Playtech has suffered a setback in the performance of its TradeTech financials division that is forcing the igaming giant to “evaluate all options” for the business, the company stated in a trading update.
Playtech is also considering selling off some or all of its casual and social gaming business, the company stated, as it announced a long-term structured agreement with gaming brand Wplay for the Colombian market.
In a trading update for the period July 1 to October 31, Playtech revealed that a positive start to the year for TradeTech has been followed up by “highly challenging” months of September and October, with the expectation that full-year results will be “well below” management expectations.
In early trading in London, Playtech’s shares dropped by nearly seven per cent.
On the plus side, trading within core B2B gambling and Snaitech continue to exceed expectations. Regulated B2B gambling revenue for the first four months of H2 2019 was up 12 per cent on the same period in 2018 at constant currency and excluding acquisitions and up 13 per cent after excluding the impact of the increase in remote gaming duty in the UK. Asia, where Playtech has experienced difficulties, is expected to contribute around €115m in revenue this year.
Overall, adjusted EBITDA for the full year 2019 is now expected to be a little below current consensus.
Playtech stated: “As reported at the interim results in August, at the start of 2019 Playtech launched an extension to its offering to cater to over 1,000 brands and customers that previously Playtech did not have any presence with.
“This new model, driven by Playtech's centralised private cloud infrastructure, had a solid start in H1 and has gained further momentum in the second half of the year. The company now expects to launch 40 brands in 2019 as it accelerates its plans for this offering over the coming months.”
The partnership with Medellin-based Wplay adds to a previous deal in Latin America with Caliente in Mexico, which has grown to become one of Playtech's largest licensees.
The agreement will see Playtech migrate all Wplay's retail and online activity to its IMS player management platform. Playtech will exclusively power all software across Wplay's regulated verticals, including its sports and casino offering, with the addition of third-party games through Playtech's open platform, while also providing CRM and marketing expertise and personnel.
Mor Weizer, Playtech’s CEO, said: "As outlined at the interim results, our pipeline of new licensees is strong across all segments of our core B2B offering. This agreement demonstrates the execution of our strategy to continue to deliver structured agreements with the leading brands in the most attractive markets globally. Latin America remains a key market for us and with this long-term partnership with Wplay we have added another important strategic partner in the region.”
