Gala Interactive numbers decline
Group posts overall increase in turnover " CEO calls for caution due to financial crisis.
A minor increase in Coral Interactive’s gross win failed to prevent an overall decline in the Gala Coral’s online profit, which fell 7% in the three months ending 14 January 2012, though its land-based and Italian operations allowed the group to post an increase in turnover and gross profit.
Gala Interactive, that comprises Gala bingo and casino, saw gross win fall 13% year-on-year, down to £15.3m for the quarter, despite an increase in actives, which rose 39% due to improved player retention and reactivation. Lower amounts staked by players led to a drop in amounts wagered, down from £291.2m to £275.6m, and an overall decline in turnover for the division down 18% to £13.1m.
Coral Interactive, however, posted slight growth, with gross win up 3% to £81.5m and amounts staked up 1% from £205.2m to £206.4m, though the results included Eurobet.com, which was closed in Q4 2011. However, this failed to prevent a decline in turnover, which fell 3% to £7.7m.
This led to an overall decline in profit for the combined online divisions, in the process of being relocated to Gibraltar, which fell 7% from £22.7m to £21.2m, and a 10% fall in EBITDA. This was due to a 13% drop in Gala Interactive profits, with Coral’s 9% rise to £7.2m unable to offset the decline.
Revenues from Gala Coral’s Italian online and retail operations were more positive, with turnover up 57% to £22.1m due to higher amounts staked and improved gross win margins on sports betting. Gross win from other products grew by £2m, but the group admitted growth had been “disappointing,” due to the registration process for licensees and a delay in the legalisation of new products.
Despite the continuing online decline, the group’s overall results for the quarter showed signs of improvement, with turnover up £352.8m “ a year-on-year increase of 4%. Gross profit also grew, up 6% to £271.5m, while EBITDA remained flat at £78.4m. The company, which has a net debt of around £1.3bn, is currently in talks with Rank Group to sell its 24 UK casinos to the rival operator for up to £250m.
Commenting on the results, group CEO Carl Leaver (pictured) said he was “pleased” with Gala Coral’s progress, but called for caution of the effect of the ongoing financial crisis on the company:
“We are pleased with the progress in trading since our last update, with continued positive momentum across all of our businesses, helped by a much milder winter. We are particularly pleased with the strong growth in OTC staking levels in Coral and the excellent growth shown by the Bingo business year to date.
“The recent weeks have been more challenging, however, due to the adverse weather, and we continue to be cautious about the impact of the economic outlook on our businesses. Accordingly, whilst these first quarter results put us on track to meet our growth targets across all of our businesses in 2012, we have put robust profit protection plans in place,” he explained.