6th Feb 2009 07:01
6 February 2009
PartyGaming Plc
("PartyGaming" or the "Company" and, together with its subsidiaries, the "Group")
Fourth Quarter Key Performance Indicators and Trading Update
Highlights
Group revenue of $100.4m (2007: $122.4m) making $472.9m for the full year, a 3% increase over the prior year (2007: $457.8m)
Currency movements, the relaunch of PartyPoker and increased competition affected revenue in the quarter, but Clean EBITDA margins better than expected
The Board expects Clean EBITDA for the full year to be at least $143.0m1 (2007: $111.7m), up 28% year-on-year and slightly ahead of market expectations
Exclusive rights for an online slot game using the Frank Sinatra brand and a world leading video game secured
B2B strategy on track with CIRSA agreement announced today
Commenting on the Group's full year revenue and fourth quarter KPIs, Jim Ryan, Chief Executive Officer, said:
"We continue to make solid progress in the execution of our strategy. The relaunch of PartyPoker has gone well, as has our new VIP and loyalty programme with player numbers up 8% over the previous quarter. Our business to business strategy is also progressing well. In a separate release today we have announced the signing of a three-year exclusive agreement to explore and develop online gaming opportunities in Spanish speaking countries with CIRSA, one of Europe's leading offline leisure and gaming companies.
"Trading conditions have remained tough with an unlevel playing field in poker and the appreciation of the US dollar against other currencies continuing to impact top line performance. However, currency movements had a corresponding benefit on our costs and, consequently, we anticipate Clean EBITDA for the full year to be slightly ahead of market expectations.
"Our discussions with the US Department of Justice continue to progress in line with our expectations and the execution of our strategic plan together with tight control over our cost base means we look forward to making further progress to consolidate our position as the world's leading listed online gaming company."
1 Subject to audit of results for the year ended 31 December 2008
Consolidated Key Performance Indicators - Continuing operations
|
Three months to 31 December |
2008 |
% change versus Q3 2008 |
% change versus Prior year |
2007 |
|
Active player days (m) |
6.3 |
7% |
(14%) |
7.3 |
|
Daily average players (000) |
68.9 |
8% |
(13%) |
79.1 |
|
Yield per active player day ($) |
15.8 |
(21%) |
(6%) |
16.8 |
|
Yield per unique active player in the quarter ($) |
171.7 |
(21%) |
(18%) |
208.4 |
|
New real money sign-ups (000) |
168.0 |
22% |
12% |
150.4 |
|
Unique active players during the period (000) |
584.3 |
8% |
(1%) |
587.3 |
|
Average daily revenue (excluding skins) ($000) |
1,090.8 |
(15%) |
(18%) |
1,330.4 |
|
Total revenue ($m) |
100.4 |
(15%) |
(18%) |
122.4 |
Group revenue was $100.4m in the fourth quarter of 2008 which was down on the prior year as well as the previous quarter. Key factors affecting the performance included the sharp movement in the US dollar against the Euro, Canadian Dollar and Sterling; increased promotions associated with the successful relaunch of the Group's poker product at the end of September 2008; continued strong competition in poker; and a delay in the launch of the Group's new loyalty scheme which went live in December 2008.
Against the Euro, the average dollar exchange rate in the period was up 9% versus the fourth quarter of 2007 and up 12% versus the previous quarter. Against Sterling the average dollar exchange rate was up 23% against the prior year and 17% versus the previous quarter. Such movements have had a material impact on the dollar value of customer deposits and European players' capacity to generate dollar revenues for the Group. We estimate the impact of foreign exchange movements to have adversely impacted revenues in the fourth quarter by more than $15.0m.
Continued competitive pressures, particularly in poker, where sites that continue to take bets from US customers are distorting the market, and a delay in the launch of the Group's new loyalty scheme both affected player frequency. These factors contributed to a 14% decline in active player days year-on-year, although they were up 7% versus the previous quarter. Whilst gross revenue fell 7% quarter-on-quarter, the competitive pressures together with promotion costs associated with the relaunch of PartyPoker during the period meant that bonuses and other fair value adjustments to revenue increased to 27% of gross revenue overall, compared with 20% in the previous quarter and 21% in the fourth quarter of 2007. As a result, average yield per active player day was down 6% versus the prior year and down 21% versus the previous quarter.
Whilst yields and player frequency were adversely affected during the period, the number of new player sign-ups increased by 22% and the number of unique active players increased by 8% versus the previous quarter reflecting good growth in poker, casino and sports. The volume of new bingo players fell quarter-on-quarter and year-on-year following the reduced programming schedule for Bingo Night Live on ITV1 in the UK. The net impact of each of these factors was that total average net revenue per day in the fourth quarter of 2008 was $1,090,800 (2007: $1,330,400).
Full details of all of the Group's quarterly KPI data by segment is available for download at the Group's website at http://www.partygaming.com/investor/documentation.html.
Business developments
In a separate announcement today and as part of our strategy to leverage the assets of others, the Group has announced that it has entered into an agreement to explore and develop online gaming opportunities with CIRSA Gaming Corporation S.A. ("CIRSA"), one of Europe's leading gaming and leisure companies. CIRSA operates a network of 57 bingo clubs and 139 amusement arcades in Spain and also has a strong presence in Latin America.
Additionally, following on from the success of licensing a number of well known movie brands, the Group has also secured licenses to develop slots using one of the world's most popular video games from Capcom Entertainment, Inc. and, separately, using the Frank Sinatra brand. With a true gaming pedigree, it is hoped that following the launch of the latest version of the Capcom branded game in the second quarter of 2009, it will prove to be yet another highly successful slot game. The late Frank Sinatra remains one of the world's best loved and most recognised entertainers. Under the terms of a three-year exclusive agreement with Frank Sinatra Enterprises, the Group expects to launch an exclusive online slot game during the second quarter of 2009 using the Frank Sinatra brand as well as original recordings of his music including "New York, New York" and "Who Wants To Be A Millionaire".
