PartyGaming Second Quarter Revenue Flat
LONDON (Dow Jones)--U.K.-listed gambling group PartyGaming PLC (PRTY.LN) said Thursday that revenue was flat in the second quarter from the previous quarter, following falls in poker and sports betting revenue.
However, casino revenue was up significantly in the second quarter from the first quarter, underpinned by a "substantial" increase in the number of games offered as well as the launch of a affiliate program and major international marketing campaign, both of which commenced last month.
PartyGaming didn't provide specific revenue figures for the second quarter, which is traditionally a quieter period for the company as people spend less time on their computers as a result of longer days and warmer weather.
In April, PartyGaming booked a 22% fall in first-quarter revenue to $100.1 million from $128.9 million over the same period a year earlier, due to the significant strengthening of the dollar against the euro, pound and Canadian dollar. It was also hurt by ongoing competitive pressures in online poker, particularly from U.S. sites, issues surrounding its loyalty program as well as the consumer spending slowdown.
In 2008, PartyGaming's poker business accounted for around 53% of total earnings before interest, tax, depreciation and amortization before exceptional items. Its casino division accounted for around 46%.
PartyGaming expects interim and full-year EBITDA before exceptional items margins to be in line with the 30.5% achieved in 2008.
The trading update was broadly in line with market expectations. Daniel Stewart analyst James Hollins said it was an "encouraging trading update", noting the solid casino performance and recent poker player increase. Hollins reiterated his buy rating and 339 pence price target.
PartyGaming shares, which opened 4% higher on the London Stock Exchange Thursday morning, were up 5 pence, or 2.1%, at 246 pence at 0731 GMT. The stock has risen 26% since January on investor hopes of industry consolidation following its deal with authorities overs its defunct operations in the U.S. in April.
PartyGaming agreed to pay $105 million to the U.S., and in return the U.S. attorney's office for the Southern District of New York agreed not prosecute PartyGaming or its subsidiaries for providing Internet gambling to customers in the U.S. before the federal government's ban of the industry in October 2006.
The group will report its interim results on Aug. 28.
