Playtech set to issue ‘beast of a dividend’ following Snaitech sale
Gambling software firm Playtech is set to issue what analysts have described as a “beast of a dividend” later this year, as the sale of Snaitech reaches close to completion.
Playtech agreed the sale of its Italian arm Snaitech to Flutter during last year for €2.3bn (£1.92bn), distributing most of the proceeds from the sale as a dividend.
It intends to return €1.7bn to €1.8bn as a dividend next quarter, which Peel Hunt noted was about two thirds of its current market capitalisation.
In its annual results today, Playtech also managed to beat expectations, with group adjusted operating profit at €480m, compared to the €474m expected by analysts.
Meanwhile, adjusted operating profit for the business excluding Snaitech was €214.7m, compared to €200m expected by analysts.
The firm’s core business-to-business arm reported full-year revenue to €754m, up 10 per cent from the previous year.
Expansion in the US was particularly strong, with revenue jumping 19 per cent to €252m.
Looking ahead, the firm set new targets for 2025, with an adjusted operating profit target of €250m to €300m, along with a new free cash flow target of €70m to €100m.
“The forecast beat is positive and Playtech is a step closer to transformational change,” said Peel Hunt analysts Ivor Jones and Douglas Jack.
As well as Snaitech, Playtech has stakes in multiple other businesses, such as an €802m stake in Caliente (up from €730m last year) and a €141m stake in Hard Rock Digital (up from €77m last year)
“The combined balance sheet value of these two interests alone is more than the implied post-Snaitech market capitalisation,” noted Jones and Jack.
“We are pleased to have secured a revised strategic agreement with Caliplay, our partner in Mexico, providing greater certainty and a strong foundation for future growth,” said Playtech CEO Mor Weizer.