15th Oct 2009 07:00
15 October 2009
PartyGaming Plc
("PartyGaming" or the "Company" and, together with its subsidiaries, the "Group")
Interim Management Statement
Third Quarter 2009 Key Performance Indicators
Highlights
Total revenue1 of $112.7m (2008: $117.7m) up 11% versus Q209 despite seasonality, largely driven by the addition of Cashcade;
Poker revenue of $45.1m (2008: $65.0m) down 8% versus Q209 with higher player numbers offset by lower yields;
Casino revenue of $49.2m (2008: $45.6m) up 2% versus Q209 due to higher player yields;
Sports revenue of $4.2m (2008: $5.1m) up 31% versus Q209 with an improved gross win margin despite poor sporting results
Bingo revenue of $13.8m (2008: $2.0m) driven by the Cashcade acquisition
Q4 trading makes a strong start, in line with expectations, and the Board is confident about the Group's full year prospects
Commenting on the third quarter KPIs, Jim Ryan, Chief Executive Officer, said:
"Our performance in the seasonally weak third quarter was in line with our expectations, with revenue up 11% versus the previous quarter. Casino once again delivered a robust performance with solid growth in player yields. We have increased the gross win margin in sports betting and remain focused on operational improvements to enhance the quality of our product and risk management tools. Poker remains challenging from a competitive standpoint, but we are encouraged by the increased player traffic during September and into October on the back of our new retention initiatives such as the enhanced loyalty programme, improved VIP offer and automated reactivation campaigns. Finally, the addition of Cashcade transformed our presence in the $1.5 billion online bingo market and was the driver behind the substantial increase in our bingo revenue.
"Our strategy is to drive both our B2C and B2B offerings and become a top three player in all of our product verticals. Having launched sites on behalf of four new customers in the quarter, our B2B strategy is progressing well. The important fourth quarter has started strongly, as expected, and we remain confident about the full year outlook."
1 including network services revenue of $0.4m (2008: nil).
Consolidated Key Performance Indicators (excluding network services)
|
Three months to 30 September |
2009 |
% change versus Q2 2009 |
% change versus Prior year |
2008 |
|
Active player days (m) |
7.3 |
26% |
24% |
5.9 |
|
Daily average players (000) |
79.2 |
24% |
24% |
63.9 |
|
Yield per active player day ($) |
15.4 |
(11%) |
(23%) |
20.0 |
|
Yield per unique active player in the quarter ($) |
154.6 |
(17%) |
(29%) |
218.5 |
|
New real money sign-ups (000) |
208.1 |
14% |
51% |
137.6 |
|
Unique active players during the period (000) |
726.3 |
33% |
35% |
538.7 |
|
Average daily net revenue ($000) |
1,220.3 |
10% |
(5%) |
1,279.4 |
In the three months to 30 September 2009, the Group delivered total revenue of $112.7m (2008: $117.7m). This represented an increase of 11% over the previous quarter that was largely due to a maiden contribution from Cashcade following its acquisition on 23 July 2009. Excluding Cashcade, revenue was down 4% versus the previous quarter, in line with the normal seasonal pattern seen in previous years. Clean EBITDA margins remain on track with previous guidance.
The impact of the macroeconomic environment, a relatively strong dollar and a fiercely competitive poker market each impacted the Group's trading performance during the period versus the prior year. However, once again the Group demonstrated its strength in player acquisition with 208,000 new player sign-ups, a 51% increase over the same period the previous year (2008: 137,600). The launch of new marketing campaigns for both PartyPoker and PartyCasino under the "FEEL IT" tag-line helped to increase new player sign-ups as well as the number of active player days and unique active players. The number of consolidated active player days and unique active players grew by 24% and 35% respectively versus the prior year and both increased versus the previous quarter, helped by the acquisition of Cashcade.
Consolidated yield per active player day fell by 11% versus the previous quarter to $15.4 (2008: $20.0) due in part to higher bonus costs driven by the acquisition of Cashcade and the costs associated with the new retention initiatives.
Despite the competitive challenges in poker, we continued to sign-up large numbers of new players and achieved an absolute increase in player numbers versus the previous quarter despite seasonality. Player yields declined year-on-year due to foreign exchange movements as well as competitive pressures that we highlighted at the time of the interim results in August 2009, resulting in bonus costs increasing to 25% of gross revenue in the period, some 5% percentage points higher than the previous quarter.
Casino delivered another solid performance with revenue increasing by 2% versus the previous quarter despite seasonality and by 8% versus the same period in 2008. Whilst the Group's poker players remain an important source of player traffic for casino, the quality of player and revenue mix have continued to improve with yield per active player day increasing to $50.6 (2008: $46.0) and yield per unique active player to $285.8 (2008:$223.5), helped by the new slot games added over the past nine months. The revised jackpot strategy that was introduced in the first half of the year has meant that the maximum potential prize available on our jackpot slot machines is currently over $4.2 million - a factor that is proving particularly popular with our casino players.
