Playtech has signed a memorandum of understanding with U.K. gaming operator Gala Coral to supply a technology platform and a broad range of products.
The announcement was made by Playtech Chairman Roger Withers to shareholders at the May 25 general meeting, reports Israeli news site Globes.
“Whilst we don’t normally comment on MoUs, we are excited by having the chance to partner with another of the U.K.’s leading gaming operators,” said Withers. “If a formal agreement is concluded, this new licensee could deliver significant revenues once it migrates onto our platform over the following 12-18 months.”
For Gala Coral, the deal is seen as a plus by analysts. A week before Withers’ announcement, GamblingCompliance quoted Daniel Stewart analyst Michael Campbell as saying, “Coral’s online business has been struggling of late, and the agreement to migrate all of its online offering across to the Playtech platform would not only be a positive move for Coral, but in our view further boosts Playtech’s position in the U.K. market and reiterates its position as the premium B2B provider in the market.”
Withers also told shareholders the conversion of over 21,000 FOBT machines to Videobet software, in partnership with Scientific Games subsidiary Global Draw, is almost complete. Videobet is Playtech’s server-based gaming arm.
Withers said of the FOBT project, “This gives us the leading position in the U.K. market and an excellent platform for future growth.”
Playtech also announced a buy-back of up to 10 percent of its shares on the open market. The board believes the current price does not reflect the shares’ underlying value.
The buy-back of 24,265,448 shares at the current price would cost over ?81 million—about $132 million. Playtech had $92 million in cash and cash equivalents at the end of March.
Playtech shares have fallen 21 percent in price since the beginning of 2011 and 24 percent over the last 12 months.