19th Nov 2008 07:00
19 November 2008
PartyGaming Plc
("PartyGaming" or the "Company" and, together with its subsidiaries, the "Group")
Interim Management Statement
Third Quarter 2008 Key Performance Indicators and Trading update
Highlights
Commenting on the third quarter KPIs, Jim Ryan, Chief Executive Officer, said:
"We are making solid progress on executing our strategic plan, albeit against a challenging economic backdrop and strengthening US dollar. The launch of the next generation of PartyPoker at the end of September has been well received by our players and the next stage of its three-stage rollout is on track for launch next month. The substantial appreciation of the US dollar has adversely impacted our revenues but has had a corresponding benefit on our costs, most of which are incurred in Euros and Sterling. Consequently, the Clean EBITDA margin achieved in this nine-month period is in line with previous guidance of 29-30%. We have continued to generate good cashflow in the period and retain a strong balance sheet. The Board remains confident of delivering full year Clean EBITDA in line with our expectations."
Consolidated Key Performance Indicators
|
Three months to 30 September |
2008 |
% change versus Q2 2008 |
% change versus Prior year |
2007 |
|
Active player days (m) |
5.9 |
(12%) |
(11%) |
6.6 |
|
Daily average players (000) |
63.9 |
(13%) |
(11%) |
72.1 |
|
Yield per active player day ($) |
20.0 |
6% |
12% |
17.8 |
|
Yield per unique active player in the quarter ($) |
218.5 |
8% |
(5%) |
230.9 |
|
New real money sign-ups (000) |
137.6 |
(10%) |
6% |
129.7 |
|
Unique active players during the period (000) |
538.7 |
(13%) |
5% |
510.9 |
|
Average daily revenue ($000) |
1,279.4 |
(8%) |
0% |
1,282.2 |
The Group delivered total revenue of $117.7m in the third quarter of 2008. Casino, sports betting and bingo grew revenue year-on-year by 25%, 19% and 143% respectively. However, total revenues were flat versus the same period in 2007 due to a 15% decline in poker.
Seasonality and a deferral of some marketing spend until the relaunch of PartyPoker resulted in a 12% decline in the number of new poker player sign-ups versus the previous quarter. However, a concerted marketing push in casino, bingo and sports betting meant that total sign-ups were up by 6% versus the prior year. The total number of unique active players grew by 5% with increases in casino, sports and bingo being partially offset by a reduction in poker. The average number of daily players fell by 11% to 63,900 due to reduced frequency of play, particularly in respect of poker and casino. The reduced frequency of play also affected yields. The yield per active player day increased by 12% but the yield per unique active player in the quarter fell by 5% to $218.5 (2007: $230.9). Overall, across all products, net revenue per day in the third quarter of 2008 averaged $1,279,400, which was marginally lower than the same period in the prior year (2007: $1,282,200).
The sharp rise in the US dollar that began in August 2008 and continued into September, together with the early effects of the economic downturn resulted in lower than expected customer deposits and revenue which was 6% lower than in the second quarter.
While total revenues were softer than expected during the third quarter, marketing costs were also lower and as a result, the Board reaffirms its previous guidance for distribution expenses of approximately 40% of revenue for the full year.
In poker, revenue was down by 15% to $65.0m (2007: $76.3m) reflecting lower yields driven by a reduction in the number of unique active players and their frequency of play. The Group's biggest challenge in poker continues to come from sites that still take bets from customers in the US. Trading in the period was also impacted by some adverse reaction to our new customer loyalty programme and by unplanned downtime in August and planned downtime for the launch of the next generation of PartyPoker. An improved loyalty and VIP programme, incorporating extensive player feedback, will be launched next month.
Total casino revenue increased by 25% to $45.9m (2007: $36.7m). New games such as Top Gun and The Godfather helped to increase player yields that were up by 22% versus the prior year to $46.3 (2007: $37.8), as well as attract new players to PartyCasino. The number of unique active players increased by 11% year-on-year thanks to a strong increase in the number of new casino sign-ups, but fell 16% versus the previous quarter, reflecting seasonality and the softer performance in poker that continues to be the main source of casino players.
Sports betting revenue increased by 19% to $5.1m (2007: $4.3m), primarily due to increased betting volume that was up 42% on the prior year. The benefit of a 25% increase in player numbers year-on-year was reduced by a fall in the gross win margin from 5.7% to 5.2% reflecting growth in live betting which has a lower margin. A number of new features were introduced to PartyBets.com at the end of September 2008. These features and other upgrades over the coming weeks are expected to improve performance further.
Bingo delivered strong year-on-year growth with revenue up by 143% to $1.7m (2007: $0.7m), driven by growth in new player sign-ups which were up by 486% primarily due to the success of ITV Bingo, the Group's bingo white label in the UK. The growth in new player sign-ups drove a 63% increase in the daily average number of players versus the prior year.
For full details of all quarterly KPI data by segment please go to http://www.partygaming.com/investor/documentation.html.
