After 2016´s Strong H1, Playtech Shares the Wealth

Performance results have affirmed Playtech´s strategy of approach.

After strong revenue growth in the first half of 2016, Playtech is spreading it around with a spree of small acquisitions and some new dividends.

Dividends Trumpet Growth

H1 of 2016 has seen revenues rise 18 per cent to €337.7m. Although pre-tax profit fell 42 per cent due to a sharp rise in financing costs, overall growth has apparently kept Playtech owner owner Teddy Sagi bullish, raising interim dividends 15 per cent to 11 cents per share.

The sports betting, online casino and poker games software provider further announced an additional €150m on a special dividend to be paid in December.

Casino Offerings Key

Of his organisational position, Chairman Alan Jackson explained that his company´s “industry-leading” casino offerings are keying the Gaming Division´s strong growth. Further sustainability has already been secured via new agreements signed with “important” new licensees and the renewal of “significant contracts.”

Strategy Implementation

Not content to sit on liquidity placed June 6th at close to €800m, Playtech has already set about investing it effectively, as evinced in rent acquisitions including this year´s €138m takeover of former rival operator Best Gaming Technology (BGT) and last year´s purchase of Quickspin.

Showing Some Restraint

Despite the temptation towards freewheeling spending in this new iGaming era of Mergers and Acquisitions, Playtech has remained prudent, pulling out of a proposed £460m deal for trading platform Plus 500 which collapsed last year, then in April passing on the purchase of Openbet ultimately acquired by a William Hill and Sky Bet-backed group.

Confidence in Efficiency

Jackson attributed organisational confidence as the basis for Playtech´s adoption of the aforementioned progressive dividend policy and a €150m special dividend return to shareholders whilst maintaining an efficient and flexible balance sheet. The special dividend totaling a payment of 46 euro cents per share is due to be paid out on Dec. 6.

Forecast

Looking ahead to H2, Playtech CEO Mor Weizer intimated that Playtech´s acquisitions were far from complete for the year, revealing that his company as "a strong pipeline of M&A targets…in both gaming and finance divisions."

Assessment

With year-on-year revenue growth for the Gaming Division standing at 18%, the bottom line would indicate the effectiveness of the Playtech strategy so far.