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UPDATE 2-Playtech profit up, buys softare businesses

Published 03/10/2011, 05:20 AM

* Year EBITDA 103 million euros, vs 93 million forecast

* Buys PT Turnkey Services for 140 million euros

* Move to main market blocked by UKLA

* Shares down 3.5 percent

(Adds company, analyst comment, shares, details)

By Rhys Jones

LONDON, March 10 (Reuters) - Playtech, the world's biggest provider of online gaming software, posted a 10 percent rise in 2010 profit and said it had acquired a group of software services businesses to drive its growth in regulated markets.

Estonia-based Playtech on Thursday reported adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 103 million euros ($143 million) for 2010, helped by last year's soccer World Cup, new license deals with Betfair and Unibet and acquisitions.

The average forecast for EBITDA had stood at 93 million euros according to a Thomson Reuters I/B/E/S poll.

Playtech also said it had agreed to buy PT Turnkey Services for an initial 140 million euros ($194 million) in cash from Worldwide Online Enterprises to help it take advantage of market regulation.

"This is a transformational deal for us -- the businesses we have acquired will give us a platform to grow in regulated and soon to be regulated markets, given the fact that new entrants to freshly regulated markets lack the required capabilities," Mor Weizer, Playtech's Chief Executive said in an interview.

The acquisition will be earnings accretive in 2011 and add at least 13 percent to Playtech's 2012 earnings, it said.

The company sees the opening up of markets as a driver of growth in the poker business, and recently said it had seen an eight-fold increase in activity in Italy since regulation in 2008.

Analysts see regulation as a key issue that will impact the future growth potential of the online gaming industry.

MARKET MOVE SCUPPERED

Playtech, one of the largest companies by market capitalisation on London's junior AIM market, also said its plans to move to the main market had been scuppered.

The group said the UK Listing Authority (UKLA) had deemed it to be currently ineligible for a premium listing on the London Stock Exchange because it did not have the required three-year track record for at least 75 percent of its earnings.

Shares in Playtech, which have fallen 13 percent so far this year, were 3.5 percent down at 355.3 pence by 0950 GMT, valuing the company at around 890 million pounds.

"We thought we would get in because it's only 28 percent, rather than 25 percent, but the rules are very strict and they (UKLA) won't allow us to do it," said Weizer.

"This originates from the success of our online joint venture with William Hill, which was formed in 2009, so they have a two year track record. We will make the move next year."

Panmure analyst Simon French said the UKLA's decision was disappointing for Playtech but added that he was confident the company would move to the full-list in 2012.

Playtech, whose 2010 revenues grew 24 percent to 142.3 million euros, said it would pay a dividend of 19 euro cents for 2010, 4 percent up on last year.

It added that revenue growth in the first nine weeks of 2011 was up more than 8 percent on the same period last year. ($1=.7208 Euro) (Editing by Julie Crust and Jon Loades-Carter)

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