Sportingbet second quarter: strong growth, profit up

STRONG growth in its European sportsbook and global in-play betting helped Sportingbet report a 22% year-on-year rise in net gaming revenue (NGR) to £52.6m for the three months to 31 January 2010, from £43.0m in the same period last year.

The in-play specialist’s adjusted operating profit grew 8% to £11.2m, from £10.4m.

Chief executive Andy McIver said: “The second quarter is a busy time in the sporting calendar and consequently a material period in the Group’s financial year. As such it is very pleasing to report results in line with our full-year plan, particularly given the recessionary backdrop in many of our markets.”

Amount wagered on sports in Europe during the period increased 27% year-on-year (YoY) to £292.4m, from £230.6m, with in-play betting accounting for 60% of the total value of bets placed in the region.

Amounts wagered on live betting in that market increased 44% year on year, generating total NGR of £18.2m and equating to a gross margin of 10.2%.

European casino and games gross revenue also performed solidly, growing 10% YoY to £12.9m, from £11.7m.

The Western Europe sub-region proved the star performer, revenue growing 26% YoY. This was driven by 93% growth in the group’s German business, balanced against resilient growth at the company’s Greek and Spanish businesses in the face of recession, where revenues grew 13% and 11% respectively.

Eastern Europe however performed less strongly, NGR declining by 4%.

There was strong growth the group’s Australia business, where relaxation of Australian advertising regulations in September 2008 continued to drive revenues and customer acquisition.

Amounts wagered in Australian increased 27% YoY, from £151.7m to £191.9m, while active customer numbers rose by 8%.

Football bets continued to dominate those placed, representing 64% of Sportingbet’s overall sports revenue and 77% of European sports revenue during the quarter.

The group’s quarterly performance took the operator’s NGR for the first half of the year to £101.2m, a 24% rise on the £81.6m recorded for the same period last year.

On the regulatory front, Sportingbet said it continued to monitor developments in France, which contributes 3.5% of Sportingbet’s NGR, and Norway, which contributes less than 0.5% of group NGR.

With Norway due to enforce legislation prohibiting payment processing to online gaming operators not licensed in Norway on 1 June 2010, the board said it would make a decision regarding its strategy regarding that territory in advance of that date.

“Good progress” is being made in Sportingbet’s move from the Alternative Investment Market (AIM) to the London Stock Exchange’s main list, the company said in a statement.