30th Jan 2008 07:01
PartyGaming Plc30 January 2008 30 January 2008 PartyGaming Plc ("PartyGaming" or the "Company" and, together with its subsidiaries, the "Group") Fourth Quarter Key Performance Indicators and Trading update Fourth quarter highlights- Continuing operations > Group revenue* up 52% to $120.0m (2006: $78.8m) making $448.2m for the full year (2006: $324.7m) > Poker revenue* up 23% to $72.6m (2006: $58.8m) making $288.8m for the full year (2006: $268.1m) > Casino revenue up 156% to $42.3m (2006: $16.5m) making $143.6m for the full year (2006: $51.0m) > Sports Betting revenue up 50% to $5.1m (2006: $3.4m) making $15.8m for the full year (2006: $5.6m) > Clean EBITDA for the full year in 2007 expected to be slightly ahead of current consensus market expectations > Board remains confident about prospects for 2008 * excluding revenue from skins Consolidated Key Performance Indicators - Continuing operations Three months to 31 December % change % change versus versus 2007 Q3 2007 Prior year 2006------------------------------------------------------------------------------------------------------------------Active player days (m) 7.3 11% 30% 5.6Daily average players (000) 79.1 10% 29% 61.4Yield per active player day ($) 16.5 (5%) 18% 14.0Yield per unique active player in the quarter ($) 204.4 (10%) 8% 188.7New real money sign-ups (000) 150.4 16% (4%) 156.2Unique active players during the period (000) 587.3 15% 41% 418.0Average daily revenue (excluding skins) ($000) 1,304.6 4% 52% 857.1 Group revenues reached $120.0m in the fourth quarter of 2007, a 52% increaseover that achieved in the same period in 2006 and the highest quarterly revenuesince the enactment of the Unlawful Internet Gambling Enforcement Act ("UIGEA")in the US in October 2006. Casino and sports betting were the drivers of netrevenue growth in the quarter. Whilst gross poker revenues grew 7% quarter onquarter, a restructuring of the PartyPoints loyalty programme resulted in anincrease in the cost of bonuses and PartyPoints as a percentage of gross revenuein the period. In accordance with IFRS, these items are netted from revenue,resulting in a small reduction in net poker revenue versus the previous quarter. Notwithstanding the above, lower than expected affiliate costs and lowercustomer bad debts are expected to deliver a greater than anticipated increasein Clean EBITDA margins. Both the number of unique active players and daily average players across theGroup's business grew strongly versus the prior year and the previous quarterreflecting the Group's strategy of increasing the player base through both newplayer sign-ups as well as continued efforts to improve player retention. Newplayer sign-ups increased by 16% over the previous quarter, and this contributedto an 11% increase in active player days versus the previous quarter to 7.3million which represented a 30% increase over the fourth quarter of 2006 (2006:5.6 million). Consolidated yield per active player day fell 5% quarter on quarter reflectingthe restructuring of the Group's customer loyalty programme in the fourthquarter, the full impact of which was partially mitigated by the increasingpopularity of the Group's casino products that tend to generate higher yieldsthan poker and sports betting. The year on year growth in yield per activeplayer day of 18% reflects the recovery in yields experienced following the lossof a number of high value players to sites that continue to accept US playersfollowing the enactment of the UIGEA in October 2006. The interaction of eachof these metrics combined to deliver total average net revenue per day in thefourth quarter of 2007 of $1,304,600, a 4% increase over the previous quarterand a 52% increase over the fourth quarter of 2006. Poker The Group's poker business saw a 13% increase in the number of unique activeplayers versus the previous quarter. Despite the normal seasonal pick-up and asuccessful reactivation campaign, the restructuring of the Group's loyaltyprogramme, which resulted in a 9% fall in yield per active player day in theperiod, meant that poker revenue declined by 3% quarter on quarter to $72.6million. Further improvements to the loyalty scheme, with a greater focus onrewarding player loyalty rather than just levels of play are expected to resultin the rate of bonuses and PartyPoints that are netted from revenue returning tolevels seen in the first half of 2007. Since the end of September 2007 theGroup has enjoyed strong growth in the numbers of players playing poker on itssites. However, along with a number of competitors, PartyPoker has lost a smallamount of market share to those sites that continue to take bets from playerslocated in the US and other countries from which we will not accept players forregulatory reasons. It is estimated that as at 28 January 2008 PartyPoker hadan average global market share of 10.2%1. 