Playtech Announces Trading Update for the Second Quarter of 2006
Playtech, the international designer, developer and licensor of software for the gambling industry, today announces a trading update for the second quarter of 2006.
Highlights
• Total Revenues for the quarter increased by 133% compared to the same period last year and 22% on the previous quarter to $25.4 million
• Casino Revenues for the quarter increased by 121% compared to the same period last year and 21% on the previous quarter to $22.0 million
• Poker Revenues for the quarter increased by 701% compared to the same period last year and 30% on the previous quarter to $2.7 million
• As of 30 June 2006, Playtech had 42 active licensees operating a total of 137 game sites, representing an increase of eight new licensees and an addition of 34 new game sites compared to the same period last year and an increase of four new licenses and 22 new game sites on the previous quarter
• Significant progress made in new products and platforms development - Videobet, Mobile and Mahjong - enhancing Asian market appeal
• Percentage of player income from the USA continued to decrease – reduced to 48% from 58% over the same period last year and from 49% in the previous quarter
• Continuing focus on Asian and European markets. Asian revenues increased 17% during the second quarter compared to the first quarter of 2006 and European revenues increased by 33% over the same period
Commenting on today's trading update, Avigur Zmora, CEO of Playtech said: "Playtech has shown very strong growth over the past quarter. Both Casino and Poker revenues continue to grow and our policy of geographical diversification continues on track. It is also very encouraging to see the progress in our development pipeline. We look forward to the second half of the year with confidence."
For further information:
Avigur Zmora,
Chief Executive Officer, Playtech Ltd
c/o Bell Pottinger + 44 (0) 207 861 3232
Bell Pottinger
David Rydell/Peter Otero + 44 (0) 20 7861 3232
Second Quarter Trading Update
Playtech has continued to experience very strong trading in the second quarter across the Company, despite this period being a traditionally weak quarter in the online gaming industry. Revenues from Casino, Playtech's core product, continued to grow faster than the market owing to the high number of new licensees joining the company and the strong performance of existing licensees.
Poker revenues, currently 11% of total revenues, showed a significant increase over Q2 2005, clearly illustrating the effectiveness of the Company's effort to diverse its product offering. The poker network, iPoker, is gaining popularity and reached a peak of more than 11,000 concurrent players during the period.
Licensees
New licensees continue to be signed up, which, in line with the Company's strategy of geographical diversification, predominately cater for the Asian and European markets. Playtech also continues to work with its existing licensees to create unique branding and marketing options by adding new games and game sites.
During the second quarter the Company launched four new licensees, compared to two in the first quarter of 2006 and three in the second quarter of 2005. 22 new game sites were also added for both existing and new licensees in this quarter, compared to six in the first quarter of 2006 and 13 in the second quarter of 2005. The vast majority of Playtech's new licensees' pipeline caters for the Asian and European markets.
Geographical diversification
The Company continues to add high quality licensees from around the world with a focus on Europe and Asia. The percentage of players' income contribution attributable to non-US players has increased during the second quarter.
Management expects Asia to continue growing its percentage of total revenues starting in the fourth quarter helped by the release of specific games targeting Asian players and the launch of new licensees which have been postponed until after the World Cup.
Playtech continues to maintain its strategy of creating a more balanced geographical business portfolio. As a result over the past six months it has launched two licensees catering for Asia, three licensees catering for Europe and one licensee catering for North America.
Product and platform expansion
Playtech continues to develop products for specific markets worldwide.
Developments in the following products are of note in the second quarter.
•Videobet
Playtech has completed the development of its software for interactive video terminals and expects to install its software for the first machines during the third quarter. This marks the Company's first move into land based gaming markets and allows it to extend the expertise and game portfolio it has developed with its online casino products. It should be noted the Company does not intend to build or produce the terminals themselves at this stage, but to
focus on providing the software.
•Mobile
Playtech has launched its first real money mobile application as part of its unified platform, supporting five of its top 2006 online casino games. The management believe that there is significant potential for this application in a number of countries, most notably in Asia, and is working closely with its Asian licensees in preparation to launch a fully operative customize product for this market by the end of 2006.
•Mahjong
As part of its strategy to further penetrate the Asian market, Playtech has signed an agreement in the second quarter to license exclusive intellectual property rights to elements of the Mahjong game. Playtech believes that this new intellectual property will create a strong competitive edge over competing products in the region. The Company aims to launch the first phase of its Mahjong product by the end of 2006 and will make further announcements in due course.
Current trading
We enter the third quarter with confidence. Diversification of the product portfolio and international expansion remains a key element of the Company's strategy. Playtech is on the verge of launching a number of new client sites.
New country and region specific products are close to completion and we expect to announce the sign up of new licensees and expect the new products and platforms, including videobet, mobile, Mahjong, along with other Asian games, to start generating revenue by the end of the year.
Second Quarter Key Performance Indicators
Revenues
Three months ended 30 June 30 June Change 31 March Change
'000 ($) 2006 2005 2006
Total Revenues 25,411 10,898 133% 20,767 22%
Casino Revenues 22,141 9,955 122% 18,246 21%
Poker Revenues 2,723 340 701% 2,090 30%
Licensees and Game Sites
As of 30 June 30 June 31 March
2006 2005 2006
Number of Licensees 42 33 38
Number of Game Sites 137 103 115
Relative Share of Geographical Diversity(1)
Three months ended 30 June 30 June 31 March
2006 2005 2006
North America - USA 48% 58% 49%
North America - Canada 4% 4% 4%
Europe 26% 22% 24%
Asia Pacific 20% 13% 21%
Rest of the World 2% 3% 2%
Nominal Growth in Geographical Regions
Period Q2 2005 to Q2 2006 Q1 to Q2 2006
North America - USA 93% 20%
North America - Canada 133% 22%
Europe 176% 33%
Asia Pacific 259% 17%
Rest of the World 55% 22%
First Half Key Performance Indicators
Revenues
Six months ended 30 June 30 June Change
'000 ($) 2006 2005
Total Revenues 46,178 19,300 139%
Casino Revenues 40,387 17,631 129%
Poker Revenues 4,813 506 851%
Relative Share of Geographical Diversity(1)
Six months ended June 30 June 30
2006 2005
North America - USA 49% 62%
North America - Canada 4% 4%
Europe 25% 20%
Asia Pacific 20% 11%
Rest of the World 2% 3%
Nominal Growth in Geographical Regions
Period H1 2005 to H1 2006
North America - USA 89%
North America - Canada 139%
Europe 199%
Asia Pacific 335%
Rest of the World 60%
(1) The relative share is calculated as the total players income derived from the specific region divided by the total income from all regions
About Playtech
Playtech develops unified software platforms for the online gambling industry, primarily targeting existing online operators wanting to upgrade their system; sportsbooks looking to diversify and land-based operators making their online debut. Playtech gaming applications — online casino, poker, bingo, live gaming, land-based kiosk networks and fixed-odds games — are fully intercompatible and can be freely incorporated as stand-alone applications, accessed and funded by players through the same user account and managed by the operator by means of a single powerful management interface. Founded in 1999, Playtech has over 250 personnel distributed globally, around eighty percent of whom are engaged in research and development of current and future gaming technologies.
www.playtech.com
