William Hill/Playtech JV issues decreased profit forecast

In October last year William Hill gave up on building and running its own on line business and instead signed an agreement with software provider Playtech. Playtech who own 30% of the joint venture declared in a quarterly update that it expected full year trading to be below current market forecasts blaming slower than expected integration of the two. In an effort to reassure investors  William Hill said it was still “comfortable with the market consensus for the online business in 2009”. Playtech did add that the business was making encouraging progress and restated its belief in the medium to long term growth potential of William Hill Online (WHO). This did not stop the shares of Playtech that once traded at 550 pence falling 109 pence to 343 pence and William Hill fell 8.5 pence to 191.75p.

Interestingly enough, Playtechs share of the WHO profits for the second quarter came in at 6.1 Euro and helped the company record a 23.3% growth in gross income for the quarter.

 Under the agreement William Hill placed its existing online assets into the venture with Playtech contributing £145 million of affiliate business. The joint venture (WHO) agreed to use Playtech software for its Poker and Casino games for at least 5 years and William Hill have a clause by which they can buy out Playtechs holding in 4 or 6 years.