32Red profit warning as Q3 fails to bridge high roller gap
32Red has been forced to issue a profit warning after it revealed that it would be unable to grow player yields sufficiently to overcome the impact of the economy on high-roller activity in the first half of the year.
32RED HAS BEEN forced to issue a profit warning after it revealed that it would be unable to grow player yields sufficiently to overcome the impact of the economy on high-roller activity in the first half of the year.
The online casino, poker and bingo company also blamed an unusually high level of customer wins in October for its announcement in a trading update today that full-year profit would be “significantly below market expectations.”
32Red recorded its highest ever quarterly revenues during the quarter, 11% up on the same period in 2008, reflecting growth in the company’s core 32Red Casino, where quarterly revenues and the number of active casino players were 10% and 16% up respectively on the same period in 2008.
However this was not enough to offset reduced player yields during the first half of the year as high-roller activity continued to be suppressed against the backdrop of the recession, the company said.
Casino gross win for October continued to be adversely affected by winning high roller players, it was also revealed.
The group however said overall activity levels remained buoyant, and that the board had dismissed reducing marketing spend to maintain short-term profitability.
32Red, which entered into a two-year shirt sponsorship deal with Swansea City football club earlier this year, said it remained confident that ongoing investment in marketing initiatives such as the Swansea City deal and in new technology “positions it well for 2010 and beyond.”
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