|Stock Talk Stock tips, opinions and analysis|
| ||LinkBack||Thread Tools|
Sportingbet Plc Unaudited results for the second quarter ended 31 January 2008
Sportingbet Plc, a leading online sports betting and gaming group, announces its
results for the second quarter ended 31 January 2008.
( for all the numbers go to this link - Market News )
• Amounts wagered up 29.5% to £364.7m (2007: £281.6m)
• Group operating profit* up 275% to £7.5m (2007: £2.0m) in the quarter -
£11.7m year to date (2007: £4.0m)
• Operating profit* at 18.2% of net gaming revenue (2007: 5.8%) versus
stated target of 13%
• Cash on the balance sheet, net of customer liabilities, of £32.0m (2007:
• Statutory Group operating profit of £3.6m (2007: loss of £0.1m)
• Diluted earnings per share* of 1.4p (2007: 0.5p)
(* stated before charging exceptional items, fair value restatements and
• Strong growth in net gaming revenue across the portfolio
o Sports up 29.6% year on year
o Casino up 29.1% year on year
o Poker up 34.1% quarter on quarter
• Growth delivered through both incremental betting volumes (amounts
wagered on sports in Europe up 35.3% year on year) and yields per player
• Restructuring benefits demonstrated by significantly enhanced operating
• Acquisition of Bulgarian marketing partner for an initial consideration
of £4.0m and deferred consideration of up to £7.2m
• Management team strengthened - all key positions now filled
Commenting on the results, Andrew McIver, Chief Executive, said:
"We are pleased with the performance and continued development of the business
in the second quarter of this financial year. With six months of the year
completed we have achieved an operating profit of £11.7m versus £4.0m last year.
This has not been achieved by especially favourable outcomes to sports events -
the margin percentage is actually slightly lower than last year - but rather
from strong growth in turnover from our core sports offering and careful cost
Whilst these results are ahead of where we expected to be at this stage, with a
fourth quarter dominated by one major event this year, Euro 2008, we are happy
to bank the strong performance in these results against the second half and
remain confident for the full year's out-turn."
For further information please contact:
Sportingbet Plc Tel: 020 7184 1800
Andrew McIver, Group Chief Executive
Jim Wilkinson, Group Finance Director
Simon Gregory, Director of Business Development
George Hudson Tel: 020 7903 0669
There is a presentation for analysts and investors today at 11.00 at the offices
of Sportingbet Plc, 45 Moorfields, London EC2Y 9AE. In addition, there will be
a live audio webcast available at Home - Sportingbet plc - Sportingbet plc Internet gaming Socially responsible internet gaming. Registration will be
made available 10 minutes prior to the presentation start time.
Highlights and commentary on the results for the six months to 31 January 2008
are included at the end of this announcement.
Second quarter ended 31 January 2008
Amounts wagered (previously disclosed as turnover) for the second quarter ended
31 January 2008 were £364.7m (2007: £281.6m), earning net gaming revenue
(previously disclosed as gross profit) of £41.2m (2007: £34.4m) at 11.3% of
amounts wagered (2007: 12.2%).
Amounts wagered on sports betting in Europe grew by 35.3% to £212.4m (2007:
£157.0m), earning net gaming revenue of £20.5m (2007: £16.9m). Casino and
gaming, and poker contributed a further £9.9m and £6.1m respectively to both
amounts wagered and net gaming revenue (2007: £7.7m and £7.2m). Amounts wagered
on Australian sports betting grew by 24.2% to £136.3m (2007: £109.7m), earning
net gaming revenue of £4.7m (2007: £2.6m).
Amounts wagered and net gaming revenue for the three months are stated after a
deduction for customer bonuses of £3.8m (2007: £1.5m). The European and
Australian sports net gaming revenue % as reported was 9.7% and 3.4%
respectively (2007: 10.8% and 2.3%). Without the bonus deduction the equivalent
numbers would have been 10.5% and 3.6% (2007: 11.1% and 2.4%). The increase in
European customer bonuses reflects, in part, the bringing in-house of certain
marketing partners together with an increased focus on customer retention and
driving customer yields.
