13th Nov 2006 07:03
Playtech Limited13 November 2006 Playtech Limited ("Playtech" or "the Company") Third Quarter Trading Update Playtech (AIM: PTEC), the international designer, developer and licensor ofsoftware for the online and land-based gaming industry, announces today itstrading update for the third quarter of 2006. The Company is also pleased toannounce the acquisition of certain assets and undertaking of Tribeca TablesEurope Limited, detailed in a separate announcement made today. Highlights •Total revenues for this traditionally slow quarter increased by 103% compared to the same period last year and 4% on the previous quarter to US$26.5m. This breaks down as follows: - Casino revenues increased by 95% compared to the same period last year and 2% on the previous quarter to US$22.6m. - Poker revenues increased by 274% compared to the same period last year and 26% on the previous quarter to US$3.4m. •Income from non-US players increased to 53% from 49% for the same period last year and from 52% in the previous quarter. •In line with the statement issued on 6 October 2006, Playtech continues to enforce its request from its licensees to shutdown all of their US-facing activity. To date almost all of its licensees have blocked their US-facing activity, with the few remaining expected to conclude their US blocking shortly. Playtech has adopted a policy of not accepting royalties derived from US players as of the date of the Unlawful Internet Gambling Enforcement Act 2006. As a result of this, there will be a material impact on revenue generation in the fourth quarter and into 2007. •During the quarter, an interim dividend of US$18.5m was paid, representing approximately 8.7 cents per share. Current Trading Playtech is an international business that has striven to diversify itsportfolio through both product range and geography. As a result, the Boardbelieves that the Company has a robust model that will successfully adapt to thenew legislative environment. The Company continues to have a solid balance sheetwith cash reserves of over US$90m, post the dividend payment of US$18.5m. Current trading is strong on a non-US pro forma basis. Playtech continues toincrease the number of licensees in Europe and Asia. In October 2006, Playtech'snon-US pro forma casino revenues increased by 5.5% to US$4,570k (September 2006:US$4,333k) and the Company's non-US pro forma poker revenues increased by 11.4%to US$831k (September 2006 US$746k). As a result of the deal with Tribeca Tables Europe Limited, it is expected thatPlaytech's poker revenues will significantly increase in 2007. At present, Playtech has 41 licensees. Given the Company's decision to stoplicensing its software to operators who accept bets from US players, this abovefigure includes two licensees who opted to terminate their agreements withPlaytech. A further three licensees who are heavily reliant on income from theUS are also expected to end their relationships with Playtech. Given the abovefive licensees had marginal non-US activity (total non-US royalties in September2006 were US$46k), their termination will not significantly affect the Company'snon-US results going forward. As noted bellow, Club on Park has recentlymigrated to the Playtech platform and the Company continues to actively seek newlicensees to strengthen its portfolio. Product and Platform Expansion •Videobet Videobet is the land-based spin-off of Playtech's successful onlineplatform. Videobet offers a comprehensive, server-based gaming system forland-based operators as well as stand-alone or local network casino floormachines. Featuring an improved version of Playtech's suite of exclusive,captivating games, Videobet's platform includes a powerful, real-timebackend with dynamic content delivery and unparalleled control over theentire operation down to each terminal. The advanced graphics provided by the VGP (Videobet Gaming Platform) combine thethrill of traditional gaming machines with the power and flexibility ofPlaytech's online software technology. The VGP is flexible enough to be deployedat virtually any location from betting shops and casinos to hotel lobbies andcruise ships. The Videobet games package, which currently includes Casino and FOBT games, isbased on Playtech's highly successful games. Coming soon is the development of aland-based version of Playtech's popular Live Gaming. The Videobet product is now being integrated with the operation of severallicensees in the UK and in South America and is expected to generate revenuesduring the fourth quarter of 2006. •Asian Games Playtech continues to devote significant