10 Jul 2013 07:00
10 July 2013
bwin.party digital entertainment plc
('bwin.party' or the 'Company' and, together with its subsidiaries, the 'Group')
Pre-close trading update
Highlights
Norbert Teufelberger, CEO of bwin.party, said:
"Trading in the year-to-date reflects our shift from volume to value, the introduction of a turnover tax in Germany in July 2012, as well as some issues we faced following the migration of bwin.com customers in December 2012, all against a challenging competitive and market backdrop. However, the process to optimise the shape and size of our business, with a greater focus on regulated and to-be-regulated markets, is on-track and we remain focused on returning our business to growth.
"While the revenue performance was down on last year, we remain on course to deliver the targeted €70m of cost savings in 2013 with more to follow in 2014. During the second half we expect to roll out our new real money and social gaming products as well as, regulations permitting, the launch of our poker and casino games in New Jersey."
Trading
The Group's revenue performance since the beginning of April 2013 was softer than expected due to a lower than expected gross win margin in sports betting during April and June as well as competitive pressures in bingo. Ahead of the launch of our new poker product, the trends seen in Q1 in casino and poker continued during the second quarter. Whilst we retain a leadership position in our two largest markets, competitive pressures in both the UK and Italy have continued to hold back our bingo business.
Our cost reduction initiatives remain on-track and we are set to deliver €70m of savings in 2013, with more to come in 2014.
Product development
We are testing the new version of our poker product, a process that will run for the next few weeks before a full launch during August 2013 when we also expect to launch a new social sports betting application that is currently being tested in a closed environment on Facebook. Kalixa, our payments business, will launch a new service on both iOS and Android in August, enabling consumers to make contactless mobile payments. Additionally, Kalixa Pro, our service for small and medium-sized businesses, will launch its mobile point-of-sale product in September, enabling the making and acceptance of card payments anywhere and at any time.
US update
Together with our partners, we are making good progress towards ensuring that we will be ready to launch poker and casino products into New Jersey as soon as the market regulates. We are on-track to submit our licence application ahead of the deadline at the end of this month.
Having published draft regulations in May, we expect that these will be finalised by the Division of Gaming Enforcement following the summer and that the market will open as planned at the end of November 2013.
Separately, at the end of June 2013 the Group successfully concluded an outstanding legal claim made by the State of Kentucky for $15m, resolving the only remaining litigation involving the Company that stemmed from its pre-UIGEA US activities. The settlement was fully provided for in the Group's 2012 balance sheet and was paid in June 2013.
Half year results
The Group's results for the six months ended 30 June 2013 will be announced on Friday, 30 August 2013.
Contacts:
bwin.party digital entertainment plc
InvestorsPeter Reynolds +44 (0) 20 7337 0100MediaJohn Shepherd +44 (0) 20 7337 0100