July 2, 2018 / 8:40 AM / a year ago

Playtech warns on revenue; shares plunge

(Reuters) - Playtech Plc’s shares slumped nearly 27 percent on Monday after the British gambling technology company warned that its full-year revenue would be hurt by a highly competitive market in Asia.

Shares of the company fell to 552 pence, lowest in more than four years, on the London Stock Exchange.

Playtech said pricing environment in Asia in the first half ended June 30 had been particularly aggressive due to newer players.

“Given the recent decline and in the absence of any change in market dynamics, we expect a significant impact on revenue throughout the rest of the year,” the company said.

Investec analysts said they estimated a more than 25 percent drop in Playtech’s first-half average daily revenue in Asia. Playtech did not provide a breakup of its Asian business.

The Isle of Man-based company warned if the current run rate in Asia continued for the rest of 2018, revenue from Asia would be about 70 million euros (61.79 million pounds) lower than its prior expectations.

“Clearly the recent trading performance in Asia is disappointing,” Playtech Chief Executive Officer Mor Weizer said.

However, the company said the overall performance for the first six months was broadly in line with its expectations.

Playtech, which makes software that powers thousands of fixed-odds betting terminals across UK, posted a 7 percent rise in year-to-date average daily revenue in its B2B gaming business, excluding Asia, on constant currencies.

The company forecast adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) to be between 320 million and 360 million euros for the current year. Playtech reported an adjusted EBITDA of 322.1 million euros in 2017.

In a move to reduce its exposure to regulated markets, Playtech said in April it would buy a 70.6 percent stake in Italian betting and gaming firm Snaitech for 291 million euros.

The Snaitech deal came after Playtech issued a profit warning in November, saying earnings would be impacted by a crackdown on gambling syndicates in Malaysia, one of its largest Asian markets.

Reporting by Muvija M in Bengaluru; Editing by Amrutha Gayathri

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