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Playtech (LON:PTEC) report: Q3 Trading update

Contributed by Daniel Stewart & Company

By Daniel Stewart & Co

- PTEC this morning announced its Q3/10 results inline with expectations, revenue increased by 17% to ?32.5m vs Q3/09 and excluding the impact of France total revenue was down only 2% vs Q2/10 lower than expected.

- As expected poker weakness continues revenues down 30% to ?5.7m vs Q3/09 and 21% lower than Q2/10. Casino revenues were down 13% compared to Q2/10, however excluding the ‘France closure’ casino revenues are down by 2%. Bingo performed well up 11% on Q2/10 a reflection of strong growth from Virtue Fusion and the new Italian bingo network. The share of the profit from WHO is slightly higher than expected ?8.8m (?8.3m) and up 15% vs Q2/10.

- Betfair casino is performing strongly since the launch of its web-based format at the end of August. Italian bingo is performing strongly achieving a market share in excess of 25% in September with additional licensees commencing in Q4, Virtue Fusion bingo network continues to grow with potential to expand its European profile. French poker network launched in Q4 with additional licensees in the process of obtaining regulatory approval.

- EBITDA for the nine months to September is expected to be no less than c?78m and we are confident that PTEC will exceed FY10E EBITDA of ?89m. Daily activity in Q4/10 is over 7% above the daily average of Q2/10 (c5% expected) with Betfair casino games NGR growing strongly and WHO performing better than expected combined with growth in bingo, we expect PTEC to outperform.