Playtech Shares Dip Despite Revenue Growth --Update

(Rewrites, adding detail.)

By Simon Zekaria

LONDON--Playtech PLC (PTEC.LN) reported strong growth in quarterly revenue, but shares in the gaming software company dipped as investors weighed the favorable impact of currency effects on the firm's top line and pre-U.K. election jitters amid concerns about consumption tax, analysts said.

Revenue in the first quarter to the end of March climbed 31% year-over-year to GBP134.9 million ($204.3 million), with land-based revenue up 198%. Sports and casino revenue were up 31% and 28%, respectively. Revenue from regulated markets is now at 40%, up from 34% in the same quarter a year earlier, it said.

The company--a provider of software and services for the online, mobile, television and land-based gaming industry--added it is confident of "strong growth" this year, with average daily revenue for the first 25 days of the second quarter up over 25% annually.

"Playtech has seen a strong start to 2015," said Chief Executive Mor Weizer, adding that the firm remains very acquisitive.

Goodbody analyst Gavin Kelleher said the company's revenue performance was ahead of the broker's expectations, showing strong trading.

Still, at 0903 GMT, shares were down 0.9% at 833 pence. Northland Capital analyst Michael Campbell said revenue growth has accelerated since its full-year results, but currency factors have provided a favorable tailwind.

Playtech's revenue growth in the quarter on a constant currency basis and excluding acquisitions was 16% due to "significant" euro weakness.

Mr. Campbell also said investor uncertainty over the political outcome of next month's election in the U.K. is also weighing on the stock, with Isle of Man-headquartered Playtech in focus amid a wider concern over increased regulation across the British betting industry.

While gaming operators like bookmaker William Hill PLC (WMH.LN) are first in the line of fire from the U.K.'s point of consumption tax for the gaming industry, providers like Playtech, which is "primarily a technology company," also will be affected as the tax will be passed on through the industry, said Mr. Campbell. Playtech's license contracts with operators include William Hill and pay-TV giant Sky PLC (SKY.LN).

 
--Write to Simon Zekaria at [e-mail] 
 

Subscribe to WSJ: http://online.wsj.com?mod=djnwires