Playtech H1 profits up 28%, buys stake in BGO
Supplier's profits and revenues up more than 20% as firm acquires 33.3% of UK bingo and casino operator BGO
Playtech this morning posted a 28% increase in EBITDA and a 21% increase in revenues for the first six months of 2014 as the company revealed it had acquired a 33.3% stake in bingo and casino operator BGO for £10m.
Total revenues for the period ended 30 June totalled 214.4m, up from 176.8m recorded during the corresponding period in 2013, while EBITDA grew from 76.2m last year to 97.6m.
The growth was primarily driven by a strong casino performance which saw revenues increase by 29% to 116.2m comprising 54% of total revenues, up from 51% in 2013.
Other services amounted to 61.3m, up 19% from 51.6m, while its sports division, which includes sportsbook provider Geneity, posted a 35% increase in year-on-year revenues from 9.1m to 12.3m.
Mobile also saw good growth with revenues up 56% driven primarily by casino with the channel having contributed roughly 10% of total revenues.
Poker revenues fell almost 8% to 7.4m, a decline the company said it was addressing via the trial of a new rake system in Italy aimed at reducing the cannibalisation of players within its iPoker network.
Bingo also suffered a fall across H1 as revenues dipped 9% to 8.4m, however, this is expected to pick up in H2 following its recent deal with Trinity Mirror and soon-to-be signed deal with BGO.
As well as agreeing a long-term contract to supply BGO with its full software package, Playtech has also invested £10m in return for a third of the business. According to Playtech, the cash will be primarily used to fund an innovative marketing strategy for the brand which first launched in late 2012.
Playtech chairman Alan Jackson said the firm had managed to deliver an “outstanding set of interim results” due to careful managing of its cost base and its continual development of new products.
“The company has focused on deepening its licensee relationships; creating innovative new content; improving its products across web and mobile, and providing its customers with cutting edge products and services,” Jackson said.
“As online gambling continues to develop, it is pleasing to see Playtech’s investment in mobile and further product development paying-off,” he added.
Playtech reported trading in H2 to have started well with average daily revenues for the first 59 days up 21% versus the comparable period last year.
The company’s cash balance was reduced from 576.2m in H1 2013 to 366m this year, a reduction Playtech attributed to the payment of a special dividend in March.
Playtech’s share price after early morning trading was up 34.5p to 697.5p, a rise of more than 5%.