The online casino software provider, Playtech, has released its financial report for the first half of 2018. The results are encouraging to say the least, with a 25% increase in net profit, which has raised more than a few impressed eyebrows. The net profit increase sat at €112.4m million. In terms of this success, the supplier has simply stated that the results are due to significant strategic progress in regulated markets.
Overall revenue also increased a none too shabby 4%, which takes the previous total of €421.6 and turns it into €436.5. So things are certainly looking up for Playtech, with numbers that are sure to be drawing envious gazes from competitors. But what exactly does strategic progress in regulated markets mean?
The supplier elaborated a bit, and pointed to a few key factors that had helped bump their revenue and net profit to impressive levels. Specifically, new licensee deals struck with a few important markets in Latin America, Europe and the United Kingdom. These deals included the so-called Gala Leisure Bingo Buzz United Kingdom omni-channel deal, as well as the Polish National Lottery deal, and the SAS in Portugal deal.
This, of course, is not even taking into account the enormous, highly publicised purchasing of Snaitech, the Italian supplier. Snaitech reported having generated revenue of an impressive €868m in 2017, although this does not reflect in the above stated totals. This bold move, as well as the above-mentioned deals, managed to raise investor confidence to new heights, as would be expected. The price of the suppliers stock jumped a massive 8% at its peak.
However, although things were looking highly positive for the supplier on the surface, an interesting few things can be seen with a closer look. Asian markets were called unfavourable, which took a major toll. Likewise the massive takeover deal with Snaitech was not one that came without cost, and this shows in the adjusted net profit. Adjusted net profit plummeted 34%, while adjusted EBITDA dropped a massive 15%.
But Alan Jackson, the Playtech Chairman, was quick to jump in with a bit of damage control. He made clear that the Asian market was no where the core strengths of the supplier lie, clearly suggesting that the situation should not to be blown out of proportion. His words seem to hold water, as an important number to take note of is that in this report, 69% of generated revenue stemmed directly from regulated markets. This seems to indicate that the strategic plan of Playtech is indeed going ahead as desired.