7th of October 2009 Author: Johnny Karp
Pretax profit rises to GBP 22 million from GBP 1.2 million in 2008
Internet gambling group Sportingbet has posted a positive set of results for the full year ended July 31st 2009, turning round a loss last year with a solid profit in the current period, mainly from better European sportsbetting action.
Net income was GBP 12.4 million ($19.7 million) compared with a loss of GBP 4.3 million in the same period a year earlier, the company announced, causing its shares to to rise by almost 10 percent. The shares have more than doubled this year, giving the company a market value of GBP 348.6 million.
Net gaming revenue rose 13 percent to GBP 163.6 million in the fiscal year, just short of analyst expectations.
Operating profit from continuing business for the year was up 26 per cent at GBP 31 million.
EBITDA rose by 28 percent over the comparable period in the previous year to reach GBP 39.7 million.
Sportingbet introduced live streaming of matches in November and is attracting more sports gamblers in Europe as it adds more betting during games. Sports betting is now responsible for 64 percent of the group's net gambling revenue, up from 52 percent two years ago.
Online poker operations did not fare as well, showing declining income due to competition, the company said.
Chief executive Andrew McIver remarked: 'Sports betting is a more hardy, recession-resilient product offer. We grew up with a sports heritage, where you don't necessarily play poker in your youth.'
McIver advised that he group will move to the London Stock Exchange's Official List from the more junior Alternative Investment Market over the next six months.
The company now offers 8 000 different bets on a typical day, up from about 1 000 a year ago, a spokesman revealed. The in-game betting option allows Sportingbet to offer 35 different wagers per game per side for an average match, he said.
In this fiscal year Greece, the company's largest market, generated gambling revenue that was up 56 percent, and in Spain, 11 percent.
Revenue from UK sources declined 21 percent because the market is so competitive, the company said, adding that it is currently up 10 percent so far this fiscal year due to increased marketing investment.
In Europe, the amount wagered on sport rose 21 percent to GBP 917.5 million, generating a gross margin up 24 percent at GBP 93.6 million. The number of sports bets rose 12 percent to GBP 57.5 million and the average size of bets increased 9 percent to GBP 15.90.
The company achieved a sports gross margin of 10.2 percent, very slightly up on the previous year.
Breaking the results down by contribution, online casino operations in Europe generated GBP 43.7 million - a 12.5 percent rise, whilst online poker revenues declined by 7.5 percent to GBP 22 million. Poker now accounts for only 12 percent of the group's revenue, down from 15 percent last time.
McIver confirmed that the company remains in 'constructive' talks with the U.S. Justice Department over its involvement in the U.S. market prior to that country's ban on Internet gaming financial transactions. The board is optimistic of a settlement, he commented, but couldn't say how big or when this might be achieved.
The company is watching developments in France as the liberalisation of the gambling market in that coiuntry progresses, and will apply for licensing when the necessary legislation has been passed.
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