18 Dec 2013 07:00
18 December 2013
bwin.party digital entertainment plc
('bwin.party' or the 'Company' and, together with its subsidiaries, the 'Group')
Pre-Close trading update
Directorate change
New bank facility
Key points
Ø Overall trading in the 11 weeks since 30 September 2013 has been in-line with management's expectations
Ø The partypoker/Borgata network is the leading poker network in the newly regulated New Jersey market according to data from Pokerscout.com
Ø US marketing and related launch costs of €7-10m to be incurred in 2013, in-line with previous guidance
Ø Including US-related costs, Continuing Clean EBITDA1 margin for the year ended 31 December 2013 is expected to be between 16% and 17%
Ø Outlook remains positive for 2014: new product launches, continued mobile expansion, prospects for further growth in the US and increased betting volumes during the FIFA World Cup
Ø Simon Duffy to step down as Chairman at the 2014 AGM
Ø New £50m revolving credit facility provided by Royal Bank of Scotland
Trading update
Since the end of September 2013 the Group’s performance has been in-line with management’s expectations with 52% of average net daily revenue coming from nationally and/or taxed markets2. Gross win margins in sports betting have remained strong, with betting volumes slightly lower reflecting a reduced sporting calendar during the international series of football matches in November. Mobile remains an important channel representing approximately 25% of sports average daily net revenue in the period. An all-new version of our sports mobile product went live in Spain on 16 December and will be rolled out to our other markets during the first half of 2014.
In poker, revenues have grown since the introduction of our new poker client that is now available to approximately 65% of our customers, as well as from the launch into New Jersey where our network is the market leader based on the number of cash game players according to data from Pokerscout.com. Our iOS applications for poker and casino are ready to launch in New Jersey as soon as they receive the requisite approval from the regulator which we hope will be received shortly.
Casino has also benefited from the launch into New Jersey and with a much improved mobile offer in our core markets in Q1 2014, we expect to see further casino growth through this channel.
Bingo net revenue has improved versus the previous quarter with a steady recovery in performance in both the UK and Italy while Spain remains relatively small.
Including US marketing and launch-related costs of between €7m and €10m in the current year (of which €1.5m was expensed during the first half of 2013), it is expected that in the year to 31 December 2013 Continuing Clean EBITDA margins for the Group will be between 16% and 17%, assuming a normalised gross win margin in sports betting between now and the end of the year.
Directorate change
Simon Duffy, Non-Executive Chairman, has informed the Board that he does not intend to stand for re-election at the Company's next AGM to be held in May 2014, allowing plenty of time for the independent Directors to conduct a formal search process for his successor.
Commenting on today's announcement, Simon Duffy said:
"By the time I depart the Board in May next year I will have served as bwin.party's Chairman for more than three years. As Non-Executive Chairman I was tasked with overseeing the integration of bwin and PartyGaming following the announcement of their merger in 2010 and I am pleased to say that many of the strategic objectives positioning bwin.party for future growth have now been achieved. The most recent milestone was the successful re-entry into the United States with the launch of real money gaming poker and casino services along with our partner in New Jersey, the Borgata Hotel Casino and Spa.
"The Group has faced numerous challenges over the past three years, but most of them are now behind us and I am confident that, under the leadership of Norbert Teufelberger, bwin.party is well-placed to return to growth by capitalising on its strong market position, leading brands and proprietary technology."
New bank facility
The Group, via one of its UK subsidiaries, has secured a £50m multi-currency revolving credit facility provided by Royal Bank of Scotland. The facility will be used for general corporate purposes and has a term of three years with full repayment at maturity.
The full year results for the year ending 31 December 2013 will be announced on 13 March 2014.
Contacts:
bwin.party digital entertainment plc
InvestorsPeter Reynolds +44 (0) 20 7337 0100
MediaJohn Shepherd +44 (0) 20 7337 0100
1 EBITDA adjusted for exchange differences, reorganisation expenses, income or expenses that relate to exceptional items, and non-cash charges relating to share-based payments
2 Austria, Belgium, Denmark, France, Germany (sports betting only), Italy, Spain, UK and USA (New Jersey)