Shares digital

Gaming software developer Playtech (PTEC:AIM) will beat profit forecasts following a surge in sales late last year, the company says. Monthly revenues hit record highs towards the end of 2007, as it enjoys strong demand from the online, mobile and traditional gaming sectors.

House broker Collins Stewart has maintained its full-year profit forecasts. However, it warned that Playtech’s stake in Hong Kong-listed Foundation will show a $16 million accounting loss due to a downward revaluation to the year-end price – this is despite the investment currently showing an $8.7 million gain since acquisition.

The company has recently signed contracts with gaming groups Mansion and Bet365, and expanded its position in Asia through partnership deals. Stockbroker Numis says Playtech has an ‘attractive’ valuation, trading on a PE of 18.7 to December. ‘It undervalues the group’s technology platform, increasing geographic diversity and future growth prospects via new product launches and customer wins,’ says Numis analyst Richard Carter.

Shares says: The stock is pricey but worth buying as a momentum play.

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by: Dan Coatsworth