As per quarter one, prior period casino net gaming revenue has been reduced by
£0.3m reflecting progressive casino jackpot contributions which have been
reclassified from marketing expense to be set against casino net gaming revenue.
The above adjustment has no effect on the Q2 comparative operating profit.
Costs (excluding exceptional items, fair value adjustment and amortisation) in
the three months were £33.7m (2007: £32.4m), accounting for 81.8% of net gaming
revenue (2007: 94.2%).
Operating profit (before exceptional items, fair value adjustment and
amortisation) for the three months was £7.5m (2007 restated: £2.0m). Exceptional
charges, amounting to £1.0m (2007: £nil), were incurred during the three months
relating to final payments under the previously announced reorganisation
Operating profit after charging exceptional items of £1.0m (2007: £nil), fair
value restatement of £1.8m (2007: £2.1m), which comprises the share option
charge, and amortisation of £1.1m (2007: £nil) was £3.6m (2007: loss of £0.1m).
As at 31 January 2008, the Group had £47.6m (2007: £49.7m) of cash and liquid
resources on its balance sheet, of which £15.6m (2007: £14.2m) related to
customer liabilities. Gross financial liabilities amounted to £5.3m (2007: £nil)
which comprised bank loans secured on residential properties in the Channel
REVIEW OF OPERATIONS
The Group performed particularly well in the second quarter with substantial
growth seen across all products and in both reporting regions. Growth was driven
by increased volume of both players and bet numbers leading to a significant
increase in the amounts wagered, particularly on sports. A number of product
initiatives within our sportsbook offering have been implemented during the
period aimed at providing customers with a broader product offering and
increasing the speed and efficiency of customer bet settlement. These
initiatives and further planned infrastructure developments are aimed at keeping
our sports betting product at the forefront of the industry.
Casino and Games have shown strong growth over both the prior year and previous
quarter. This is a result of the work that has been done to upgrade these
products including the introduction of superior slot based products. Quarter on
quarter, poker has also shown improvement. As we move through the second half we
will focus our marketing spend on our core sports betting products ahead of the
major Euro 2008 Championship.
With the majority of the Group's restructuring completed we are now in a
position to increase our focus on our customers, both existing and prospective.
To this end, we have, during the quarter, recruited a new director of marketing
and a new director of sales. These senior management appointments will lead a
renewed marketing initiative to both leverage our existing customer base whilst
seeking the selective acquisition of new profitable players.
The number of customers who bet on the region's sports betting websites in the
quarter rose by 9.0% to 222,036 (2007: 203,653).
The number of sports bets placed by these customers increased by 18.8% to 15.7m
(2007: 13.3m) at a rate of 71 bets per active customer per quarter (2007: 65
bets), and the average sports bet size was £13.63 (2007: £11.90). The sports
margin percentage after betting tax was 10.5% (2007: 11.1%).
In aggregate, yield per sports active customer increased by 18.4% from £85.85 to
£101.61 as a result of both increased frequency of bets and a marginally higher
bet size. This reflects the impact of better customer marketing techniques
driving increased activity and better customer retention.
The number of bets placed on the Group's casino website rose by 39.1% to 52.7m
(2007: 37.9m) at an average bet size of £4.33 (2007: £4.74). The casino margin
percentage was 3.5% (2007: 3.3%). The change in these dynamics reflects the
continued change in product mix within the portfolio over the last year, towards
higher margin slot machine play over and above table games such as blackjack and
roulette. This change in mix reflects our improvement of the Group's slot type
During the quarter the European region generated, pre bonus deductions, £6.8m of
poker rake (2007: £7.6m), down 10.6% year on year.
Australia made a significant contribution to the Group's performance in the
quarter with both strong volumes and a higher than average sports margin
percentage. This result was particularly pleasing in light of the continued
restrictions on horse racing in both Queensland and New South Wales through a
good portion of the quarter, as a result of the Equine Influenza outbreak.
