20th Oct 2006 07:00
PartyGaming Plc20 October 2006 20 October 2006 PartyGaming Plc ("PartyGaming" or the "Company" and, together with its subsidiaries, the "Group") Third Quarter Key Performance Indicators and Trading Update Highlights > Group revenue up 53% to $337.2m (2005: $220.0m); Group revenue from non-US facing operations up 158% to $92.0m (2005: $35.6m) > Active player days in poker up 16% to 14.0m (2005: 12.0m); Active player days in poker from non-US facing operations up 134% to 3.9m (2005: 1.7m) > Real money poker sign-ups of 267,948 (2005: 209,372), of which 128,825 were from non-US facing operations (2005: 55,749) > Poker net daily revenue up 24% to $2.7m per day (2005 : $2.2m); Poker net daily revenue from non-US facing operations up 151% to $0.8m (2005: $0.3m) > Casino net daily revenue up 669% to $0.9m per day (2005: $0.1m); Casino net daily revenue from non-US operations up by 798% to $0.1m per day > Real money gaming with US players suspended on 13 October 2006 upon the SAFE Port Act being signed into law. Associated one off charge of approximately $250m expected in H2 2006 Commenting on today's announcement, Mitch Garber, Chief Executive Officer, said: "The impact of the recently passed legislation in the US has changed the shapeof our business fundamentally. On 13 October 2006, following the SAFE Port Actbeing passed into law, the Group suspended all of its real money gamingoperations with players located in the US, thereby becoming an exclusivelynon-US online gaming business. Whilst the US has historically represented themajority of the Group's revenues and profits, I am pleased to report that ournon-US business continued to deliver strong growth in the quarter with revenuesup 158% year on year to $92.0m, active player days up 141% to 4.1m and thenumber of unique active players up 161% to 331,520. "Given the change in our business environment, the Group has already movedswiftly to reduce its cost base. Notwithstanding this, it is expected that theGroup's Clean EBITDA margin for the full year will be significantly lower thanit was in the first half of 2006, reflecting the one-off costs of rationalisingour business as well as the fixed nature of certain costs that were previouslyabsorbed by a much larger revenue base. "PartyGaming is a highly dynamic business, one that has proved time and againits ability to adapt to new challenges and new environments. The Group has someof the most talented people in online gaming and we are determined to play toour strengths: offering consumers online brands they can trust, using the verybest technology and supported by outstanding customer service." Given the changes to the Group's business, we have broken down the KPIs in moredetail, providing information for the non-US facing operations as well as theGroup as a whole. In the Appendix we have also set out KPI data by product onboth a consolidated* basis as well as for the non-US facing operations. Inaddition, to assist analysts and investors, comparable historic KPI data for ournon-US facing operations since the beginning of 2005 is now available fordownload at www.partygaming.com/investor/documentation.html. Consolidated* Key Performance Indicators - Group Three months to 30 September 2006 % % change 2005 Change versus versus prior year Q2 Active player days 14,693,396 1% 20% 12,222,345Daily average players 159,711 0% 20% 132,852Yield per active player day $22.7 3% 32% $17.2Yield per unique active player in the quarter $326.1 2% 9% $298.4New real money sign-ups 286,017 17% 25% 229,363Unique active players during the period 1,024,204 2% 45% 704,955Unique active players in September 613,477 n/a 34% 457,609Average daily revenue (excluding skins) $3,630,003 3% 59% $2,286,652 Nine months to 30 September 2006 % change versus prior 2005 year Active player days 43,534,198 25% 34,902,024Daily average players 159,466 25% 127,846Yield per active player day $22.8 26% $18.1Yield per unique active player in the period $602.2 9% $553.8New real money sign-ups 805,549 21% 664,770Unique active players during the period 1,651,625 44% 1,143,113Average daily revenue (excluding skins) $3,643,438 57% $2,318,812 Group revenue in the period was up by 53% versus the previous year and 6%compared with the second quarter to $337.2m. This performance was driven bystrong growth in the non-US business and the acquisition of Gamebookers duringthe period. Overall poker revenue of $247.1m grew by 18% year on year driven bystrong growth outside the US. Group casino revenue grew substantially year onyear to $84.2m, which also represented an increase of 11% versus the secondquarter, with the non-US markets again growing particularly strongly. ExcludingGamebookers that generated net revenue of $3.2m in the period since itsacquisition on 3 August 2006, Group revenue increased by 52% year on year and by5% versus the second quarter. The total number of unique active players in the third quarter increased by 45%over the previous year and by 2% versus the previous quarter to over 1.0 millionplayers of which 613,477 were active in September. This growth was driven bymarkets outside the US, reflecting the Group's focus on developing itsinternational business. Total active player days in the third quarter also grew strongly year on yearwith an increase of 20% versus the same quarter in 2005 although a softerperformance by the US business meant that overall this was just 1% ahead of thesecond quarter. The non-US facing operations grew active player days by 13%versus the second quarter. Yield per active player day for the Group