Saturday, December 26, 2009

Partygaming Sees 2009 Core Earnings Slightly Ahead - 19th December 2009

Online gaming group Partygaming PLC said Friday it expects its 'clean' full-year earnings before interest, tax, depreciation and amortization, or Ebitda, to be slightly ahead of the company's expectations amid solid current trading.

'Clean' Ebitda is the company's preferred measure of profitability and excludes one-off, non-recurring and non-cash items.

In a statement ahead of the company's Dec. 31 year-end, Partygaming said it sees revenue for the full year in line with expectations.

Jim Ryan, Chief Executive, said in a statement that, "as indicated at the time of our third quarter key performance indicators, our business has continued to perform well across the board during the fourth quarter with a return to net revenue growth across all four of our key product verticals."

PartyGaming, the world's biggest listed-online gaming group by market capitalization, derives most of its revenue from online poker and casino games and has a smaller sports book and bingo business.

Poker has been under particular pressure amid a very competitive online gambling market and the company has increased the bonuses paid and expanded its loyalty program to encourage customers onto the site and retain them as well.

CEO Ryan added: "We are pleased to see that the initiatives introduced throughout the year are now feeding through into both operational and financial performance with increased player numbers and average net daily revenues versus the previous quarter, despite continued competition from illegal US-facing sites and the difficult macroeconomic climate."

Partygaming said its casino business has continued to perform well on the back of new games and higher jackpots, while Bingo has grown substantially since the group bought Cashcade in July.

Sports betting has benefitted from a good run of sporting results and the introduction of improved risk management tools.

The company also said new gambling regulations in Italy and France, due to be announced in 2010, represent significant revenue opportunities. Last month Partygaming launched an Italian online poker service with Fueps as it builds out its Italian poker network.

The company said Friday that it has agreed a new GBP35 million loan facility which it will use for general corporate purposes including mergers and acquisitions.

In April, PartyGaming agreed to pay $105 million to U.S. authorities, and in turn the U.S. attorney's office for the Southern District of New York agreed not to prosecute the Gibraltar-based company or its subsidiaries for providing Internet gambling to customers in the U.S. before the federal government's ban of the industry in October 2006.

Since the resolution of the U.S. prosecution situation, there has been widespread speculation about consolidation in the market with Vienna-listed online gaming group Bwin Interactive Entertainment AG rumored to be a merger target. BWin is also based in Gibraltor.

PartyGaming will report its fourth quarter key performance indicators on Feb. 3.

Partygaming shares, which closed Thursday at 259 pence, up 2.5% on the day, rose further after Friday's update and at 0805 GMT stood up 1.9% 263 pence.