interface. Founded in 1999, Playtech has over 750 personnel distributed globally, around seventy five percent of whom are engaged in research and development of current and future gaming technologies.

www.playtech.com

 

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