1 Source: Pokersitescout.com, based on average daily players. Note that datafrom this source excludes tournaments and does not take into account the valueof players Casino Casino delivered another strong performance in the quarter driven by PartyCasinowith total casino revenue of $42.3m, a 15% increase versus the previous quarterand 156% above the prior year (2006: $16.5m). New player sign-ups were up 9%quarter on quarter and were double that achieved in the same period the previousyear. Cross-selling remained the main source of growth but it is hoped that thelaunch of a stand-alone marketing campaign for PartyCasino will also increasethe number of dedicated casino players. The number of unique active players inthe quarter increased by 46% year on year and by 9% versus the previous quarter,reflecting the popularity of the Group's casino games among its poker players.Yield per active player day increased for the fourth consecutive quarter to$39.0, driven by the introduction of new and improved slot machines as well asseasonality. Sports Betting The positive trends in sports betting continued into the fourth quarter withtotal revenue up by 21% over the previous quarter and up by 50% over theprevious year to $5.1m (2006: $3.4m) on the back of both higher betting volumesand higher gross win margins. Gross win margins in the period increased to 6.0%(Q3 07: 5.6%) and would have been even higher had it not been for someunfavourable Champions League results in December 2007 which impacted mostbookmakers. Betting volumes also continued to increase, up by 34% quarter onquarter to $115.6m due to a concerted marketing push behind PartyBets,seasonality and a substantial increase in the number of live bettingopportunities for customers. 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 January 2008, trading has been in line with management'sexpectations. Average gross daily revenue had increased by 1% from thatachieved in the fourth quarter to $1,681,900 (Q4 07: $1,661,300). In poker, newplayer sign-ups averaged 1,341 per day, and there were on average 66,760 activeplayers per day generating average gross daily poker revenue of $1,021,700, a 5%increase over the fourth quarter of 2007 (Q4 07: $970,500), with average grosspoker revenue exceeding $1.0 million per day for the first time since theenactment of the UIGEA. Bonuses and PartyPoints deducted from gross revenue arecurrently tracking between 14% and 15% of gross poker revenue, down from 19% inthe fourth quarter. In casino, the amount bet per day showed a small increasefrom the level seen in the fourth quarter but average gross daily revenue haddecreased to $589,100 (Q4 07: $615,100) due to a fall in the house win. Insports betting the amount bet per day increased by 9% versus the fourth quarterof 2007 but gross win per day fell by 6% to $71,100 per day (Q4 07: $75,700) dueto a fall in the gross win margin to 5.2% (Q4 07: 6.0%). The Group's preliminary announcement of results for the year ended 31 December2007 will be made on 5 March 2008. Commenting on the Group's full year revenues and fourth quarter KPIs, MitchGarber, Chief Executive Officer, said: "We are delighted to have delivered another strong performance. We continue tobuild on the four pillars of our strategy: growing the player base, localisingthe customer offer and broadening the product base whilst acting responsibly andthis strategy continues to deliver strong financial results. These results showthat we have built a solid platform for growth in the post-UIGEA world and weremain confident about the Group's future prospects." Contacts: PartyGaming Plc +44 (0)20 7337 0100Peter Reynolds, Director of Investor RelationsJohn Shepherd, Director of Corporate Communications Financial Dynamics +44 (0)20 7831 3113Edward Bridges / Juliet Clarke Conference call Wednesday 30 January 2008 For analysts and investors there will be an opportunity to put questions toMitch Garber and Martin Weigold, Group Finance Director, by way of a conferencecall at 09.30 GMT. The details of the call are as follows: Dial-In No: +44 (0) 1452 562 815Password: PartyGamingReplay no: +44 (0)1452 550 000 (available for 1 week)Replay passcode: 29234697# Appendix Poker* - Key Performance Indicators - Continuing operations Three months to 31 December % % change change versus versus 2007 Q3 2007 prior year 2006-----------------------------------------------------------------------------------------------------------------Active player days (m) 6.1 9% 33% 4.6Daily average players (000) 66.0 7% 33% 49.8Yield per active player day ($) 12.0 (9%) (6%) 12.8Yield per unique active player in the quarter ($) 150.0 (14%) (13%) 173.0New real money sign-ups (000) 118.6 7% (9%) 130.4Unique active players during the period (000) 483.8 13% 42% 340.1Average daily revenue (excluding skins) ($000) 788.9 (3%) 23% 639.5 *includes Emerging Games segment Casino - Key Performance Indicators - Continuing operations Three months to 31 December % % change Change versus versus 2007 Q3 2007 prior year 2006------------------------------------------------------------------------------------------------------------------Active player days (000) 1,085.6 8% 66% 654.5Daily average players (000) 11.8 8% 66% 7.1Yield per active player day ($) 39.0 7% 54% 25.3Yield per unique active player in the quarter ($) 204.8 6% 75% 117.3New real money sign-ups (000) 12.3 9% 102% 6.1Unique active players during the period (000) 206.5 9% 46% 141.2Average daily revenue (excluding skins) ($000) 459.8 15% 155% 180.1 Sports Betting - Key Performance Indicators - Continuing operations Three months to 31 December % % change change versus versus 2007 Q3 2007 prior year 2006------------------------------------------------------------------------------------------------------------------Active player days (000) 844.1 33% (4%) 883.3Daily average players (000) 9.2 33% (4%) 9.6Yield per active player day ($) 6.1 (8%) 56% 3.9Yield per unique active player in the quarter ($) 68.5 (12%) 29% 53.0New real money sign-ups (000) 19.4 143% (2%) 19.7Unique active players during the period (000) 75.0 40% 15% 65.0Average daily revenue ($000) 55.8 23% 49% 37.5 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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