Playtech Share Price Drops 20 Percent Following Profit Warning
Playtech’s share price has fallen more than 20 percent on Thursday following a warning issued by the gambling technology provider.
Playtech said that it has suffered a negative impact from recent changing market conditions on certain parts of Asia. They went on to say that while the immediate short- term results in Asia are excepted to be lower for 2017, activity at its Asian- facing licenses “ would return to normalized levels in relatively short time frame.”
Educated speculation is that a major part of the falling revenues is from their Malaysian gambling operators as the Malaysian Authorities declared their intention to eradicate illegal gambling and are focusing heavily on online gambling.
In addition Playtech have described their ongoing struggles with Sun Bingo and referring to their contract with the UK Facing company as challenging due to “ lengthier seasonality and the relaunch of the new Sun Bingo site. These problems along with the Asian issues will mean that Playtech expects its FY17 performance to come in at around 5% below the bottom end of market expectations.
In a trading update Playtech said, “Playtech will continue its strategy of focusing on both organic and inorganic revenue growth in regulated and to-be-regulated markets. The M&A pipeline remains very strong and the company is in active discussions with a range of gaming businesses consistent with executing this strategy and with the expectation that the relative contribution from Asia to the group will consistently reduce over time.”