August 29, 2008 (InfoPowa News) — Party Gaming plc's much anticipated half yearly results were released this week, showing revenue growth in all areas as the online gambling firm continues to rebuild following the depredations of UIGEA and its exit from the US market.
Revenues in the first half of 2008 rose 17 percent to $254.8 million in line with market expectations, up from $217.4 million in H1: 2007.
Party Poker was the star performer in the group, contributing over half of company revenues, and rising 6 percent to $153.9 million due to higher yields.
Casino revenues followed the current industry trend, soaring 38 percent to $89.9 million, driven by higher player numbers and yields. The small but fast growing bingo business appears to be gaining ground, especially in the UK, and reported a leap of 82 percent in revenues to $2 million. Sports betting activities also delivered a good performance, with revenues up 36 percent to $9 million.
EBITDA (earnings before interest, tax, depreciation and amortisation) from continuing activities rose to $64.9 million, up from $36.9 million last time. The figures exclude reorganisation income and costs and non-cash charges relating to share-based payments.
Judging by statistics for the start of the new quarter, poker activity has eased slightly, but overall group performance is on target
"Our poker business continues to grow but is being held back by the continued competition from those sites that accept players from the US," said Jim Ryan, Party Gaming's CEO.
In the 8 weeks to 25 August, average gross daily revenue has been $1.6 million. Average gross daily revenue for poker has been $835,000 while for the online casino division it has been $694,100. Bingo revenue has been running at $27,600 per day, while the sports book's average gross win per day has been $44,600.
Ryan took the opportunity to announce the appointment of Rod Perry (63) as non-executive chairman with immediate effect. Perry has served as a non-executive director with Party Gaming since May 2005 and since February 2007 has been the senior independent director.
During his tenure he has also served at various times as chair of the Audit Committee, Remuneration Committee and Ethics Committee.
Party Gaming’s Board of Directors has appointed Lord Moonie, who joined the Board on 13 December 2007, as the senior independent director and chairman of the Remuneration Committee. Perry will chair the Nominations Committee.
"I look forward to working closely with Rod as we develop the Group's strategy to both grow our existing revenue streams and also to seek to exploit new opportunities over the coming months and years," CEO Ryan said. "Rod’s experience and knowledge of the online gaming sector and Party Gaming make him the ideal person to oversee the board going forward and to provide continuity following a period of a change to the membership of the board.
"On behalf of my fellow directors, I wish to thank Michael Jackson for his service to Party Gaming over the last 3.5 years."
Perry said: "I am honoured to have been selected by the board to lead Party Gaming into its next phase of development. Since becoming a public company, we have had to face and overcome a series of major challenges. Looking forward, I am excited about the opportunities that a fresh approach under Jim Ryan as CEO will bring and am confident that under his stewardship, the
management team can unlock further value for shareholders."
Party Gaming's half yearly report this week contained some interesting snippets of information about the online gambling group's plans for the immediate future.
Chief among these is an intention to offer the Party Poker product to other online poker operators on a white label basis in the near future. Chief exec Jim Ryan believes this to be a useful strategy to counter the dominance of rival poker sites that are still taking US bets. Party Gaming reversed out of the American online gambling market soon after the UIGEA was passed in late 2006, and is clearly at a competitive disadvantage as a result.
Ryan advised that there had been no further developments regarding settlement negotiations with the US Department of Justice regarding Party's pre-UIGEA operations. Talks with US officials have been taking place for over a year, with Party Gaming anxious to resolve issues in order to remove the threat of any prosecution in the United States, thus creating a more stable perception of the company.
The newly appointed non-executive chairman at Party, Rod Parry, will carry the responsibility for the talks going forward, with the hope that the matter can be concluded this year, Ryan said.
"Certainly that's our goal," he said. "To bring continuity to the Department of Justice discussions Rod Parry, our newly-appointed chairman, will be taking over the day-to-day management of the DoJ process freeing me up and allowing me to focus my efforts on daily operations," he added.
Ryan said the company has already put in place all the white label business elements that would enable the firm to compete strongly with those sites taking US bets, and would work with like minded operators to create a new poker network.
“The US sites will continue to spend their marketing dollars in Europe and we know the competitive environment is set to become even more challenging," Ryan said. "But what’s interesting is how we plan to defend ourselves.
"We are about to launch the next generation Party Poker platform in the near future along with a rebrand. The brand will become much more meaningful to the customer through our marketing and there will be an enhanced effort to improve our contact with the VIP players on Party Poker.
"We will have a team dedicated to the players who have become good at poker on our site and we want them to have an amazing experience with and not go to another site.”
Ryan's plans include the possible acquisition of unidentified companies in Europe. He told a conference call that the company was considering these opportunities, although investigations are still at an early stage.