Party posts solid numbers ahead of merger
PartyGaming reveals solid annual results in its last announcement as a standalone business before its merger with Bwin on 31 March.
PartyGaming’s final results before it merges with Bwin on 31 March offered several reasons to be optimistic for the new group with casino, bingo and sports betting all showing signs of growth alongside regulated markets that will become profitable at the end of this year.
The company’s overall revenue was up 15% to 357m with EBITDA up 7% on 2009, just passing the 100m mark. Casino revenue rose 15m from 136.8m in 2009 to 151.4m last year due mainly to its new in-house slot games; bingo was up 29m from 22.8m to 51.4m with both verticals supported by the contribution of its Cashcade acquisition in 2009 as well as its international expansion across Europe; while its smaller sports betting operation was up 7m from 13.2m to 20.8m. Overall poker revenues, however, continued to slump falling 11m from 136.8m in 2009 to 124.8m last year.
Its World Poker Tour brand contributed 6.5m, while its B2B network services customers generated 2.4m. WPT’s Facebook application is Facebook’s fourth largest poker application, according to Party, while its WPT Hold ’em III mobile poker application has been generated 16m downloads.
French poker numbers, however were encouraging, with second half pre-tax revenue for 2010 up 220% and post-tax revenue up 77%. Party continues to hold onto the number three position in the dot.com poker market behind US-facing Pokerstars and Full Tilt, however CEO Jim Ryan said that post merger bwin.Party would be able to combine its liquidity, brands and marketing and would be” better placed to compete”.
It currently holds a 14% market share in France, however the merger will see this double to 28% and move the combined entity ahead of Full Tilt into second position, only 2% behind Pokerstars according to the operator’s presentation this morning.
In casino, it said five of its top 10 revenue generating slots were developed in-house. Ivor Jones, analyst at Numis, said this showed the benefit of the company’s “focused, creative development effort and the opportunity to offer these, royalty-free, games to bwin players”.
Party said the merger with Bwin is on track to complete at the end of this month and that this year would present opportunities in newly regulated US and European markets. Jones added that while these opportunities could “disrupt” Party’s quarterly progression of revenue and profit they would also “establish long-term growth opportunities and progressively reduce the regulatory risk profile of the group”.
Party’s chief executive said the company had achieved its 2010 objectives growing its player base by 16% of the previous year driven mainly by its acquisition of Cashcade and its expansion into newly regulated markets that traditionally increase player volumes by two to three times as companies are able to freely advertise. Ryan welcomed more regulation and said the company was in a strong position to capitalise on new markets including Denmark, Spain, Greece and the US when it opens.
He added he expected New Jersey governor Chris Christie to veto the state’s egaming bill due to be ruled on later today, but that this “wouldn’t be bad news” as several other US states were building the momentum to regulate online gambling.
“UIGEA has failed, the market already exists and the market has grown since it was enforced. Legislation is being driven by US companies who are tired of seeing revenues flow offshore. Combine this with the need to generate tax revenue and create jobs and this will create the perfect storm. The passage of online gambling laws will happen at some point soon.”
Key stats
Overall revenue up 15% to 357m
Casino revenue up 15m from 136.8m to 151.4m
Bingo up 29m from 22.8m to 51.4m
Sports betting up 7m from 13.2m to 20.8m
Poker down 11m from 136.8m to 124.8m
World Poker Tour contributes 6.5m
B2B network services customers generate 2.4m