Home Lottery Literacy Playtika Stops Strategic Evaluation, Begins Quarterly Dividend

Playtika Stops Strategic Evaluation, Begins Quarterly Dividend

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Playtika Stops Strategic Evaluation, Begins Quarterly Dividend

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Posted on: February 26, 2024, 11:40h. 

Final up to date on: February 26, 2024, 11:46h.

Shares of cellular video games developer Playtika (NASDAQ: PLTK) slid Monday after the corporate reported fourth-quarter earnings per share (EPS) that missed Wall Road estimates, and because the agency stated it’s halting a strategic overview.

Playtika
Playtika is highlighted on the Nasdaq market web site in January 2021. The corporate is pausing a strategic overview and initiating a quarterly dividend. (Picture: Nasdaq)

Within the remaining three months of 2023, Playtika earned 10 cents per share on income of $637.9 million. Analysts anticipated earnings of 17 cents per share on gross sales of $628.98 million. Almost two years to the day after the firm introduced a strategic review, which might have included a sale, Playtika paused that effort, citing “ongoing uncertainty in Israel and Ukraine.”

Playtika is predicated in Israel and has operations in Ukraine. Playtika was one of many first to supply free-to-play social video games on social networks and cellular gadgets, and has over 35 million month-to-month customers. Its well-known video games embrace Bingo Blitz, Caesars Slots, Slotomania, and World Collection of Poker (WSOP) Social.

With the strategic overview on maintain, the cellular video games creator is taking a unique strategy, telling buyers it would pursue mergers and acquisitions of its personal.

Playtika Capital Deployment Plans

Playtika concluded 2023 with $1.02 billion in money and money equivalents in comparison with a present market capitalization of $2.52 billion, indicating the inventory could also be undervalued following a 28% decline over the previous yr. The corporate’s free money move jumped to $436.4 million from $383.7 million in 2022, paving the way in which for opportunistic mergers and acquisitions and shareholder rewards.

Prior to now yr, we’ve honed our deal with effectivity and streamlined our operations, adapting to evolving trade dynamics in cellular gaming,” stated CEO Robert Antokol in a press release. “Now, with a strong basis, 2024 marks our shift in direction of reinvestment — pursuing M&A alternatives with a strategic intent of capital deployment.”

Playtika stated it would begin a quarterly dividend of 10 cents a share on April 5 to shareholders of document as of the shut of enterprise on March 22. The agency added it might take into account a share repurchase program sooner or later. Primarily based on the worth of the inventory at this writing, dividend yield can be 2.74%.

President and COO Craig Abrahams added the corporate will spend $600 million to $1.2 billion on mergers and acquisitions over the subsequent three years.

Playtika’s 2024 Outlook

The gaming firm’s tepid 2024 steerage could have additionally been a contributing issue within the inventory sliding on Monday. Playtika stated it expects 2024 gross sales of $2.52 billion to $2.62 billion on earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) of $730 million to $770 million.

“Capital expenditures anticipated to be between $110 million to $115 million, which incorporates $17 million in accrued capital expenditures from This fall FY2023 that can be paid in FY2024,” in line with the agency.

Within the fourth quarter, common each day paying customers rose 2.3% on a quarter-over-quarter foundation, however declined 2.2% yr over yr.

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