as a whole of $22.7 was 3% ahead ofthe second quarter reflecting the normal seasonal upturn. It was also 32% aheadof the third quarter of 2005, reflecting the impact from cross-selling higheryielding casino games such as blackjack to the Group's poker customers. Further analysis of the Group's Key Performance Indicators by each of the keyproduct segments (excluding Sports Betting that was added on 3 August 2006) isprovided in the Appendix. * excluding Gamebookers that was acquired on 3 August 2006 Consolidated* Key Performance Indicators -non-US facing operations Three months to 30 September 2006 % % change 2005 change versus versus prior year Q2 Active player days 4,062,583 13% 141% 1,688,180Daily average players 44,159 12% 141% 18,350Yield per active player day $21.9 3% 18% $18.5Yield per unique active player in the quarter $267.9 2% 9% $246.2New real money sign-ups 138,516 23% 126% 61,327Unique active players during the period 331,520 14% 161% 126,980Unique active players in September 199,648 n/a 143% 82,233Average daily revenue (excluding skins) $965,281 15% 184% $339,843 Nine months to 30 September 2006 % change versus 2005 prior year Active player days 10,810,971 156% 4,228,561Daily average players 39,601 156% 15,489Yield per active player day $22.0 9% $20.2Yield per unique active player in the period $447.2 2% $438.9New real money sign-ups 359,186 144% 147,252Unique active players during the period 532,916 174% 194,549Average daily revenue (excluding skins) $872,920 179% $312,764 Non-US revenue in the period was up by 158% versus the previous year and by 21%compared with the second quarter to $92.0m. This was driven by strong growth inboth poker and casino as well as $3.2m of net revenue from Gamebookers that wasacquired in August 2006. Excluding Gamebookers, revenue from non-US facingoperations increased by 149% year on year and by 17% versus the second quarter. The number of unique active players outside the US increased by 161% comparedwith the previous year and by 14% versus the previous quarter to 331,520, 60% ofwhich were active in the month of September. The performance of territoriessuch as Scandinavia and Western Europe have been particularly strong while newterritories such as Eastern Europe and South America are also beginning to bearfruit. Driven by strong player growth, active player days also grew stronglyoutside the US - up by 141% year on year and by 13% versus the previous quarter. Yield per active player day at $21.9 was 3% ahead of the second quarter and 18%ahead of the previous year, reflecting the continued popularity of the Group'sgames in international markets as well as the introduction of blackjack to theGroup's poker customers during the fourth quarter of 2005. This was slightlylower than for the Group as a whole, primarily due to a lower level ofcross-sell into casino games and also reflecting a lower average frequency ofplay. Total average daily revenue for the non-US business (excluding Gamebookers)increased by 184% year on year to $1.0m per day (2005: $0.3m). Further analysis of the KPIs by each of the key product segments, split betweenour non-US facing operations and the Group as a whole is provided in theAppendix. * excluding Gamebookers that was acquired on 3 August 2006 Trading update and business developments In the few days since US customers were prevented from accessing the real moneysites on 13 October 2006, average daily gross revenue of the non-US facingbusiness has been 2% below that seen in the third quarter. However, as therehas been less than one week since the Group suspended taking wagers from its UScustomers, it is too early to comment precisely on what impact there will begoing forward, if any, upon the Group's non-US facing revenues. In light of the new business environment, the Group has already moved swiftly toreduce its cost base. However, it is expected that the Group's Clean EBITDAmargin for the full year and thereafter will be significantly lower than it wasin the first half of 2006, reflecting the one-off costs of rationalising ourbusiness as well as the fixed nature of certain costs that were previouslyabsorbed by a much larger revenue base. A one-off restructuring charge ofapproximately $250m is expected to be incurred during the second half of thecurrent financial year, around three quarters of which is non-cash. The first of our multi-lingual client versions of PartyPoker will be launched inOctober 2006 and this will be followed by other versions over the next fewmonths with a multi-currency offering expected in 2007. Gamebookers, the Group's exclusively non-US facing sportsbook that was acquiredon 3 August 2006, has performed ahead of the Board's expectations. Supported bythe Gamebookers infrastructure, PartyBets is on-track to be launched on theintegrated Party-branded platform by the end of the year. Contacts: PartyGaming Plc +44 (0)20 7337 0100Peter Reynolds, Director of Investor RelationsJohn Shepherd, Director of Corporate Communications Financial Dynamics +44 (0)20 7831 3113Edward Bridges / Juliet Clarke Conference call Friday 20 October 2006 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 to be held at 9.30am on Friday 20 October,2006. The details of the call are as follows: Dial-In No: +44 (0) 1452 562 815 (UK) +1 866 629 0054 (US)Password: PartyGamingUK Replay no: +44 (0) 1452 550 000 (available for 1 week)Replay passcode: 8403904US Replay no: +1 866 247 4222 (available for 1 week)Replay passcode: 8403904 All times are British Summer Time. This announcement includes statements that are, or may be deemed