Growth in largely unregulated Asian markets and in mobile ensured the world’s leading igaming supplier Playtech remained on track following the end of its lucrative online JV with William Hill.
The main gaming software supplier to Bet365, Paddy Power, William Hill, Titan, Gala Coral and shortly Ladbrokes posted an impressive 15% increase in revenues to €176.8m in the first six months of 2013. Earnings (EBITDA) were up 3% to €94.3m, with underlying earnings up by 13% to €78.9m once the 3.5-month contribution from William Hill Online, in which Playtech sold its stake during the period for £424m, was stripped out.
The company’s flagship online casino product – accounting for more than 50% of group revenue – drove the growth, up by 26% to €90.3m, as services dipped 2% to €51.6m due to the end of the Hill’s JV.
The sports betting segment however displayed the most robust growth, revenues up 92% to €9.1m, oustripping for the first time the ailing poker segment (€8m), with mobile sports betting platform Mobenga, deployed by mobile leader Paddy Power among others, driving the improvement.
“A number of larger licensees are reporting that mobile bets account for more than 50% of sports betting volumes”, said CEO Mor Weizer (pictured) today, with Mobenga contributing €7.7m or “46% of the overall growth in mobile-related revenue”. Mobile was up 151% across all products to €13.8m from just €5.5m a year ago, with the casino component alone up an impressive 339% to €5.2m.
For all Playtech’s talk of regulated markets however, the largely grey and black Asia region was by far the fastest growing in the first half, revenues up 41% to grow from 19% to 24% of the whole, with Europe’s share correspondingly falling from 69% to 64%.
According to CFO Ron Hoffman in the analyst earnings call, the proportion of Playtech’s revenues coming from regulated territories however still grew four percentage points to 36% over the last 12 months, with this rising to 45% if the services mainly provided in dot.com territories were excluded.
On the growth, Hoffman said this had resulted from organic growth by existing licensees, “some from operators who are European-based, some of them you know”, and that it was “natural growth in Europe would be slower” given the trend towards dot.country regulation. He also pointed out that all major new business – Ladbrokes, Betfair poker and bingo, Gala Coral, Unibet in France – was in regulated markets.
Weizer added: “The key message as illustrated by the numbers, is turning dot.com activities into regulated income streams. This is the same for Asia, Latin America or any other markets.”
Hoffman also told analysts that it expected the “worst case scenario” for Playtech of the UK point-of-consumption tax due to come into force in December 2014 “was approximately less than 5% of our revenues.” Around 30% of the supplier’s business comes from the UK.
Article written by Katy Stirland
