Strong year-on-year growth in busy Playtech Q4
Restructuring of SciPlay deal followed by Geneity acquisition and further JVs.
Playtech has announced the takeover of British software provider Geneity and new joint ventures in Germany and South Africa, following a strong Q4 showing.
Gross income rose 79% year-on-year to 78.4m for the three months ended 31 December 2011, while total revenues were up 89% compared to the corresponding period in 2010, coming in at 69.6m.
The acquisition of Geneity for an initial consideration of 11m plus a further performance-based 4m is among the largest since the Israeli software provider pledged to raise £100m to finance “acquisition opportunities and investments in new joint ventures”.
Upon signing a decade-long 5m a year deal with Gala Coral in July, Playtech announced that Geneity would be the only one of the Gibraltar-based operator’s existing suppliers to remain in place. However November saw Gala Coral reveal plans to replace the provider with OpenBet for its sports betting technology.
It follows the acquisition of Ash Gaming for £23m in December, and today’s acquisition is accompanied by new joint ventures with Peermont Group in South Africa and Merkur-Gauselmann in Germany.
The two JVs announced today, both 50-50 partnerships, suggest Playtech has no plans to slow down despite the restructuring of its exclusive SciPlay joint venture with Scientific Games to a non-exclusive strategic partnership, reported exclusively by eGaming Review yesterday and confirmed by the AIM-listed provider in today’s trading update.
Today’s fourth-quarter figures revealed revenue increases in casino (13%), bingo (9%), services (18%) and videobet (22%), although poker revenues declined 2% year-on-year to 5.5m.
Playtech’s full-year revenues were up 46% to 207.5m and its gross income for the year rose 41% to 243.6m, while its share in profit from the William Hill Online joint venture was up 17% year-on-year to 36.1m for the 12 months ended 31 December.
“Over the past year the pace of change in the sportsbook segment led us to believe that we needed to acquire experienced developers to immediately give us a market leading capability,” explained Playtech CEO Mor Weizer.
Meanwhile the Peermont deal will allow the South African operator – primarily engaged in land-based gaming and hospitality activities – to establish itself as a leading online gaming operator in the South African market ahead of potential regulations in the Commonwealth country.
It involves a separate software licence agreement which would provide egaming technology and player management solutions to the joint venture.
The second JV, described as “long-term” by Playtech, keeps potential German regulation in mind and covers the Merkur Interactive online division of gaming machines provider Gauselmann Group.
Weizer said of the deal: “While the regulatory and fiscal environment remains uncertain, it is clear that a partnership between Playtech and Gauselmann can deliver a combination of market leading capabilities which has the potential to achieve a significant market share, however the market regulation develops,” and suggested that it “Can be seen to be validation of the PTTS acquisition in March 2011 which made this opportunity achievable.
Analyst Nick Batram of Peel Hunt retained his firm’s ‘Buy’ recommendation, saying: “The deals enhance the group’s position in markets where regulation is developing and, in the case of the acquisition, strengthen a product vertical where the group is relatively weak.”