LONDON (Alliance News) - Shares in online gaming company 32Red PLC were on the rise Wednesday, after it said that trading has picked up in recent weeks, it remains confident in the business' prospects, and it is confident in meeting financial expectations for the year.
Up until the market close Tuesday, 32Red shares had dropped by 31%, or 26.25 pence, since it issued its 2013 results on March 6. 32Red raised its full-year dividend 29% after reporting double-digit growth in profits and revenues, driven by a strong performance from its casino products, growth in mobile gaming, and contributions from its fledgling business in Italy.
At the time the group gave a positive outlook for 2014, saying it expects further growth, although it said revenue growth slowed in the first few weeks of the year against strong comparative figures.
Despite the strong report, 32Red fell on the day and continued to slide throughout the month. Analysts put the move down to profit taking after the stock performed strongly over the last year of exceptional growth.
32Red shares have recovered somewhat Wednesday, trading 11% higher at 63.50 pence Wednesday morning, after the gaming company said that trading in recent weeks has improved, with gross gaming revenues up 19% in the first 24 days in March against the corresponding period, taking the cumulative year-to-date increase to 8% as at 24 March.
32Red also highlighted that, unlike some of its betting peers, the increase in machine gaming duty announced last Wednesday by the UK government will not affect the company.
UK Chancellor of Exchequer George Osborne said in his annual budget statement last Wednesday that the government will raise duty on gambling machines, also known as fixed-odds betting terminals, to 25% from 20%. The new rate will take effect from March 1, 2015.
"The new announcements in the budget regarding increased fixed-odds betting terminal duties and levy collection do not impact the company," 32Red said in its statement Wednesday.
Last week FTSE 100 betting firm William Hill said that, based on its B2 gaming machine gross wins in 2013, the new rate, if applied during that year, would have cost the business GBP22 million.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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