Playtech issues profit warning as TradeTech struggles

(Sharecast News) - Playtech warned on profits on Friday as it highlighted "challenging" conditions in its financial trading division, TradeTech.
The gambling software developer said full-year adjusted earnings before interest, tax, depreciation and amortisation were expected to fall "a little below" prior expectations after TradeTech struggled in September and October.

The company added that 2019 results for TradeTech are now on course to be "well below" management's expectations.

Playtech said it has begun reviewing options for its Casual and Social Gaming business, including a possible partial or complete sale after it reported flat revenue and higher costs at the half year stage.

However, the core B2B gambling and Snaitech segments have continued to exceed management expectations, while trading in Asia has remained stable and is on track to contribute €115m in annual revenue.

Playtech also confirmed the signing of a long-term structured agreement to become a strategic technology partner with Columbian betting brand Wplay. All of Wplay's retail and online activity will be migrated to the company's IMS player management platform, while the brand's sports and casino betting operations will be exclusively powered by the Isle of Man-based firm's software.

Chief executive Mor Weizer said: "I am delighted and excited to announce this strategic partnership with Wplay. The strength and quality of the Wplay brand combined with Playtech's 20 years of technology leadership in the industry will see us drive the online growth of the market in Colombia."

At 0850 GMT, the shares were down 0.1% at 410.09p.

Shore Capital said: "Overall, with trading in the core B2B and Snaitech remaining robust, Asian revenues stabilised albeit at a lower level, and TradeTech well below prior expectations, we would expect to see our current FY2019F EBITDA estimate of €391m lowered by circa €10-20m."