Online Gambling's Playtech Shares Drop

Published Tuesday, July 21, 2009 -

Playtech, the software developer, founded in 1999 just won a court case that resolved an action against them for alleged patent infringements. Based in the British Virgin Islands, with its head office located in the Isle of Man, it has found it's share price is dropping at the London Stock Exchange.

William Hill and Playtech joined forces last fall by launching the new online version of William Hill. After the announcement that the full-year trading did not meet market expectations for Paytech the shares in the company have dropped as much as 25%. Explanations by the firm range from, problems with merging the two companies taking extra time and the struggling trading conditions among some of its licensees during the downturn in this economy. Playtech contends that following a slow start, William Hill Online was now doing fairly well. Responding to the announced update of conditions at Playtech, William Hill said they are still optimistic about the forecasts for their new venture in 2009.

An analyst at Investec an investment bank, Matthew Gerard, commented, that William Hill's response implied a "simple case of estimate mismanagement from Playtech". He also said in the short term he was expecting a less than positive announcement because the integration process was harder to resolve than was anticipated. Gerard, concluded, "We take heart from the 'inline' guidance from William Hill." Expectations are that William Hill Online will actually turn a reasonable profit this year of approximately 86 million pounds, six million pounds over market estimates.

Playtech's house broker, Deutsche Bank, said it would now expect full-year earnings for 2009 before interest, tax depreciation and amortisation to be less than forecast before and had summarily cut its prediction by 22% from €124m to €96m. The same forecast for 2010 was reduced from €147m to €111m.

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