Playtech reports strong Q1 2024 quarter despite hurdles

Playtech has closed the books on its first quarter of the year, posting robust results and rekindling investor and shareholder confidence that the company is on track to achieve all strategic goals for the year, despite a yawning setback with Caliplay, one of the company’s major Latin American partners, who has been refusing to pay fees to the supplier.

Regardless, Playtech finds itself in a strong position following the update covering the period from January 1, 2024 to April 30, 2024. The company’s B2B unit has maintained steady growth in several key markets, among which are the Americas, but also across North America, and specifically Mexico and Colombia, which have been mentioned separately, and not aggregated with other geographies in the report.

Canada and the United States, along with the Americas, were top performers in company revenue over the surveyed period, with both Mexico and Colombia "continuing to do well" in the words of the operator. Playtech has also been supported by its B2C unit, Snaitech in Italy, which has been doing well and attracting a significant betting and gaming volume over the first quarter.

Snaitech added that it had enjoyed a strong uptake in betting operations across both its retail and online divisions. Playtech itself has commented on the market, arguing that Snaitech is in a very strong position to benefit from its business restructuring locally, and not fear any regulatory changes that may crimpmargins in the near future.

Yet, the most noteworthy item on the company’s docket remains its ongoing legal tug-of-war with Caliplay, a Mexican operator that is trying to back out of a contract with the supplier. At the end of November 2023, Caliplay owed €122m of fees to Playtech.

Regardless of this impasse, analyst Peel Hunt is fairly confident about the case settling favorably. Hunt’s money is on that Caliplay will honor payments and continue to pay Playtech throughout 2024 as well.

Playtech itself did not discard Playtech nor did it use particularly antagonistic terms to assail the company. "Caliplay remains a highly important customer and Playtech continues to maintain an open dialogue with Caliplay to discuss a path forward, although fees owed to Playtech remain uncollected," a comment shared during its annual general meeting.

Hunt has also upgraded Playtech’s stock rating to "buy," signalling investors that the company’s next months of business will be in an upswing. All the while, Playtech has been securing new and important partnerships, namely with Veikkaus in Finland and LeoVegas in the Netherlands.

Image credit: Playtech