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I am very pleased to report Playtech’s financial results for the year ended 31 December 2008. Now in its third year as a listed entity, Playtech continues to outperform its competition.
The Group has delivered significant growth across all divisions, generating record revenues and profits for shareholders.
In the course of the year Playtech’s management has continued to deliver upon its goal to enhance the Group’s position as the world’s leading software provider to the gaming industry. Management has relentlessly focused on being responsive to customer needs and investing in research and development that will provide new and exciting high quality products for its licensees.
Playtech’s market leading position has been strengthened by the addition of 15 new licensees coupled with strong organic growth from its existing customer base, further demonstrating the success of Playtech’s strategy to migrate licensees from competitors, target new and existing operators in newly created and lucrative regulated markets and diversify geographically.
Winner of the non-executive Director awards
Roger Withers was named as AiM
Non-Executive Chairman of the Year 2009.
Total revenues for the year rose by 70% to €111.5 million (2007: €65.7million), whilst net profit rose 55% to €40.7 million (2007: €26.3). Adjusted net profit* rose by 79% to €78.6 million, (2007: €43.9 million) representing a margin of 70% of total revenues. The Board recommends the payment of a final dividend of 7.6 € cents per share which is payable, subject to shareholder approval, on 15 May 2009 to all shareholders on the register at 3 April 2009. This follows the interim dividend payment of 7.6 € cents per share (12 US cents) announced in September 2008 making a total dividend of 15.2 € cents per share. The overall dividend reflects the Board’s confidence in the Group’s business and prospects.
Playtech’s Board and management took great comfort from the positive response investors demonstrated to the Group’s placement of new ordinary shares in June 2008 raising £112 million before expenses (€141 million) and underlining confidence in the Group’s ability to deliver high quality sustainable growth. Given the state of financial markets at the time of the placement, this was an impressive achievement and clearly demonstrated Playtech’s value proposition. At the time of fundraising the Company earmarked the proceeds for future acquisitions. The Company subsequently utilised the proceeds of the fundraising to undertake its transaction with William Hill Online, which involved Playtech’s acquisition of certain online gaming marketing assets, businesses and contracts from affiliates and other third parties for a total consideration of US$250 million (€177.7 million) in cash and the immediate injection of those assets in return for a 29% interest in William Hill Online.
As well as the William Hill transaction the other major business development of 2008 was Playtech’s entry into the newly regulated Italian market. Four of the Group’s 15 new licensees were derived from this major development. Regulated markets remain an important target for Playtech’s expansionary ambitions in 2009 and we anticipate a continuing trend of operational start-up in new jurisdictions.
Playtech has continued to work closely with its partner customers to develop and launch new products tailored to particular markets. The Group constantly seeks to improve the products on offer to licensees; accordingly, a dedicated new games software development unit has been established which will significantly increase the number of games released to our licensees.
I would like to thank my colleagues on the Board and every employee within Playtech for the outstanding contribution they have made to another successful year. In December 2008 Avigur Zmora resigned from his position as non-executive director of the Company, having steered through the final stages of the William Hill transaction. Avigur’s contribution to Playtech’s success is well known and appreciated and Avigur will continue to provide consultancy services to the Board on strategic matters. I would also like to thank former Finance Director Guy Emodi for his contribution to the Group throughout the year and to express my appreciation to Shuki Barak who has taken on the role of Interim Chief Financial Officer.
We are all aware of current global economic conditions and no industry is escaping the effects of the slowdown. Notwithstanding this the Group’s market leading position as a software provider and its diversified business model should ensure that it should continue to deliver in terms of its financial performance.
To conclude, Playtech has enjoyed an excellent year of progress. We will continue to follow our successful strategy of organic and acquisitive growth as we take full advantage of the opportunities that lie ahead. There are new geographic markets to break into, new products to launch, new licensees to migrate and, if appropriate, acquisitions to make. As a result, the Board is highly confident of its prospects for 2009 and beyond.
* Adjusted EBITA and adjusted net profit are calculated after adding back certain items in relation to the investments in CY Foundation Group Limited, AsianLogic Limited, Tribeca and the exchange loss relating to the investment in William Hill Online which are not part of the Group’s core business and the employee stock option plan.