Playtech proves 80-20 rule ahead of iPoker split

The share of Playtech’s business generated by its top 15 licensees grew to nearly 80% over the past year, the world’s leading egaming software supplier revealed this morning.

Playtech’s announcement it generated 79% of its revenues from its 15 most valuable clients in the first half of 2012, up from 72% a year earlier, coincides with the imminent segregation of operators’ players on its iPoker network into two groups based on a network performance scoring mechanism. Top-tier Playtech client Paddy Power yesterday welcomed the new policy, scheduled to come into force this month, commenting that it “should offer a better playing experience for our customers.”  Playtech’s poker revenues were down 9% to €9.7m in the six months to 30 June.

Playtech credited the increased concentration of its business among its 15 largest licensees to “acquisitions and an overlap between customers of the acquired businesses and existing licensees.”

The software provider acquired turnkey services business PTTS in March last year, mobile provider Mobenga in July of 2011 and casino games developer Ash Gaming the following December.

Playtech’s top 2 clients correspondingly grew their share of the group’s total revenues to 41%, from 27%. While Playtech did not disclose in its H1 results presentation exactly which companies these were, one is understood to be Imperial E-Club Ltd, owner of the Titan brands, among others. CEO Mor Weizer revealed following last July’s Q2s that it had generated more than £10m ($16.1m) from this operator, its largest client.

The top 5 licensees, again undisclosed, but understood to included William Hill and bet365 in addition to Imperial E-Club, grew their collective share of Playtech revenues to 61%, from 58%, while the top 10 grew to 73% from 64%.

H1 earnings for the group were up by 64% to €91.2m, with revenue up by 101% to €153.8m, boosted by the performance of its acquisitions and its core casino offering. Services revenue came in at €52.5m versus €0.8m last year, attributable to the PTTS business it acquired from 49% shareholder Teddy Sagi.

Even with acquisitions stripped out to give like-for-like comparisons, group earnings were up 20% to €66.8m and revenue by 23% to €93.3m, reflecting the underlying strength of the core business.

Revenues from its dominant online casino segment were up 36% to €71.5m, which the company said had been “further complemented by incremental revenues from the acquisition of [games developer] Ash Gaming.”

The poker decline was attributed to the continuing trend in the market. Playtech said it was “currently in discussions with a number of significant new licensees who wish to join the network”, with a recent report by Pokerfuse suggesting one of these could be Everest Poker.

Bingo revenues, from its Virtue Fusion network and software, home to bet365, Paddy Power and Hill’s bingo, as well as Gala, Mecca, Virgin and Sky, were up an impressive 24% to €8.8 million, driven by the launch of its bingo jackpot promotion in the period.

The company added that it had made a “strong start to Q3”, with daily average revenues up over 20% on a like-for-like basis, and that its board looked “forward to the full-year outcome with confidence”.

Casino Choice journalist

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