Trading Update
In the 5 weeks ended 4 February 2009, against most major currencies the US dollar has strengthened further versus the average for the fourth quarter and this has continued to impact revenue performance. Average gross daily revenue was $1,442,900, a 2% reduction from that achieved in the fourth quarter (Q4 08: $1,468,300)2. In poker, new player sign-ups had increased to an average of 1,494 per day, and there were on average 51,000 active players per day generating average gross daily poker revenue of $756,700, a 4% decrease over the fourth quarter of 2008 (Q4 08: $785,300). In casino, gross revenue was stable at $597,200 per day (Q4 08: $597,400)2. In sports betting the amount bet per day increased by 13% versus the fourth quarter of 2008 to $1,670,600 (Q4 08: $1,484,100) with a gross win margin of 4.5% (Q4 08: 4.6%) generating gross win per day of $75,700 (Q4 08: $68,400). In Bingo, average gross daily revenue was $13,200 (Q4 08: $17,200).
The Group's preliminary announcement of results for the year ended 31 December 2008 will be made on 11 March 2009.
Contacts:
|
PartyGaming Plc |
+44 (0)20 7337 0100 |
|
Peter Reynolds, Group Director of Corporate Affairs |
|
|
John Shepherd, Director of Corporate Communications |
Conference call
Friday 6 February 2009
For analysts and investors there will be an opportunity to put questions to Jim Ryan, Group Chief Executive Officer and Martin Weigold, Group Finance Director, by way of a conference call at 09.30 GMT. The details of the call are as follows:
|
Dial-In No: |
+44 (0)20 8609 1270 |
|
Replay (available for 1 week): |
+44 (0)20 8609 0289 (available for 1 week) |
|
Replay passcode: |
250153# |
2 Excluding one-off amount receivable in respect of compensation for the number of casino players not achieving the contractual minimum level from an affiliate
Appendix
Poker* - Key Performance Indicators - Continuing operations
|
Three months to 31 December |
2008 |
% change versus Q3 2008 |
% change versus prior year |
2007 |
|
Active player days (m) |
4.9 |
4% |
(20%) |
6.1 |
|
Daily average players (000) |
53.6 |
6% |
(19%) |
66.0 |
|
Yield per active player day ($) |
11.2 |
(20%) |
(8%) |
12.2 |
|
Yield per unique active player in the quarter ($) |
121.4 |
(24%) |
(21%) |
153.0 |
|
New real money sign-ups (000) |
117.7 |
28% |
(1%) |
118.6 |
|
Unique active players during the period (000) |
453.8 |
11% |
(6%) |
483.8 |
|
Average daily revenue (excluding skins) ($000) |
599.1 |
(15%) |
(26%) |
804.4 |
|
Total poker revenue ($m) |
55.1 |
(15%) |
(26%) |
74.0 |
*includes Emerging Games segment
Casino - Key Performance Indicators - Continuing operations
|
Three months to 31 December |
2008 |
% change versus Q3 2008 |
% change versus prior year |
2007 |
|
Active player days (000) |
1,010.3 |
2% |
(3%) |
1,039.2 |
|
Daily average players (000) |
11.0 |
2% |
(3%) |
11.3 |
|
Yield per active player day ($) |
39.8 |
(14%) |
(3%) |
41.0 |
|
Yield per unique active player in the quarter ($) |
191.1 |
(15%) |
(13%) |
218.7 |
|
New real money sign-ups (000) |
24.1 |
21% |
132% |
10.4 |
|
Unique active players during the period (000) |
210.3 |
3% |
8% |
194.7 |
|
Average daily revenue (excluding skins) ($000) |
436.9 |
(12%) |
(6%) |
462.7 |
|
Total casino revenue ($m) |
40.2 |
(12%) |
(6%) |
42.6 |
Sports Betting - Key Performance Indicators - Continuing operations
|
Three months to 31 December |
2008 |
% change versus Q3 2008 |
% change versus prior year |
2007 |
|
Active player days (000) |
945.9 |
34% |
12% |
844.1 |
|
Daily average players (000) |
10.3 |
34% |
12% |
9.2 |
|
Yield per active player day ($) |
4.1 |
(43%) |
(33%) |
6.1 |
|
Yield per unique active player in the quarter ($) |
46.8 |
(38%) |
(32%) |
68.6 |
|
New real money sign-ups (000) |
22.8 |
31% |
18% |
19.4 |
|
Unique active players during the period (000) |
83.0 |
24% |
11% |
75.0 |
|
Average daily revenue ($000) |
42.3 |
(23%) |
(24%) |
56.0 |
|
Total sports betting revenue ($m) |
3.9 |
(24%) |
(24%) |
5.1 |
Bingo - Key Performance Indicators - Continuing operations
|
Three months to 31 December |
2008 |
% change versus Q3 2008 |
% change versus prior year |
2007 |
|
Active player days (000) |
98.2 |
(16%) |
16% |
84.7 |
|
Daily average players (000) |
1.1 |
(15%) |
22% |
0.9 |
|
Yield per active player day ($) |
11.7 |
(20%) |
46% |
8.0 |
|
Yield per unique active player in the quarter ($) |
54.5 |
(32%) |
96% |
27.8 |
|
New real money sign-ups (000) |
3.4 |
(59%) |
79% |
1.9 |
|
Unique active players during the period (000) |
21.0 |
(2%) |
(14%) |
24.4 |
|
Average daily revenue ($000) |
12.5 |
(33%) |
69% |
7.4 |
|
Total bingo revenue ($m) |
1.2 |
(29%) |
71% |
0.7 |
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