Earnings and revenue hit for BWin Party as trading is mixed
July 15, 2014 9:31 am
The latest trading update from BWIN.PARTY (BPTY.L) shows mixed trading across the product range with revenue from poker and casino down, bingo flat and sports increasing. This only partly offsets the lower revenues from other products although the company says it is still confident of hitting full year targets.
currently the company is undergoing a cost cutting program in order to balance the books and have identified a further 10M Euro in addition to the 20M euro already outlined.
Key points
Revenue performance in the three months to 30 June was mixed with solid performance in sports, which grew year-on-year, partially offsetting a soft performance in poker and casino. Bingo remained broadly flat versus the previous year despite challenging competitive conditions in the UK and Italy
Since the end of June, volumes and gross win margins from the FIFA World Cup have been strong and overall the tournament performance has been in-line with management’s expectations
Mobile/touch continues to grow strongly and in the three months to 30 June 2014 represented approximately 35% of sports betting gross gaming revenue (Q2 2013: 21%) and 21% of gross gaming revenue overall (Q2 2013: 9%)
Nationally regulated and/or taxed markets represented approximately 56% of total revenue in the second quarter of 2014 (Q2 2013: 52%)
Several new product initiatives are now live including mobile products for sports betting, poker, casino and bingo
The Board expects to deliver additional cost savings in 2014 of €10m in addition to the €20m of cost savings that have already been announced and consequently remains confident in full year outlook
Further potential cost savings to be delivered in 2015 have been identified by management, details of which are expected to be announced with the half year results on 29 August 2014
“Trading in the second quarter was mixed with revenue a little softer than expected but Clean EBITDA margins wereslightly better than expected. While the decline in the dotcom poker market in the period also affected our casino business, the impact was mitigated by an uplift in player activity in sports betting in nationally regulated and/or taxed markets, largely driven by the FIFA World Cup. The UK bingo market has remained highly competitive ahead of the introduction of a point of consumption tax later this year, but our Foxy Bingo brand has maintained a leadership position and our new mobile offering has been well received.
“As expected, the start-up losses in New Jersey, ISP blocking in Greece and the absence of domain sales in the first half have impacted both the revenue and Clean EBITDA performance versus the prior year. However, we are taking steps to improve operating performance, simplify decision-making, reduce complexity and costs and, as a result, remain confident about the full year outlook.”
The latest trading update from BWIN.PARTY (BPTY.L) shows mixed trading across the product range with revenue from poker and casino down, bingo flat and sports increasing. This only partly offsets the lower revenues from other products although the company says it is still confident of hitting full year targets.
currently the company is undergoing a cost cutting program in order to balance the books and have identified a further 10M Euro in addition to the 20M euro already outlined.
Key points
Norbert Teufelberger, CEO of BWIN.PARTY, said:
“Trading in the second quarter was mixed with revenue a little softer than expected but Clean EBITDA margins wereslightly better than expected. While the decline in the dotcom poker market in the period also affected our casino business, the impact was mitigated by an uplift in player activity in sports betting in nationally regulated and/or taxed markets, largely driven by the FIFA World Cup. The UK bingo market has remained highly competitive ahead of the introduction of a point of consumption tax later this year, but our Foxy Bingo brand has maintained a leadership position and our new mobile offering has been well received.
“As expected, the start-up losses in New Jersey, ISP blocking in Greece and the absence of domain sales in the first half have impacted both the revenue and Clean EBITDA performance versus the prior year. However, we are taking steps to improve operating performance, simplify decision-making, reduce complexity and costs and, as a result, remain confident about the full year outlook.”
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