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Solid increases in revenues crafted by expansions into Europe and Asia
Online gambling turnkey provider and software developer Playtech turned in an impressive set of results this week, almost doubling pre-tax profit numbers.
The companys full year results saw an annual rise in total revenues of 89 percent to US$90 million (2005: US$47.6m). Pre-tax profit rose to $60.8 million for the year ended 31 December from $35.7m in 2005.
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Breaking the numbers down, online casino revenues increased 81 percent to US$77.2 million (2005: US$42.7m), and Internet poker revenues rose a remarkable 309 percent to US$10.9 million (2005: US$2.7m).
Excluding US contributions, annual revenues increased 143 percent to US$55.6 million (2005: US$22.8m).
The report hails expansion in Asia and eastern Europe as an important contributor to the bottom line. The group offset losses in the USA, where its online gambling operations were shut down timeously with the advent of new anti-online gambling legislation, and efforts and resources were focused on new markets such as Asia.
Playtech also added new products to entice new customers.
"The group's broad international portfolio of clients, especially in Asia and Europe, meant that the impact of the prompt withdrawal by its licensees from the US market was greatly reduced," it said.
"We look forward into 2007 with great enthusiasm and expect it to be a year of further growth,'' said chief executive officer Avigur Zmora in a statement.
Following the announcement of the results, Playtech shares fell, with analysts speculating that the mrket was disappointed that the company had not provided more news on an Asian software deal that sources said earlier this month it was close to clinching.
"We're still negotiating the deal," Chief Executive Avigur Zmora told Reuters.
With its shares now worth 30 percent more than before the US ban on Internet gambling financial transactions disrupted the industry, Playtech is now valued at around GBP680 million.
Zmora claimed that Playtech is one year ahead of rivals in building computer gaming for traditional casinos, known as server based gaming. "I think the world recognises this is the future for land-based gaming," he told Reuters. "Where regulations allow, it will take over. It can generate much more revenues and is more robust."
He said that Playtech had arrived at the right time to take advantage of a worldwide explosion in casino building.
"Singapore is on its way to land based casinos, Japan is exploring the opportunity, and Italy will double its number of slot machines," he said. "We have a one year window ahead of the traditional giants, who are still in R&D."
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