15th Jul 2014 07:54
LONDON (Alliance News) - Online gaming company Bwin.party Digital Entertainment PLC Tuesday said revenue in the second quarter were softer than expected as strong sports betting was held back by weak poker and casino revenue, while fellow gaming company GVC Holdings PLC reported strong growth in the quarter.
Bwin.party said its revenue performance in the second quarter and the first half of the year as a whole was "mixed", with a solid performance in sports, up year-on-year, but weak trading in both poker and casino, and flat bingo revenue held back by challenging competitive conditions in the UK and Italy.
"Revenue a little softer than expected but clean EBITDA [earnings before interest, taxes, depreciation and amortisation] margins were slightly better than expected," Chief Executive Norbert Teufelberger said in a statement, commenting on trading in the second quarter.
The Gibraltar-based group - which was formed out of a merger in 2011 of PartyGaming PLC and Bwin Interactive Entertainment AG - has been attempting to recharge growth and profits by increasing its focus on customers that generate the most value from regulated, or taxed, markets including Austria, Denmark, France, Germany, Italy, Spain, the UK, and the newly regulated US state of New Jersey.
"As expected, the start-up losses in New Jersey, ISP blocking in Greece and the absence of domain sales in the first half have impacted both the revenue and clean EBITDA performance versus the prior year," said Teufelberger. "However, we are taking steps to improve operating performance, simplify decision-making, reduce complexity and costs and, as a result, remain confident about the full year outlook."
Bwin.party said sports betting saw an increase in player activity during the period, boosted by the FIFA World Cup, and strong growth via mobile and tablets. However, growth in sports was hit by weak trading elsewhere in the business, as its poker business saw market declines in several key territories, and casino was hit by declines in poker.
The FTSE 250 company responded to press speculation at the end of last month that the company is considering selling some or all of the company as part of a strategic review by issuing a statement stating that it has no plans to break-up or sell the company. Bwin.party made no further comment Tuesday.
AIM-listed GVC Holdings issued a more confident trading statement Tuesday, citing growth in player numbers and revenue during the six months to June 30, boosted by strong trading over the World Cup period.
GVC increased its quarterly dividend to EUR12.5 cents per share, and said it anticipates declaring a second interim dividend for the six months ended June 30 along with the release of its interim results in September.
The company said net gaming revenue of EUR54.8 million, or EUR602,000 per day in the second quarter, was up 11% on the prior year, and 8.9% on the first quarter. Total revenue in the first half of the year was EUR105.1 million, up from the EUR72.9 million reported in the first half of last year.
"The results in the second quarter have been boosted by the World Cup...which not only made a current year contribution to profitability, but is expected to leave a legacy of greater market penetration, significantly more customers and a stronger and more diversified revenue base," GVC said in a statement Tuesday.
Bwin.party shares were down 0.2% at 86.10 pence Tuesday morning, while GVC shares were up 0.8% at 456.00p.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
GVC.LBPTY.L