Thursday 12 December 2019

Playtech warns on profits as ‘highly challenging’ conditions hit finance arm

The company said its TradeTech unit failed to hit expectations after difficult trading conditions in September and October.

Gambling software firm Playtech has warned that earnings will be below expectations in 2019 (PA)
Gambling software firm Playtech has warned that earnings will be below expectations in 2019 (PA)

By Henry Saker-Clark, PA City Reporter

Gambling software business Playtech has issued a profit warning after its financial division performed “well below” expectations.

It said the weak performance is expected to mean the group’s earnings before interest and tax will be “a little below” consensus for 2019.

The FTSE 250 firm said it is reviewing options for TradeTech, its financial trading arm, after it said “highly challenging” conditions in September and October hit revenues.

Playtech said the financial arm had a positive start to the year but has struggled in recent months.

The company has seen its shares slump in value throughout 2019, as it has sought to deal with corporate governance problems following pressure from activist shareholder Jason Ader.

Last week, Mr Ader called on Playtech to dispose of some of its assets, including TradeTech, to bolster its cash position.

The group said its regulated business-to-business (B2B) gambling unit has performed well, with revenues rising 12% for the past four months, excluding acquisitions.

In a separate update, Playtech also announced it has signed a new long-term B2B agreement with Wplay, a leading betting and gambling brand in Colombia.

Mor Weizer, chief executive of the company, said: “As outlined at the interim results, our pipeline of new licensees is strong across all segments of our core B2B offering.

“This agreement demonstrates the execution of our strategy to continue to deliver structured agreements with the leading brands in the most attractive markets globally.

“Latin America remains a key market for us and with this long-term partnership with Wplay we have added another important strategic partner in the region”.

Shares in the company fell 1.6% to 404.1p in early trading on Friday.

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