Playtech rises after lifts forecasts again
LONDON (Reuters) - Gambling technology company Playtech said it was confident it would beat current market forecasts for the year, a second upgrade in only two months boosting its shares.
Playtech, which provides software used in sports betting and online casino and poker games, said on Wednesday revenue soared 29 percent in the third quarter.
It had made a strong start to the fourth quarter, with average daily revenues for the first part of the period up 22 percent compared to last year.
The company's software was used in new sport betting products launched in Italy during the third quarter. European deals accounted for 56 percent of revenue and Asia accounting for 36 percent of sales, up from 25 percent this time last year.
Shares in the company gained 8 percent to 759 pence, at 0825 GMT on Wednesday, their highest level since February, on the positive outlook. The company, in which Israeli businessman Teddy Sagi is the largest shareholder, now has a market capitalisation of more than 2 billion pounds ($3.2 billion).
"Asia is once again a key driver but Europe also delivered double digit growth and all verticals saw positive progress. With 400 million euros of net cash the opportunities to increase shareholder value are significant," said Peel Hunt analyst Nick Batram, who rates the company a "buy".
Playtech also said in August that profit was likely to come in ahead of expectations. The stock has soared 20 percent in the last three months, outperforming Britain's midcap index which has lost about 3 percent.
Numis analyst Ivor Jones, with a "hold" rating on Playtech, said he was increasing his core earnings (EBITDA) forecast by 8 percent to 210 million euros, but raised questions about the company's ability to maintain its pace of growth.
"Our concerns over the drivers of growth are partially offset by the potential for upside from the reinvestment of the cash pile," he said.
Analysts currently expected Playtech to report core earnings for 2014 of 189 million euros, according to Thomson Reuters data.
(1 US dollar = 0.6223 British pound)
(Reporting by Sarah Young, Editing by Paul Sandle)
