30th Apr 2008 07:01
PartyGaming Plc30 April 2008 30 April 2008 PartyGaming Plc ("PartyGaming" or the "Company" and, together with its subsidiaries, the "Group") Interim Management Statement First Quarter Key Performance Indicators and Trading Update First quarter highlights O Group revenue up 21% to $128.9m (2007: $106.2m) O Poker revenue up 13% to $80.7m (2007: $71.6m) O Casino revenue up 45% to $43.5m (2007: $30.1m) O Sports Betting revenue up 4% to $4.7m (2007: $4.5m) O New loyalty programme launched O Board remains confident about prospects for 2008 Consolidated Key Performance Indicators Three months to 31 March 2008 % change % change 2007 versus versus Q4 2007 Prior year Active player days (m) 7.5 3% 3% 7.3Daily average players (000) 81.9 4% 0% 81.5Yield per active player day ($) 17.3 4% 19% 14.5Yield per unique active player in the quarter ($) 204.1 (1%) 3% 197.4Real money sign-ups (000) 171.8 14% (30%) 244.6Unique active players during the period (000) 631.7 8% 12% 565.4Average daily revenue (excluding skins) ($000) 1,416.7 7% 20% 1,179.9 Group revenues grew to $128.9m in the first quarter, a 21% increase over thatachieved in the first quarter of 2007 and 6% above that achieved in the previousquarter. The Group's Casino business remained the main driver behind thisstrong growth with revenue up 45% year-on-year. Poker revenue grew by 10%versus the previous quarter and 13% versus the prior year, with growth held backby the impact of changes made to the Group's PartyPoints loyalty programmepart-way through 2007 that resulted in higher than expected fair valueadjustments to revenue (14.6% of gross poker revenue in the first quarter of2008 versus 11.4% in the comparable quarter of 2007). Our new loyalty programmewas launched yesterday and whilst slightly later than planned, is expected toresult in fair value adjustments to revenue reverting to previous levels by theend of the first half of 2008. Sports betting saw revenue increase by 4%year-on-year with a healthy 89% increase in the amount wagered being off-set bya lower gross win margin of 5.1% (2007: 8.8%). While the comparable quarter in2007 benefited from a run of favourable results, the first quarter of 2008 wasimpacted by exactly the opposite as well as by continued strong growth in livebetting which attracts lower gross win margins. Over 171,000 real money sign-ups were added during the quarter (2007: 244,600)which was 30% lower than the prior year due to an aggressive marketing campaignto boost player liquidity in the first quarter of 2007, following the enactmentof the Unlawful Internet Gambling Enforcement Act. However the total number ofreal money sign-ups was 14% above that achieved in the fourth quarter of 2007,driven by the launch of marketing campaigns for both PartyCasino and PartyBetsas well as solid growth in poker sign-ups. The number of unique active playersincreased by 12% versus the prior year and by 8% versus the previous quarterdriven by real money sign-ups and the introduction of a series of successfulreactivation campaigns during the period. Consolidated yield per active player day grew by 19% versus the prior yearreflecting the impact of operational changes made during the past twelve monthsand the strong performance by the Group's casino business, and by 4% versus theprevious quarter reflecting lower rates of bonuses and PartyPoints that arenetted from revenues. Consolidated daily net revenue in the first quarter of 2008 grew by 20%year-on-year to $1,416,700 (2007: $1,179,900) and by 7% over the previousquarter (Q4 07: $1,320,200). Poker The Group's poker business experienced a marked increase in both real moneysign-ups and unique active players versus the previous quarter. Sign-ups inpoker reached 130,900 in the quarter, a 10% increase versus the final quarter of2007 with over 1,400 poker sign-ups being added each day versus 1,300 per day inthe previous quarter. While unique active players were up 12% year-on-year, thedaily average number of players was down 1%, reflecting a reduction in thefrequency of play for more recent sign-ups. However, compared with the previousquarter, the daily average number of players was up 2%, with continued growththrough real money sign-ups. The impact of operational changes introducedduring 2007 helped to drive yield per active player day up 13% year-on-year to$13.2, a 9% increase over the previous quarter, which was impacted by higherthan expected fair value adjustments to revenue that reached in excess of 19% inthe period due to earlier changes made to the Group's customer loyaltyprogramme. Following some further amendments to the programme, theseadjustments are expected to now revert to the levels seen in the first half of2007. Taking all of these factors into account, poker revenue increased by 13%year-on-year and by 10% versus the previous quarter to $80.7m (2007: $71.6m). Casino Casino delivered another strong performance driven by PartyCasino with totalcasino revenue up 45% to $43.5m (2007: $30.1m) which was 1% higher than theprevious quarter which had been particularly strong. Real money sign-ups wereup 59% quarter on quarter reflecting the impact of the new PartyCasino marketingcampaign with 19,500 new casino sign-ups added in the period. As a result, thenumber of unique active players in the first three months increased by 14%versus the previous quarter, although this was only 1% higher than the prioryear, reflecting the major marketing push in the first quarter of 2007 thatlifted casino revenue through cross-selling. Yield per active player dayincreased by 24% versus the previous year to $36.8 (2007: $29.6) following thelaunch of improved software and an improved games mix, away from blackjacktowards higher yielding slots and roulette. Sports Betting Total sports betting revenue was up by 4% over the prior year to $4.7m (2007:$4.5m) but was down 8% against the previous quarter. The amounts wageredcontinued to grow strongly in the period reaching $136.6m (2007: $72.4m) whichwas an 89% increase over the prior year and 18% higher than the previousquarter. This growth in betting volumes was helped by a concerted marketingcampaign for PartyBets with real money sign-ups increasing by 11% versus theprevious quarter. Having received formal approval from the Italian regulatorearlier this month, the Group will be launching a sports betting product inItaly ahead of the Euro 2008 football tournament and this is expected to helpgrow the business further. The gross win margin fell to 5.1% (2007: 8.8%)reflecting a series of unfavourable soccer results in Europe as well as poormargins on UK fixed-odds horse racing which have now improved following someoperational changes made during the period. As usual, full details of all of the Group's quarterly KPI data by segment isavailable for download at the Group's website at http://www.partygaming.com/investor/documentation.html. Trading Update In the 4 weeks ended 28 April 2008, total average gross daily revenue was down1% to $1,748,200 (Q1 08: $1,766,700) reflecting the start of the seasonallyquiet period of the year. Poker is slightly weaker than expected whereas casinois performing ahead of expectations and sports betting has enjoyed a recovery ingross win margin. Total real money sign-ups averaged 1,870 per day and in poker there were onaverage 61,300 active players per day generating average gross daily pokerrevenue of $952,600, an 8% decrease over the first quarter of 2008 (Q1 08:$1,038,900). In casino, average gross daily revenue increased by 9% to $710,500(Q1 08: $651,100) while in sports betting gross win per day increased by 11% to$85,100 (Q1 08: $76,700) on the back of an improvement in the gross win marginto 5.7% (Q1 08: 5.1%). Material Events, Transactions and Financial Position On 1 February 2008, the Group paid the final element of the consideration due toTrident Gaming Plc in respect of the acquisition of the business and assetsconnected with the Gamebookers.com website. This amounted to €21.0m and interestof €1.3m. Other than this, there have been no material events, transactions orchanges in the financial position of the Group since the year end other than asoutlined in this statement. Commenting on the Group's Interim Management Statement, Mitch Garber, ChiefExecutive Officer, said: "As we enter the seasonally quiet period of the year, the business is performingwell and there are a number of exciting developments in prospect. Over the nextfew months we will open our licensed Italian business, introduce a number of newbranded online slot machines, and launch a completely new product vertical.Becoming a leader in all verticals and continuing to diversify the revenue baseremains a cornerstone of our strategy, one that is already bearing fruit. Theregulatory environment in Europe appears to be improving and the search for mysuccessor is progressing and advancing positively. We remain confident aboutthe Group's prospects for the full year." Contacts: PartyGaming Plc +44 (0)20 7337 0100Peter Reynolds, Director of Investor RelationsJohn Shepherd, Director of Corporate Communications Conference call Wednesday 30 April 2008 For analysts and investors there will be an opportunity to put questions toMitch Garber, Chief Executive Officer and Martin Weigold, Group FinanceDirector, by way of a conference call at 09.30 (British Summer Time). Thedetails of the call are as follows: Dial-In No: +44 (0)20 8609 1270Password: PartyGaming Replay (available for 1 week):UK Toll Access Number: +44 (0)20 8609 0289UK Toll Free Access Number: 0800 358 2189Replay passcode: 213316# Appendix Poker (including Emerging Games) - Key Performance Indicators Three months to 31 March 2008 % change % change 2007 versus Q4 versus 2007 prior yearActive player days (m) 6.1 0% 0% 6.1Daily average players (000) 67.4 2% (1%) 67.9Yield per active player day ($) 13.2 9% 13% 11.7Yield per unique active player in the quarter ($) 156.6 3% 1% 155.7Real money sign-ups (000) 130.9 10% (38%) 209.8Unique active players during the period (000) 515.5 7% 12% 459.9Average daily revenue (excluding skins) ($000) 887.2 11% 12% 795.3 Casino (including Bingo)- Key Performance Indicators Three months to 31 March 2008 % change % change 2007 versus Q4 versus 2007 prior yearActive player days (000) 1,181.7 9% 16% 1,018.5Daily average players (000) 13.0 10% 15% 11.3Yield per active player day ($) 36.8 (7%) 24% 29.6Yield per unique active player in the quarter ($) 184.4 (11%) 43% 129.1Real money sign-ups (000) 19.5 59% 38% 14.1Unique active players during the period (000) 235.7 14% 1% 233.4Average daily revenue (excluding skins) ($000) 477.5 2% 43% 334.8 Sports Betting - Key Performance Indicators Three months to 31 March 2008 % change % change 2007 versus Q4 versus 2007 prior yearActive player days (000) 899.5 7% (2%) 916.0Daily average players (000) 9.9 8% (3%) 10.2Yield per active player day ($) 5.3 (13%) 8% 4.9Yield per unique active player in the quarter ($) 56.1 (18%) (5%) 58.8Real money sign-ups (000) 21.5 11% 4% 20.7Unique active players during the period (000) 84.2 12% 10% 76.2Average daily revenue ($000) 52.0 (7%) 4% 49.8 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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