Playtech’s share price has dropped dramatically, after its second profit warning this year
Playtech the maker of gambling software for clients like News UK, Ladbrokes and Paddy Power, issued a second profit warning yesterday for this year, causing its share price to drop dramatically as markets opened.
Blaming an “increasingly competitive backdrop” for the continued hit on its revenues in Asia, the company’s share price fell by 23 per cent yesterday morning, and reached a drop of 27.71 per cent in late afternoon trading.
The FTSE 250 company said in a trading statement that its expected revenue from Asia in 2018 would be €70m (£62m) lower than previously predicted.
New entrants into the Chinese market, coupled with the crackdown on gambling syndicates in Malaysia that prompted its first profit warning in November last year, are believed to be the culprits behind Playtech’s downfall.
According to Credit Suisse, approximately 40 per cent of Playtech’s revenues originate in Asia.
Meanwhile the company’s acquisition of Snaitech, in which it took a 70.6 per cent stake last month, has been supersized.
Playtech announced last week that it has subsequently bought up a further 10.8 per cent of the group’s issued share capital, and has launched a mandatory takeover offer for whichever shares it doesn’t already own.
The company's trading report expects adjusted earnings for 2018 to be between €320m and €360m, not taking into account the recent sale of its online gambling group GCV for €222m.