Playtech scores points with Deutsche Bank analysts
News on 17 Jun 2009
News on 17 Jun 2009
The Online gambling software developer and provider Playtech plc received a resounding thumbs up from the respected Deutsche Bank business analysts this week, earning the accolade “best play on medium term growth in the online gaming sector” which will no doubt make it an attractive proposition for investors.
The rationale behind the recommendation revolves principally around the AIM-listed company’s recent deal giving it 29 percent of William Hill Online, but also takes into account the potential benefits to Europe and Asia facing businesses of the recent attempts by US authorities to curtail the activities of US-facing PokerStars and Full Tilt Poker .
In terms of the WHO deal, Playtech stands to benefit not only from its shares in the UK online gambling giant, but from the fact that its software will be used on the websites of one the largest online gambling operations on the Internet.
Deutsche Bank also notes “…regulatory opportunities and expanding markets as playing a significant part in Playtech’s future growth” such as the possible licensing and regulation of Internet gambling in the United States, currently being pursued in Congress by Masschusetts Representative and chairman of the House Financial Services Committee, Barney Frank.
Commenting that Playtech is not immune from the potential of economic difficulties among some of its licensees, the analysts nevertheless point out that the firm’s cash-generative business model and leading position in the industry should continue to drive growth by adding new licensees and cross-selling more products despite the recession.
Growth is likely to be more concentrated in the second half of 2009, the bank said, but looking further ahead it commented: “….the pipeline of new licensees and product developments leads us to be positive on the medium term trading outlook as well.”
It is likely that Playtech will seek a more senior listing than its current AIM status by moving up to the main London market at some stage over the next 6 to 12 months, the bank predicted.
