Last checked at 
(Alliance News) - Playtech PLC on Friday issued a profit warning due to tough trading conditions for its TradeTech business in September and October.
Shares in FTSE 250-listed Playtech were down 1.9% at 402.90 pence in London in early morning trade, having recovered after dropping to 382.10p initially.
The online gambling and sports betting software firm said its financial division, TradeTech, had a positive start in the second half of 2019 but trading conditions were "highly challenging" in September and October.
Consequently, the TradeTech's 2019 results are forecast at "well below management's expectations" and Playtech is assessing its options for the unit.
This weak performance from TradeTech is expected to result in the group's overall adjusted earnings before interest, tax, depreciation and amortisation for 2019 being "a little below" consensus.
The company's Regulated B2B Gambling business, however, has performed well, with revenue up 12% year-on-year for the first four months of the second half of 2019 excluding acquisitions and at constant currency.
Playtech separately announced the signing of a long-term structured business-to-business agreement with Aquila Global Group SAS, also known as Wplay, a leading betting and gaming brand in Colombia. Playtech will become Wplay's strategic technology partner.
All of Wplay's retail and online activity will be migrated to Playtech's IMS player management platform and Playtech will exclusively power all software across Wplay's regulated verticals, which includes Wplay's sports and casino offerings.
Chief Executive Mor Weizer said: "As outlined at the interim results, our pipeline of new licensees is strong across all segments of our core B2B offering. This agreement demonstrates the execution of our strategy to continue to deliver structured agreements with the leading brands in the most attractive markets globally. Latin America remains a key market for us and with this long-term partnership with Wplay we have added another important strategic partner in the region".
Snaitech, another of Playtech's units, has performed well.
In Asia, the current run rate will contribute around EUR115 million of revenue in 2019, with the current run rate worth around EUR100 million on an annualised basis. An incentivisation programme is ongoing in Asia, aimed at protecting Playtech's market position, but Asia is still "highly competitive".
Looking ahead, Playtech is considering the sale of its Casual & Social Gaming business, either in whole or in part, as part of a simplification plan.
Playtech has extended its revolving credit facility since it interim results and increased the amount available to EUR317 million. Its EUR297 million convertible bond issue matured on Tuesday this week and was repaid from proceeds from the company's EUR530 million 4.25% senior notes issued March 2019.
In addition, its EUR25 million share buyback programme is now complete after its launch in August. Playtech has now returned a total of EUR121 million to shareholders in 2019 via buybacks and dividends.
By Anna Farley; annafarley@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
