Playtech confident of meeting market consensus, analysts agree

7th Nov 2014 10:09

Following the close of trading on Thursday gaming software developer Playtech said that it remains confident of meeting the "latest market consensus" for 2014 and beyond, regardless of the potential impact of any changes in the Malaysian market.The statement from the company was in reaction to the sharp drop in the company's share price, which had sent it to the bottom of the pile on the FTSE 250 by the end of trading.Regulatory concerns have been building in recent weeks after the Malaysian Attorney General proposed new/revised laws next year to tackle illegal gambling.The company is right, analyst says Broker Cannacord Genuity was of a similar view to the company. In a research note issued on Friday morning analyst Simon Davies said that "any legislation introduced in Malaysia would not be implemented much before 2016, when we would expect the exposure to be modest."Davies added, "looks to us like a material over-reaction."Although there is now increased focus on the risks accruing to those firms operating in unregulated markets - Playtech derives roughly 35% of its revenues from mostly unregulated Asian markets - it is a business-to-business (B2B) outfit, with market leading technology and a €440m war chest for acquisitions, the analyst went on to explain.The Canadian broker reiterated its 'buy' recommendation and 840p target price.