resources to the development and launchof games in the Asian market. With the launch of Pachinko during the fourthquarter of 2006 and Solo Mahjong and Solo Mahjong Pro and a new version of thelive gaming software and functionality by the end of the year, Playtech'spenetration of the Asian market will be greatly accelerated. Other Mahjongproducts, such as the Duo and Full Mahjong tournaments will be launched during2007 alongside the launch of other Asian card games. Club on the Park During the quarter, 365 Media Group PLC launched the Club on the Park onlinegaming site on the Playtech platform. As previously announced, 365 Media GroupPLC recently acquired the business, which was formerly known as the Ritz ClubOnline. Both the online casino and online poker rooms of Club on the Park havebeen migrated to the new Playtech platform and the sites have been designed toconvey to players a look and feel reminiscent of a luxurious land-based casino.The Company will also provide a fully branded mobile solution, fully supportingand replicating the casino's look and feel onto compatible mobile phone handsets. The Club on the Park brand is focused on the UK and European markets. Both itscasino and its poker operations are tightly integrated within the Playtechplatform using Playtech's proprietary integration package that has been createdto provide added value to Playtech's existing licensees and customers. Litigation Cranway Limited (an Isle of Man company), has issued proceedings in the EnglishHigh Court against the Company and a licensee of its software claiminginfringement of EP (UK) 0625760. Following an initial review of the case,Playtech intends to vigorously defend the claim in order to achieve a successfuloutcome. Avigur Zmora, Chief Executive Officer, commenting on the results, said today: "I am very pleased with the way the Company had handled the implications of thepassing of the Unlawful Internet Gambling Enforcement Act 2006. There is nodoubt that this legislation will affect Playtech's revenue generation but theactions taken over previous years to create a balanced business portfolio andthe acceleration of non-US business will ensure the Company's continued growthprospects and success as we can already see on a non US pro forma basis. TheBoard and I look forward to the next quarter and beyond with confidence." Third Quarter Key Performance Indicators at 30 September 2006 Revenues Three months ended 30 Sep 30 Sep Change 30 June Change '000 ($) 2006 2005 2006 Total Revenues 26,546 13,100 103% 25,411 4% Casino Revenues 22,597 11,584 95% 22,141 2% Poker Revenues 3,418 914 274% 2,723 26% Active Licensees and Game Sites As of 30 Sep 30 Sep 30 June 2006 2005 2006Number of Active Licensees 42 35 42Number of Game Sites 153 117 137 Relative Share of Geographical Diversity(1) Three months ended 30 Sep 30 Sep 30 June 2006 2005 2006North America - USA(2) 47% 51% 48%North America - Canada 4% 4% 4%Europe 28% 22% 26%Asia Pacific 18% 20% 20%Rest of the World 3% 3% 2% Nominal Growth in Geographical RegionsPeriod Q3 2005 to Q3 2006 Q2 2006 to Q3 2006North America - USA(2) 87% 3%North America - Canada 103% 5%Europe 158% 17%Asia Pacific 82% (7%)Rest of the World 103% 69% Nine Months Key Performance Indicators at 30 September 2006 Revenues Nine months ended 30 Sep 30 Sep Change'000 ($) 2006 2005Total Revenues 72,725 31,798 129%Casino Revenues 62,984 29,215 116%Poker Revenues 8,231 1,420 480% Relative Share of Geographical Diversity(1) Nine months ended 30 Sep 30 Sep 2006 2005North America - USA(2) 48% 58%North America - Canada 4% 4%Europe 26% 21%Asia Pacific 20% 14%Rest of the World 2% 3% Nominal Growth in Geographical RegionsPeriod 9M 2005 to 9M 2006North America - USA(2) 89%North America - Canada 129%Europe 183%Asia Pacific 227%Rest of the World 52% (1) The relative share is calculated as the total players income derived fromthe specific region divided by the total players income from all regions (2) All revenue earned from USA was stopped on 13 October 2006 - ends - Analyst Conference Call An analyst conference call has been organised for 10:00 am GMT today hosted bythe Chief Executive Officer, Avigur Zmora. The dial-in details are:+44(0) 20 8515 2312. For US Participants: 1866 384 2824. Conference call title: Playtech Q3 trading Update For Further Information: Avigur Zmora, CEO, Playtech Ltdc/o Bell Pottinger Tel: 020 7861 3232www.playtech.com David Rydell / Amy RajendranBell Pottinger Corporate & Financial Tel: 020 7861 3232 -------------------------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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