16th Sep 2024 10:46
(Alliance News) - Playtech PLC on Monday said adjusted earnings would be "slightly" ahead of expectations after a strong first half and announced a deal with Mexico's Tecnologia en Entretenimiento Caliplay, SAPI de CV.
The Isle of Man-based gambling software company said trading in the six months ending June had been "good" with a broad continuation of trends noted in its statement in May.
As a result, Playtech expects 2024 adjusted earnings before interest, tax, depreciation and amortisation to be slightly ahead of current consensus expectations, mainly driven by a strong performance within the business-to-business division.
In response, shares in Playtech rose 8.4% to 709.00 pence in London on Monday morning valuing the business at GBP2.19 billion.
Growth in the B2B unit was driven by a combination of revenue growth in the Americas and a focus on tighter cost control, the firm said in a statement.
Playtech said talks with Flutter Entertainment PLC over the possible sale of Snaitech continue. These discussions were announced in August.
The firm said Snaitech, the Italian betting operation, continues to see underlying growth in wagers against a tough comparative while being negatively impacted by customer-friendly sporting results in Italy, particularly at the start of the year.
In addition, Playtech said it had struck a deal with Caliplay, a subsidiary of Corporacion Caliente SA de CV, ending a long-running dispute with the firm.
Under the strategic agreement, Playtech will hold a 31% interest in Caliente Interactive Inc and be entitled to receive dividends alongside other shareholders.
Playtech has entered into a revised eight-year B2B software licence and services agreement and will receive from Cali Interactive an additional USD140 million paid in cash, phased over a four-year period.
In addition, Caliplay has resumed paying Playtech its software and services fees with more than EUR150 million of the unpaid fees due from Caliplay having now been received.
The balance has been paid into escrow and is to be released either on the closing of the revised arrangements, expected in the first quarter of 2025, or by the end of 2025 at the latest.
Chief Executive Mor Weizer said: "The revised arrangements mark the beginning of an exciting new chapter that will build on the impressive progress to date, with a view to driving significant further growth for Cali Interactive in the future."
"With a strong position in Mexico and exposure to other fast-growing markets in the Americas and Europe, we remain well-placed to deliver strong growth in our B2B business in the coming years."
The two parties have been in dispute regarding a dispute over unpaid fees. This is related to uncertainties over Caliplay holding an option to redeem additional services fees from its strategic agreement with Playtech.
The wrangle became the subject of court action. Playtech was of the position that this option had expired, whereas Caliplay believed it was still valid.
Playtech will release half-year results on September 30.
By Jeremy Cutler, Alliance News reporter
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