Interesting updates from Playtech (PTEC) – on which I concluded a couple of months that I was ‘still holding onto my profitable position’ in the gambling software development company. So what did the Playtech management say across two updates?
In the first one the company notes that ‘Playtech plc is pleased to announce that it has entered into an agreement for the sale of its financial trading division’ for $210 million (although a minority of this will be only be paid two years after the completion). This is all apparently equivalent to a multiple that is ‘23x trailing twelve month period ending 30 April 2021 and 3x FY2020 Adjusted EBITDA’. Certainly it is a reasonable time to move on from this business, as it makes much more sense to me for Playetch to ‘focus on its technology led offering in B2B and B2C gambling’ as I discussed at the article linked to above. Still, it will also help at least halve the company’s net debt/adjusted EBITDA of 1.7x.
So how about the rest of the business? Well Playtech observed that ‘online growth has remained very strong in 2021 in both B2B and Snaitech...this strength in B2B has led to Playtech as at the end of April, being ahead of its Adjusted EBITDA expectations at the start of the year’. So a bit of positive progress there, though the company may talk about being convinced ‘that the simplified Group and the exciting growth opportunities ahead will deliver significant value to shareholders’, but there is still much to do.
Overall I retain my holding which I first purchased about eighteen months ago and added to last year. As discussed a couple of months ago, Playtech is a little bit different from other mentioned broad sector names such as Entain (ENT) which I have significantly top-sliced a couple of times. I still hope that Playtech shares have the scope to return to around the six quid level again. On this basis it remains a strong hold for me and it is good to see the share pushing closer to a 460p share price level today.
Filed under: Playtech, Bidstack, Inspirit Energy, URU Metals, Iofina, Aviva, Chris Bailey
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