Sports betting revenue increased strongly by 31% versus the previous quarter to $4.2m despite poor sporting results thanks to an improved gross win margin of 4.9% (Q2 09: 4.4%) and lower bonus costs on the back of initiatives taken in the previous quarter. However, adverse currency movements meant that revenue was down by 18% year-on-year (2008: $5.1m).
Bingo revenue increased sharply to $13.8m (2008: $2.0m) reflecting the inclusion of Cashcade for the first time. The integration of the business is progressing well and we are pleased with its performance to-date.
For full details of all quarterly KPI data by segment please go to http://www.partygaming.com/investor/documentation.html.
Material Events, Transactions and Financial Position
As at 30 September 2009, the Group had no bank borrowings or other loans and had total cash (and cash equivalents) of $132.4m (2008: $195.5m), the movement primarily reflecting the acquisition of Cashcade from cash resources. Client liabilities as at 30 September 2009 were $127.5m (2008: $129.9m) and balances due from payment processors totaled $24.0m (2008: $23.5m).
There have been no material events, transactions or changes in the financial position of the Group since the half year other than as outlined in this statement.
Contacts:
|
PartyGaming Plc |
+44 (0)20 7337 0100 |
|
Peter Reynolds, Director of Corporate Affairs |
|
|
John Shepherd, Director of Corporate Communications |
Conference call - Thursday 15 October 2009
For analysts and investors there will be an opportunity to put questions to Jim Ryan, Chief Executive Officer and Martin Weigold, Group Finance Director, by way of a conference call at 09.30 BST. The details of the call are as follows:
|
Dial-In No: |
+ 44 (0) 20 8609 0582 |
|
Replay no: |
+44 (0)20 8609 0289 (available for 1 week) |
|
Replay passcode: |
271808# |
Appendix
Poker* - Key Performance Indicators - (excluding network services)
|
Three months to 30 September |
2009 |
% change versus Q2 2009 |
% change versus prior year |
2008 |
|
Active player days (m) |
4.6 |
2% |
(2%) |
4.7 |
|
Daily average players (000) |
50.4 |
3% |
(0%) |
50.6 |
|
Yield per active player day ($) |
9.7 |
(12%) |
(31%) |
14.0 |
|
Yield per unique active player in the quarter ($) |
103.4 |
(12%) |
(35%) |
158.7 |
|
New real money sign-ups (000) |
120.1 |
2% |
30% |
92.1 |
|
Unique active players during the period (000) |
435.5 |
5% |
6% |
409.7 |
|
Average daily net revenue ($000) |
489.7 |
(9%) |
(31%) |
706.8 |
*includes Emerging Games segment
Casino - Key Performance Indicators - (excluding network services)
|
Three months to 30 September |
2009 |
% change versus Q2 2009 |
% change versus prior year |
2008 |
|
Active player days (000) |
972.2 |
0% |
(2%) |
990.4 |
|
Daily average players (000) |
10.6 |
(1%) |
(2%) |
10.8 |
|
Yield per active player day ($) |
50.6 |
1% |
10% |
46.0 |
|
Yield per unique active player in the quarter ($) |
285.8 |
3% |
28% |
223.5 |
|
New real money sign-ups (000) |
22.9 |
(13%) |
15% |
20.0 |
|
Unique active players during the period (000) |
172.2 |
(1%) |
(16%) |
204.0 |
|
Average daily net revenue ($000) |
534.9 |
1% |
8% |
495.5 |
Sports Betting - Key Performance Indicators - (excluding network services)
|
Three months to 30 September |
2009 |
% change versus Q2 2009 |
% change versus prior year |
2008 |
|
Active player days (000) |
772.2 |
(12%) |
10% |
704.2 |
|
Daily average players (000) |
8.4 |
(13%) |
9% |
7.7 |
|
Yield per active player day ($) |
5.4 |
50% |
(25%) |
7.2 |
|
Yield per unique active player in the quarter ($) |
54.5 |
70% |
(28%) |
75.3 |
|
New real money sign-ups (000) |
16.6 |
(55%) |
(5%) |
17.4 |
|
Unique active players during the period (000) |
77.2 |
(22%) |
15% |
67.2 |
|
Average daily net revenue ($000) |
45.7 |
32% |
(17%) |
55.0 |
Bingo - Key Performance Indicators - (excluding network services)
|
Three months to 30 September |
2009 |
% change versus Q2 2009 |
% change versus prior year |
2008 |
|
Active player days (000) |
1,448.5 |
2,278% |
1,140% |
116.8 |
|
Daily average players (000) |
15.7 |
2,143% |
1,108% |
1.3 |
|
Yield per active player day ($) |
9.5 |
(18%) |
(45%) |
17.4 |
|
Yield per unique active player in the quarter ($) |
72.7 |
46% |
(23%) |
94.4 |
|
New real money sign-ups (000) |
48.4 |
7,967% |
490% |
8.2 |
|
Unique active players during the period (000) |
189.8 |
1,237% |
783% |
21.5 |
|
Average daily net revenue ($000) |
150.0 |
1,823% |
579% |
22.1 |
Related Shares:
BPTY.L