Playtech has warned that a sudden downturn in Asia could lead to igaming revenues €70m below expectations for the second half of this year.
The supplier, which issued a profit warning in November, has particularly suffered in Malaysia where the government has imposed a crackdown on online gaming.
In a trading update, Playtech stated that group performance in the first half of this year was broadly in line with expectations. Increased activity due to the FIFA World Cup and a strong position in Italy provides encouragement and excluding Asia, average daily revenue for the year to date is up seven per cent on last year, with a 12 per cent year-on-year rise in Q2.
But difficulties within Asia, including what it describes as a “particularly aggressive pricing environment from new entrants”, look set to cause a headache for the rest of this year.
Following the update, London-listed Playtech’s shares tumbled 23.40 per cent to 576.80p this morning.
Mor Weizer, Playtech’s CEO, said: "Clearly the recent trading performance in Asia is disappointing. We have taken steps to further support our partners in the region and we will continue to work to preserve our position in the face of an increasingly competitive environment.”
After initially paying €846m for a 70.6 per cent stake in Italian igaming company Snaitech, Playtech has had its mandatory takeover offer approved by the regulatior. Consolidating Snaitech will contribute around €80m of adjusted EBITDA to Playtech's group forecasts for 2018, based on Snaitech's current market consensus.
Overall, Playtech now expects group adjusted EBITDA for 2018 in the range of €320m to €360m, excluding the €42m one-off gain relating to the sale of shares in Ladbrokes and GVC.
"In line with our stated strategy, progress in fast-growing, regulated and soon to-be-regulated markets continues apace,” Weizer said. “Momentum in key regulated markets continued in the first part of 2018 with new agreements with Gala Leisure in the UK, SAS in Portugal and Totalizator, the Polish national lottery. Additionally, regulatory developments in the US represent a significant opportunity for the Group. The organic growth reported in the non-Asian B2B gaming business combined with the recent acquisition of Snaitech in Italy provides management with confidence that this strategy will materially improve the quality and diversification of Playtech's performance in 2018 and beyond."
