Gambling software firm Playtech says its biggest client, Mexican gambling site Caliplay, has refused to pay for its services amid a long-running legal dispute.
Playtech says that €122 million in fees from 2023 and 2024 are outstanding. Playtech still included the figure in its revenue and profit as it said it was “highly probable” it would be able to collect the money through the courts.
Caliplay and Playtech have been involved in a long-running legal battle as the Mexican firm aimed to get out of its contract.
Profits for 2023, which include the money that wasn’t paid, soared to €235.8 million as revenue grew to €1.7 billion.
CEO Mor Weizer said: “We remain very confident in our ability to execute our strategy and to continue delivering value for our shareholders."
The business has been subject of takeover speculation on both sides. Its low share price relative to its earnings has made it a buyout target, while the firm reportedly made an attempt to buy William Hill owner 888 late last year.
Boss Mor Weizer told the Standard that Playtech was “active” in buying, and note dit had a large cash pile.
Neil Shah, director of research at Edison Group, said: ““Playtech’s FY2023 full-year results demonstrate good progress in its strategic and operational endeavours, with a 7% revenue increase to €1,706.7 million and a 9% rise in Adjusted EBITDA to €432.3 million, driven by strong performances in both B2B and B2C divisions.
“However, challenges persist, notably the ongoing dispute with client Caliplay,
He added: “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 fulfil its payment obligations.”
Analysts at Jefferies said the share price suggests the market may be overly pessimistic about the Caliplay dispute, “despite the likelihood of a negotiated outcome and ongoing relationship”.
Playtech shares were up a little today to 477.6p.
Caliplay did not immediately respond to a request for comment.
