Australia continues to thrive for Sportingbet
Success in region overshadows European struggles in Q4 trading update.
Sportingbet has continued to see success from its Australian operations despite difficulties in Europe, the operator has revealed in its trading update for the three months ended 31 July.
The quarter saw Sportingbet complete the integration of Centrebet, the Australian-facing operator which it acquired last year for £130m, leading to a 93% year-on-year increase in net gaming revenues from the country. Even on a like-for-like basis the operator enjoyed a 24% NGR increase compared to the corresponding period in 2011.
However across the same time period the operator’s European revenues fell 41%, with the temporary closure of Sportingbet’s Spanish-facing Miapuesta offering ahead of the dot.es market opening one of the factors. Indeed the company’s 35-day Spanish absence could even have been longer, with an injunction from land-based operator Codere initially threatening to delay its June launch.
On a like-for-like basis, European revenues were down just 18%, however, with the sale of the company’s Superbahis business to the GVC-backed East Pioneer Corporation last November seeing revenues from Turkey fall away. Sportingbet has announced that the restructuring which followed the Turkish exit has also been completed.
Analyst Ivor Jones of Numis retained his firm’s ‘Buy’ recommendation, saying “The enlarged business is the clear market leader in Australian fixed odds online sports betting and is trading strongly,” although he did accept that “European business continues to face challenging economic conditions together with the disruptive impact of newly regulating countries and associated taxation.
“The shares remain a play on an outstanding Australian business with, in our view, a free option on the potential that the European business gets back on a growth track,” added Jones.
Nick Batram, analyst with Peel Hunt, also issued a ‘Buy’ recommendation, saying: “Australia is clearly the jewel in the crown, and the acquisition of Centrebet, which looked strategically compelling at the time, looks even better now. There are still challenges, but the shares look good value (underpinned by Australia) even before any bid speculation.”
Last October saw Sportingbet’s merger discussions with Ladbrokes come to a close amid “legacy risks”, and neither this, nor previously curtailed talks with Unibet, have been revived since.