Playtech, online gambling software provider, lost a quarter of its market value on Tuesday following a surprise profit warning.

The group, one of the biggest companies quoted on Aim, warned that 2009 earnings would fall below market expectations because of integration problems at William Hill Online (WHO), its joint venture with the bookmaker, as well as difficult market conditions.

The news come just two months after Playtech issued an upbeat quarterly trading statement in which it said the joint venture “was performing well and in line with [its] expectations.” Tuesday’s news prompted shares in the group to fall 25 per cent to 340p.

Asked to comment on the disparity, a spokesperson for Playtech said the revised projections were based on new numbers supplied to them by William Hill in May and June.

Last year Playtech, which is majority owned by Teddy Sagi, the Israeli entrepreneur, bought a series of gaming assets, businesses and contracts and sold them for $250m to William Hill to create WHO in return for a 29 per cent stake in the business.

William Hill hoped that the deal would transform the company, which operates 2,300 traditional bricks-and-motar betting shops, into Europe’s leading online gaming and sports betting business.

On Tuesday, the bookmaker said that, while the online business has had an extensive integration period and is experiencing difficult trading conditions, it remained “comfortable” with market forecasts for the division.

Matthew Gerard, analyst at Investec Securities, said William Hill’s response suggests that it is a simple case of estimate mismanagement from Playtech.

”Whilst there have clearly been teething issues at the joint venture, we regard these as temporary,” he said.

The view was echoed by Wyn Ellis at Numis Securities, who said he remained comfortable with the long-term prospects for WHO.

“We had increasingly expected more downbeat newsflow in the near term as the integration has clearly been more difficult than management had expected, but we take heart from the in-line guidance from William Hill,” he said.

Analysts had expected Playtech to report adjusted earnings before interest, tax, depreciation and amortisation of around €55m for the first half for the year. Playtech said it now expects the figure to be between €43m and €45m

Its share of WHO profit for the first quarter has been revised from €7.8m to €5.6m.

Shares in William Hill fell 8¼p to 192p. The group will provide a full update on the operating performance of WHO for the 26 weeks ended 30 June 2009 on August 4.

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