to be,"forward-looking statements". By their nature, forward-looking statementsinvolve risk and uncertainty because they relate to future events andcircumstances. Forward-looking statements may and often do differ materiallyfrom actual results. Any forward-looking statements in this announcement reflectPartyGaming's view with respect to future events as at the date of thisannouncement. Save as required by law or by the Listing Rules of the UK ListingAuthority, PartyGaming undertakes no obligation publicly to release the resultsof any revisions to any forward-looking statements in this announcement that mayoccur due to any change in its expectations or to reflect events orcircumstances after the date of this announcement. Appendix Poker - Key Performance Indicators - Group Three months to 30 September 2006 % % 2005 change change versus versus Q2 prior year Active player days 13,995,545 0% 16% 12,037,464Daily average players 152,125 (1%) 16% 130,842Yield per active player day $17.7 2% 7% $16.6Yield per unique active player in the quarter $254.5 2% (14%) $295.8New real money sign-ups 267,948 15% 28% 209,372Unique active players during the period 970,800 (0%) 44% 674,212Unique active players in September 574,355 n/a 30% 443,307Average daily revenue (excluding skins) $2,685,791 0% 24% $2,167,619 Nine months to 30 September 2006 % change versus 2005 prior year Active player days 41,942,310 22% 34,384,065Daily average players 153,635 22% 125,949Yield per active player day $17.8 2% $17.4New real money sign-ups 763,648 25% 610,285Unique active players during the period 1,574,377 46% 1,079,838Average daily revenue (excluding skins) $2,741,879 25% $2,185,542 Poker - Key Performance Indicators - non-US facing operations Three months to 30 September 2006 % % 2005 change change versus versus Q2 prior year Active player days 3,891,758 11% 134% 1,659,890Daily average players 42,302 10% 134% 18,042Yield per active player day $19.2 2% 7% $18.0Yield per unique active player in the quarter $239.8 1% (4%) $249.9New real money sign-ups 128,825 21% 131% 55,749Unique active players during the period 311,979 12% 167% 117,014Unique active players in September 185,446 n/a 135% 78,796Average daily revenue (excluding skins) $813,054 12% 151% $324,555 Nine months to 30 September 2006 % change versus 2005 prior year Active player days 10,489,243 153% 4,150,748Daily average players 38,422 153% 15,204Yield per active player day $19.5 (1%) $19.6New real money sign-ups 338,411 157% 131,837Unique active players during the period 501,571 182% 177,895Average daily revenue (excluding skins) $747,379 151% $298,156 Casino - Key Performance Indicators - Group Three months to 30 September 2006 % % 2005 change change versus versus Q2 prior year Active player days 2,219,918 5% 1,101% 184,881Daily average players 24,130 4% 1,100% 2,010Yield per active player day $37.9 5% (36%) $59.2Yield per unique active player in the quarter $219.9 (1%) (38%) $356.2New real money sign-ups 16,625 31% (17%) 19,991Unique active players during the period 383,113 12% 1,146% 30,743Unique active players in September 195,830 n/a 1,269% 14,302Average daily revenue $915,533 10% 669% $119,033 Nine months to 30 September 2006 % change versus 2005 prior year Active player days 6,532,852 1,161% 517,959Daily average players 23,930 1,161% 1,897Yield per active player day $37.3 (47%) $70.2New real money sign-ups 40,383 (26%) 54,485Unique active players during the period 715,231 1,030% 63,275Average daily revenue $891,736 569% $133,270 Casino - Key Performance Indicators - non-US facing operations Three months to 30 September 2006 % % 2005 change change versus versus Q2 prior year Active player days 448,016 21% 1,484% 28,290Daily average players 4,870 19% 1,484% 308Yield per active player day $28.2 4% (43%) $49.7Yield per unique active player in the quarter $119.6 (1%) (36%) $187.4New real money sign-ups 8,649 37% 55% 5,578Unique active players during the period 105,676 28% 1,308% 7,504Unique active players in September 55,469 n/a 1,514% 3,437Average daily revenue $137,339 25% 798% $15,287 Nine months to 30 September 2006 % change versus 2005 prior year Active player days 1,159,502 1,390% 77,813Daily average players 4,247 1,390% 285Yield per active player day $28.4 (45%) $51.3New real money sign-ups 19,684 28% 15,415Unique active players during the period 195,125 1,072% 16,654Average daily revenue $120,460 725% $14,608 Emerging Games* - Key Performance Indicators - Group Three months to 30 September 2006 % % 2005 change change versus versus Q2 prior year Active player days 276,260 - - -Daily average players 3,003 - - -Yield per active player day $9.6 - - -Yield per unique active player in the quarter $101.7 - - -New real money sign-ups 1,444 - - -Unique active players during the period 25,933 - - -Unique active players in September 12,508 - - -Average daily revenue $28,680 - - - Emerging Games - Key Performance Indicators - non-US facing operations Three months to 30 September 2006 % % 2005 change change versus versus Q2 prior year Active player days 109,689 - - -Daily average players 1,192 - - -Yield per active player day $12.5 - - -Yield per unique active player in the quarter $118.2 - - -New real money sign-ups 1,042 - - -Unique active players during the period 11,585 - - -Unique active players in September 5,787 - - -Average daily revenue $14,888 - - - \* The Group's Emerging Games segment currently comprises PartyGammon.com that waslaunched on 23 June 2006. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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