Playtech gamble on new strategy

10th January

Playtech is to pursue an “aggressive” acquisition strategy after the world’s largest publicly traded online gaming software supplier enjoyed strong growth towards the end of last year.

The European Championship of Online Poker held in December, its largest event, which awarded $2.5m (£1.26m) in guaranteed prizes, helped monthly sales reach a “record level”.

Poker, which currently accounts for 30 per cent of revenue, is growing faster than other online games, said Mor Weizer, chief executive.

He added of possible acquisitions: “We are very aggressive in our approach and we are constantly analysing opportunities.”

Playtech is in talks to sign licensees in the Spanish and Italian markets for the first time.

A service signed with one of the largest Asia-facing online gaming operators will be launched by the end of the first quarter. It is understood a further licensee agreement with a separate Asian operator will be announced after approval from regulators.

Unusually for a software company, Playtech takes a percentage cut of licensee revenue. Yet analysts point out it faces price pressure from rivals, which include Microgaming, a privately owned counterpart of a similar size, and smaller developers such as CryptoLogic.

However, the company maintained it was “highly confident” of the new year.

Richard Carter, analyst at Numis, left his forecast for 2008 unchanged but said he may increase it between 10 and 15 per cent if “current trading momentum is maintained”.

He described Playtech as a “best in class operator” but noted its dependence on just 10 licensees.