Solid Growth At Playtech

SOLID GROWTH AT PLAYTECH
Online gambling software developer looking for more acquisitions

Playtech plc, the London-listed online gambling software provider, released its Q.2 trading update and key performance indicators this week, showing continued growth and an intention to seek further acquisitions and partnerships.

“The second quarter of 2008 was a further significant period of growth for Playtech,” said Mor Weizer, the CEO of the company, reporting revenues of $42.4 million, representing an increase of 75 percent on the corresponding quarter in 2007 and a nine percent increase on the previous quarter.

“This level of performance, particularly considering the impact of the Euro 2008 football tournament and traditional seasonality, is very impressive with licensees continuing to win relative market share,” he continued. “For the year to date, total revenues have increased by 85 percent. The Company has had a good start to July with further continued growth in both casino and poker. With organic growth and the launch of new licensees in Q3 and beyond we look forward to a strong quarter and the Board is highly confident of the prospects for the full year.”

Financial highlights include:

* Record revenues for the quarter totalling $42.4million, representing an increase of 75 percent on the $24.2million earned in Q2 2007 and an increase of 9 percent on the $39 million achieved in Q1 2008.

* Casino revenues totalled $30.8million, an increase of 77 percent from $17.4million in Q2 2007 and an increase of 13 percent from $27.2million in Q1 2008

* Poker revenues totalled $11 million, an increase of 74 percent on the comparable 2007 quarter and in line with Q1 2008

* Total revenues for H1 2008 were $81.4million representing an increase of 85 percent from the $44 million in H1 2007:
H.1 Casino revenues increased by 78 percent compared to H1 2007 to $58 million
H.1 Poker revenues increased by 109 percent compared to H1 2007 to $22 million
July has started well with further growth in both casino and poker

During the quartersPlaytech raised GBP 112 million, before expenses, by way of a Placing of up to 21,620,946 new Ordinary Shares at a price of 520p per Placing (see previous InfoPowa report) The net proceeds of the Placing are to be utilised to finance acquisition opportunities

10 new licence agreements have been signed to date in 2008, including well established operators such as Betsson, one of the largest publicly traded online gambling operators to the European market, Vista Global Limited, the group behind the celebrity endorsed Hollywood Poker brand and Genting Stanley Alderney, a subsidiary of Genting International, the leading international gaming company. This brings the total number of licensees to 60.

The company reports a strong pipeline of potential licensees with 8 signed so far in 2008 – in line with Playtech’s focus on well established online gaming operators and leading operators in regulated markets. Playtech has signjed agreements with unidentified leading Italian operators which will lead to a commanding position in the Italian market, and the company is in the process of establishing a poker network for the Italian market.

In Asia, a soft launch of Asian P2P games was achieved during H1, and a full roll out is expected during Q3.

Development of an advanced Flash Poker product has been completed, and can be expected to hit the market during Q3. Playtech has established a internal content unit which will significantly increase the number of games released to Playtech licensees gping forward.

The company has announced an exclusive licensing agreement signed with Paramount Digital Entertainment, which will enable Playtech licensees to offer games featuring two very well-known Paramount Pictures brands, “Gladiator” and “The Untouchables”

Weizer, commenting on the company’s key performance indicators this week, said: “This has been another outstanding quarter for the Group. With significant new licence agreements signed during the period and with the soft launch of the Asian P2P games and Flash Poker product Playtech is well positioned to grow in Q3 and beyond.

“Playtech has demonstrated its ability to leverage acquisitions and believe this {Placing] money raised will provide the Group with an extremely strong balance sheet that will allow it to take advantage of further opportunities that the current market offers and in relation to that the Group has commenced due diligence on a potential acquisition opportunity.”

Europe makes up 70 percent of Playtech’s revenues, which rose 78 percent on average in the region over the same period last year. Asia-Pacific currently represents 20 percent of the group’s business and revenues there rose around 88 percent over the same time.