9th Apr 2014 07:14
LONDON (Alliance News) - Bwin.party Digital Entertainment PLC Wednesday announced the appointment of Philip Yea as its new chairman, while saying revenues in the first quarter were up on the previous quarter but down when compared with a year earlier
The Gibraltar-based online gaming company said the quarter to March 31 had been hit by a number of factors, including its shift in focus from 'volume to value'. Bwin.party has been changing its business model to focus on newly regulated online betting and gaming markets, where returns are higher and the companies have more certainty over regulatory conditions.
These include Austria, Denmark, France, Germany, Italy Spain, the UK, and the newly regulated US state of New Jersey.
The move has been paying off, but has hit revenues in the short-term as player numbers decline.
Bwin.party said that average daily net revenue was up 4% in the first quarter, versus the previous quarter, but was down 9% versus the prior year, hit by the shift in strategy, as well as internet-service-provider blocking in Greece, migration losses, and a challenging poker market in Europe.
Total revenue for the three months to March 31 rose 1% quarter-on-quarter but declined 8% to EUR165.7 million from EUR180.2 million a year earlier. It said that nationally regulated and taxed markets accounted for 56% of total revenue in the period, up from 51% a year earlier, while mobile accounted for 17% of total gross gaming revenue.
Bwin.party said the total amounts wagered fell across the board: in sports betting, casino, poker and bingo. It said that daily average players fell by 23% to 155.6 million, compared with 203.3 million the prior year.
The group reiterated is positive outlook for the year ahead, saying it expects a boost from new product launches, continued mobile expansion, further growth in the US, and increased betting volumes during the FIFA World Cup in Brazil this coming June.
It said it remains optimistic about new market opportunities in the US, given its early success in New Jersey, as well as with online poker bills currently being reviewed in California and New York.
"Whilst we are investing in growing our share in nationally regulated markets, the EUR20 million of additional cost savings should help to drive higher clean [earnings before interest, taxes, depreciation and amortisation] margins in 2014," said Chief Executive Officer Norbert Teufelberger in a statement.
The group said it has appointed Yea to succeed Simon Duffy as chairman, when he steps down as the company's annual general meeting on May 22.
Yea, 59, is a non-executive director of Vodafone Group PLC and was previously chief executive of 3i Group PLC between 2004 and 2009. Yea has a holding of 83,380 bwin.party shares in his personal pension plan.
"With an activist new investor and a new chairman bwin.party has external and internal agents for change. However, with today's trading statement comes further evidence that the company may already be on the right track. We reiterate our buy rating and 200p target price," said analysts at Numis, referring to activist investor Owl Spring, which it said took a stake in Bwin.party a few weeks ago.
Bwin.party shares were quoted flat at 125.00 pence at the open Wednesday.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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