The Australian business comprises two distinct components: the historic credit,
telephone-based business, and a cash-in-advance internet-based business that the
Group has been building over recent years. Typically, internet customers are
more frequent bettors and generate a higher margin, but have a much lower
average stake size. During the quarter, the proportion of bets taken over the
internet rose to 87% (2007: 81%), generating 41.1% (2007: 40.5%) of net gaming
Overall the number of Australian customers increased by 45.9% from 12,370 to
18,050. Margin for the region, after betting taxes, was 3.6% (2007: 2.4%),
amounting to gross gaming revenue of £4.9m (2007: £2.7m).
Within the internet business, the number of bets increased by 50.9% with an
average bet size of AUS $38 (2007: AUS $39) and a margin of 5.5% (2007: 4.7%).
Within the telephone business, the number of bets increased by 1.1% with an
average bet size of AUS $662 (2007: AUS $635) and a margin of 2.7% (2007: 1.9%).
Over the past year the Group has significantly reduced its reliance on marketing
partners through the bringing in-house or the purchase of operations in
Scandanavia, Italy and Turkey.
In line with this strategy, Sportingbet today announces that it has agreed to
acquire the business and assets of Belmond International Limited, the Group's
Bulgarian marketing partner, for an initial consideration of £4.0m and deferred
consideration of up to £7.2m. The initial consideration will be payable in cash
on completion, whilst the deferred consideration is wholly dependent on the
performance of the Bulgarian business over the next 18 months and is payable 50:
50 in cash and shares. The maximum number of shares to be issued under the
deferred consideration will be 14,845,361. The issued share capital at the date
of this announcement is 464,768,970 ordinary shares. The fully diluted share
capital, including the full earn-out in relation to the Bulgarian transaction is
535,848,921 ordinary shares.
The Bulgarian marketing partner has operated in partnership with Sportingbet
since August 2004. During this time, the Group's Bulgarian business has grown to
become the Group's sixth biggest domain. During the year ended 31 December 2007,
the assets being acquired generated a profit for the partner of £1.2m and are
being acquired on a working capital neutral basis. The Group intends to invest
heavily in this market prior to Euro 2008 and thereafter expects the acquisition
to be enhancing to earnings in the 2008-09 financial year.
Spain, Greece and certain Eastern European states remain under the marketing
partner model. Where the opportunity arises to take further control of these
markets on acceptable terms, the Group will continue to do so.
During the period key appointments were made to fill the remaining vacant Board
positions. Peter Dicks returned to the Board as Non-Executive Chairman, having
previously held the position from January 2000 to 14 September 2006. In
addition, Jim Wilkinson joined the board as Group Finance Director having
previously been Group Finance Director of Johnson Service Group plc from 2004
There have been no substantive changes in the regulatory environment during the
As previously stated, there is still no global consensus as to which countries'
laws apply where in the internet space, and in particular whether they can
extend beyond their own national borders. Additionally, within Europe, companies
in the online gaming sector may face action from individual EU Member States
despite the fact that legislation of such Member States may contravene EU
principles and/or the Member State itself may be subject to an EU Commission
initiated online gambling infringement proceeding.
Consequently, the Group's services continue to be provided only from
jurisdictions that are licensed and regulated and as such explicitly legal. To
facilitate this, the Group is licensed in the UK, Alderney, Italy, Antigua and
The Board is pleased with the performance of the Group for the first six months
of this financial year, generating operating profit of £11.7m. This performance
has been driven by strong fundamentals of higher betting volumes and turnover.
The third quarter has started well. This continued solid performance coupled
with the strong first half profitability gives the Board continued confidence in
the financial outcome for this financial year and beyond.
no matter where you go, there you are ...
"And remember, no matter where you go, there you are." .óConfucius
AL 29:11 Just Win Baby
|Thread||Thread Starter||Forum||Replies||Last Post|
|On The January 2008 NCAAW Hardwood||EveryGamblersDream||Basketball Court||27||02-09-2008 03:43 PM|
|On The January 2008 NCAA Hardwood||EveryGamblersDream||Basketball Court||8||01-17-2008 07:07 PM|