Online gaming and financial trading giant Playtech PLC (LON:PTEC) has released a trading update last Friday, warning its full-year earnings will not meet analysts’ expectations. The company added that it may try to sell its underperforming spread-betting unit.
Playtech commented in its trading update report that:
Following a positive start to the second half, trading conditions in TradeTech have been highly challenging during September and October and Playtech expects the division’s results for 2019 to be well below management’s expectations. Playtech is evaluating all options for the business.
Financial betting companies have been experiencing difficulties following EU watchdog’s ESMA measures on CFDs. IG Group and Plus500 have already released significant drops in profits this year.
Playtech’s shares fell 3% on Friday to 400p. According to the group, TradeTech makes more than 70% of its revenues in Europe. Playtech added that Tradetech was a “high-quality business” that would benefit from being larger scale than it was.
LeapRate reminds that activist investor Jason Ader criticised CEO Mor Weizer’s pay earlier this year.
Ader made a presentation to the activist hedge funds forum Sohn Investment Conference IN London, urging the group to dispose of assets including TradeTech, suggesting that Playtech was the perfect candidate for a leveraged buyout. According to Ader, an initial equity investment in Playtech of €715m could increase to more than €4bn in the next five years.
Playtech also announced that it had teamed up with the Colombia gambling company Wplay, extending its reach in Latin America.
In the period from July 1 to October 31, gambling revenues from Playtech’s business-to-business operations in regulated countries were up 12%. The results at Snaitech, the Italian gaming business Playtech bought last year, continued to be “very strong”.
The post Playtech warns it might sell its underperforming spread-betting unit appeared first on LeapRate.
Playtech warns it might sell its underperforming spread-betting unit was first posted on November 29, 2019 at 5:01 pm.
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