Wednesday September 3, 06:15 PM
Buoyant Playtech amasses $300m war chest
By Pan Kwan Yuk
Playtech (LSE: PTEC.L - news) , the gambling software developer, said it had built up a war chest of more than $300m (£168m) to spend
on acquisitions as it announced a 45 per cent rise in half-year pre-tax profit.The company, whose clients include PartyGaming (LSE: PRTY.L - news) and Paddy Power (Dublin: PLS.IR - news) , said it expected new markets to open up in Europe as gambling regulations eased. It was lining up acquisitions that would allow the company to take advantage of those opportunities. Playtech is in the process of completing due diligence on a potential acquisition of an online marketing company - a deal that Mor Weizer, chief executive, said would significantly enhance the company's profitability. Mr Weizer said this was not the only acquisition target on the company's radar and that it was looking for groups with new games that it could move to its own platforms. For the six months to the end of June, revenue rose more than 85 per cent to $81m, after it sold more online games and won new licensing agreements. Playtech sells a number of different gaming software products, including online casino, poker and bingo, to companies such as Party Gaming, and takes a typical cut on every transaction of 15 to 20 per cent from operators. Income from casino rose 78 per cent to $58m and poker revenue more than doubled to $22m. Pre-tax profit increased from $26m to $38m. Last month, the company announced a licensee deal with Italy's Snai (Milan: SNA.MI - news) , one of the largest land-based betting outfits in the country. Mr Weizer said he expected more deals to come as countries such as Spain, France and Poland moved towards online gaming regulations. The dividend increases from 6.1 cents to 12 cents. Shares in Playtech rose 6½p to 541½p, giving a market capitalisation of £1.29bn. ● FT Comment Playtech has delivered another period of good growth and Wednesday's outlook statement appears upbeat with the company saying it has a strong pipeline of potential licensees scheduled for the second half. The additional licensees, combined with the contribution from new product launches, continue to drive growth. But with the shares trading at 19 times 2008 earnings, a premium to the wider online gaming sector, the stock looks fully priced.
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