- Adjusted profit upgrade after strong trading
- Renewed Caliplay contract
- Dispute resolved
Gambling technology company Playtech (PTEC) jumped 11% to a two-and-a-half year high after flagging adjusted full year profit will be slightly ahead of market expectations and signing a deal for a 30.8% stake in Mexican sports betting firm Caliente.
The shares have surged nearly 60% so far in 2024, making them one of the best performers in the mid-cap FTSE 250 index.
The profit upgrade reflects strong first half trading in the B2B (business-to-business) division driven by a combination of revenue growth in the Americas and tight cost control.
The company also noted good strategic progress in the US and Canada which delivered strong growth from a low base. The firm’s business to-consumer division Snaitech continues to see good growth against tough prior year comparisons while suffering customer friendly results in Italy.
Management confirmed ongoing discussions with sports betting firm Flutter Entertainment (FLTR) over the possible sale of Snaitech.
REVISED MEXICAN AGREEMENT
Playtech said it has reached agreement on the terms of its strategic agreement with Caliplay, a subsidiary of Mexican betting company Caliente, resulting in Playtech holding a 30.8% equity interest.
The company said Caliplay has resumed paying software and license fees and repaid more than €150 million of unpaid fees due to the group, representing more than 80% of the total due.
The revised arrangements are conditional upon Mexican antitrust approval and closing of the deal which is expected in the first quarter of 2025.
CEO Mor Weizer said: ‘During the past nine years, we have worked closely with Caliplay to create a successful and rapidly growing digital business in Mexico.
‘The revised arrangements mark the beginning of an exciting new chapter that will build on the impressive progress to date, with a view to driving significant further growth for Cali Interactive in the future.
‘The agreement with Caliente and Caliplay underlines the attractiveness of Playtech's leading proprietary technology. With a strong position in Mexico and exposure to other fast-growing markets in the Americas and Europe, we remain well-placed to deliver strong growth in our B2B business in the coming years.’
