Playtech Says To Top Forecasts With New Games

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SOURCE: Reuters

(London, England) — Gambling software specialist Playtech (PTEC.L: Quote, Profile , Research) said next year's profits would beat analysts' forecasts as new markets, technology and games help it recover from the United States' decision to effectively ban online gambling.

The UK-listed firm, which provides gambling Web sites with games, posted a poker-driven 14 percent quarter-on-quarter rise in revenue on Thursday although year-on-year revenue fell 5 percent after the U.S. announcement in October.

Since the U.S. move Playtech has been rebuilding, enticing more Europeans to play its poker games, developing new games tailored for Asian gamblers and working on computer-linked machines for bricks and mortar casinos.

Avigur Zmora, Playtech's head of business development, said the work the company was doing now would lead to higher profits next year than analysts' have forecast.

"The upgrade in the numbers will probably be in the 2008 numbers. As far as 2007 it's in-line with our expectations the numbers that are out there seems to be o.k."

On average 3 analysts polled by Reuters Estimated expect the firm to post 2007 pretax profit of $69.2 million and $88.7 million in 2008.

Arbuthnot analyst Paul Leyland said this year's profit could even be marginally better. "It's pretty much in-line I think with a small upgrade coming through for the full year.

"There's very strong poker growth. Casino was pretty much in-line although held back by Asia although that seems to be being sorted out," he added.

Shares in the firm were little changed by 1138 GMT at about 370 pence valuing the business at around 807 million pounds ($1.61 billion).

Its shares have risen more than 50 percent since President George Bush signed the legislation in October outlawing gaming financial transactions in the United States, the world's biggest gambling market.

The move hammered the stocks of online gaming companies, but Playtech has fared better than others as it moved quickly into new markets and made the most of the technological appeal of its software.

Playtech said it expected its Asia revenues to rebound as one of its big Asian customers relaunches its websites.

"We believe we will see the numbers growing again, we will have new Asian games and will see significant growth in the numbers coming out of Asia 2008," Chief Executive Mor Weizer told Reuters.

"We have one major licensee which has restructured. We expect him to finalise the restructuring process in the coming months," he added.

The company also sees other opportunities as European and Asian governments, including Macau, Italy, Spain and Russia, loosen gambling regulations.

"Recent changes across various regulated  markets are creating significant business opportunities," said Weizer.