Crypto boss resigns amid deepening losses
Brian Hadfield steps down as chief executive of Cryptologic to be replaced by chairman David Gavagan on a temporary basis as losses widen and the business announces it will cut staff at the end of this year.
Cryptologic CEO Brian Hadfield has resigned with immediate effect following poor second quarter results, continuing losses and slow progress being made to restructure the business, the company announced this morning. Chairman David Gavagan will step in as interim chief executive to oversee further restructuring and a plan to cut the company’s workforce at the end of this year. Hadfield joined as CEO in February 2008.
Total revenues declined from US$7.6 million in the first quarter of this year to US$6.7m in Q2 reflecting a change in accounting estimate relating to the amortisation of certain pre-paid royalties and continued difficult trading it said in a statement this morning.
The firm posted a net loss of US$12.7m compared with a loss of $3.2m the previous quarter. Branded games revenue increased from US$1.3m to US$1.5m but poker and other revenues fell from US$1.3m to US$0.7m in the second quarter of this year.
Cryptologic’s first quarter results for 2010 were equally disappointing with the firm at the time blaming the decline on subdued wagering and reduced contribution from major licensee William Hill Online (WHO). Major licensee William Hill Online entered into a joint venture with rival software provider Playtech in October 2008, resulting in a fall in the revenue stream from WHO to Cryptologic. Cryptologic posted a net loss of US$3.2m for the period, compared to a net loss of US$1.3m for the same quarter in 2009.
“In the light of continuing difficult trading conditions, a further restructuring is being implemented to reduce significantly the cost base including a reduction in the total workforce by the end of Q4 2010,” the company said in the statement.
“Following a review by a leading firm of industry consultants announced previously, a number of measures are being implemented to improve the performance of the hosted casino business,” it added.
In further restructuring the company said Huw Spiers would join the company and assume the role of chief financial officer from August 15.