Playtech is a gambling software firm and it says that its biggest client, Caliplay, which is a Mexican gambling site has refused to pay for its services amid a long-running legal dispute.
According to Playtech, €122 million in fees from 2023 and 2024 are outstanding. It still included the figure in its revenue and profit as it said it was highly probably. Through the courts, it would be able to collect the money.
Playtech and Caliplay have engaged in a long-running legal battle as the Mexican firm sought to terminate its contract.
Last year’s profits incorporate the unpaid funds. It soared to €235.8 million as revenue grew to €1.7 billion.
CEO Mor Weizer said that they remain very confident in their ability to execute their strategy to continue delivering value for their shareholders.
The business has been subject of takeover speculation on both sides. While the firm reportedly made an attempt to buy William Hill owner 888 last 2023, its low share price relative to its earnings has made it a buyout target.
Weizer also told the Standard that Playtech was active in buying. He noted that dit had a large cash pile.
The director of research at Edison Group, Neil Shah said that Playtech’s FY2023 full-year results demonstrate good progress in its strategic and operational endeavors, with a 7% revenue increase to €1,706.7 million and a 9% rise in Adjusted EBITDA to €432.4 million. In both B2B and B2C divisions, it is driven by strong performances.
Nonetheless, challenges persist, notably the ongoing dispute with client Caliplay. Shah added that all eyes will be on Playtech in October when the case goes to trial and may result in a significant loss of revenue if Caliplay does not fulfill its payment obligations.
Jefferies analysts stated that the market’s share price indicates a potential overly pessimistic view regarding the Caliplay dispute. This is despite the probability of a negotiated resolution and continued relationship.
Today, Playtech shares experienced a slight increase to 477.6p.
There was no immediate response from Caliplay to a request for comment.