Trading Update
The relaunch of the next generation of PartyPoker at the end of September 2008 as well as the normal seasonal pick-up resulted in a material uplift in player numbers. However, the economic slowdown and the further strengthening of the US dollar, which against Sterling is now 22% higher than the average for the third quarter of 2008 and 16% up against the Euro, continue to affect the Group's revenue performance. In addition, bonus rates have increased due to several retention and reactivation campaigns surrounding the launch of the next generation of PartyPoker.
In the 6 weeks ended 11 November 2008, average gross daily revenue had fallen by 7% from that achieved in the third quarter to $1,492,000 (Q3 08: $1,598,000). New poker player sign-ups averaged 1,220 per day (Q3 08: 1,000), and there were on average 57,950 active poker players per day (Q3 08: 50,600) generating average gross daily poker revenue of $807,900 (Q3 08: $816,200). In casino, average gross daily revenue was $586,000 (Q3 08: $686,800) and bingo was $19,900 (Q3 08: $25,700) while in sports betting, gross win per day was $77,700 per day (Q3 08 $69,200).
Material Events, Transactions and Financial Position
As at 30 September 2008, the Group had no bank borrowings or other loans and had total cash (and cash equivalents) of $195.5m against client liabilities of $129.9m.
Discussions with the Department of Justice are progressing and the Group remains focused on seeking a satisfactory resolution to these discussions as soon as practicable.
There have been no material events, transactions or changes in the financial position of the Group since the half year other than as outlined in this statement.
Contacts:
|
PartyGaming Plc |
+44 (0)20 7337 0100 |
|
Peter Reynolds, Director of Investor Relations |
|
|
John Shepherd, Director of Corporate Communications |
Conference call
Wednesday 19 November 2008
For analysts and investors there will be an opportunity to put questions to Jim Ryan, Chief Executive Officer and Martin Weigold, Group Finance Director, by way of a conference call at 09.30 GMT. The details of the call are as follows:
|
Dial-In No: |
+44 (0) 208 609 1270 |
|
Password: |
PartyGaming |
|
Replay no: |
+44 (0) 208 609 0289 (available for 1 week) |
|
Replay passcode: |
239620# |
Appendix
Poker* - Key Performance Indicators - Continuing operations
|
Three months to 30 September |
2008 |
% change versus Q2 2008 |
% change versus prior year |
2007 |
|
Active player days (m) |
4.7 |
(11%) |
(16%) |
5.6 |
|
Daily average players (000) |
50.6 |
(13%) |
(18%) |
61.4 |
|
Yield per active player day ($) |
14.0 |
1% |
4% |
13.5 |
|
Yield per unique active player in the quarter ($) |
158.7 |
4% |
(11%) |
177.5 |
|
New real money sign-ups (000) |
92.1 |
(12%) |
(17%) |
110.4 |
|
Unique active players during the period (000) |
409.7 |
(15%) |
(5%) |
429.7 |
|
Average daily revenue ($000) |
706.8 |
(12%) |
(15%) |
829.2 |
*includes Emerging Games segment
Casino - Key Performance Indicators - Continuing operations
|
Three months to 30 September |
2008 |
% change versus Q2 2008 |
% change versus prior year |
2007 |
|
Active player days (000) |
990.4 |
(13%) |
2% |
972.1 |
|
Daily average players (000) |
10.8 |
(14%) |
2% |
10.6 |
|
Yield per active player day ($) |
46.3 |
11% |
22% |
37.8 |
|
Yield per unique active player in the quarter ($) |
225.0 |
15% |
13% |
199.9 |
|
New real money sign-ups (000) |
20.0 |
0% |
102% |
9.9 |
|
Unique active players during the period (000) |
204.0 |
(16%) |
11% |
183.6 |
|
Average daily revenue ($000) |
499.0 |
(4%) |
25% |
399.0 |
Sports Betting - Key Performance Indicators - Continuing operations
|
Three months to 30 September |
2008 |
% change versus Q2 2008 |
% change versus prior year |
2007 |
|
Active player days (000) |
704.2 |
(22%) |
11% |
632.5 |
|
Daily average players (000) |
7.7 |
(23%) |
12% |
6.9 |
|
Yield per active player day ($) |
7.2 |
57% |
7% |
6.7 |
|
Yield per unique active player in the quarter ($) |
75.3 |
60% |
(5%) |
79.5 |
|
New real money sign-ups (000) |
17.4 |
(17%) |
118% |
8.0 |
|
Unique active players during the period (000) |
67.2 |
(25%) |
25% |
53.7 |
|
Average daily revenue ($000) |
55.0 |
20% |
19% |
46.3 |
Bingo - Key Performance Indicators - Continuing operations
|
Three months to 30 September |
2008 |
% change versus Q2 2008 |
% change versus prior year |
2007 |
|
Active player days (000) |
116.8 |
26% |
56% |
74.7 |
|
Daily average players (000) |
1.3 |
30% |
63% |
0.8 |
|
Yield per active player day ($) |
14.7 |
29% |
55% |
9.5 |
|
Yield per unique active player in the quarter ($) |
79.6 |
49% |
104% |
39.0 |
|
New real money sign-ups (000) |
8.2 |
15% |
486% |
1.4 |
|
Unique active players during the period (000) |
21.5 |
9% |
18% |
18.2 |
|
Average daily revenue ($000) |
18.6 |
60% |
142% |
7.7 |
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