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9 Jul 2009 07:00
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9Β JulyΒ 2009
PartyGaming Plc
Launch of INTRALOT Poker
Pre-closeΒ Trading Update
As part of the Group's agreement signed just three months ago with INTRALOTΒ S.A.Β ('INTRALOT'), we are pleased to announce the launch of the www.intralot.itΒ poker site.Β Β Following the receipt of certification from the Italian regulator, AAMS, the INTRALOT poker service is now being rolled out and will join the Groupβs Italian poker network.
While the Group's Italian poker network has only been operating a few weeks, with the expected introduction of poker cash games before the end of the year, the Board is hopeful thatΒ ItalyΒ will prove to be a profitable and exciting regulated online gaming market in the medium to long-term.
Pre-CloseΒ TradingΒ Update
SinceΒ 6Β April 2009,Β GroupΒ revenueΒ hasΒ remained robust and despite the impact of seasonality, is in line with that achieved inΒ the first quarterΒ of 2009.
Casino revenue has shown a significant increase from the first quarter despite a fall in casino active player days due to seasonality and lower levels of cross-sell from poker.Β Β This revenue growth has been driven by the Group's main casino site, PartyCasino, which accounts for over 70%Β of the Group's casino revenue, and continues to perform strongly on the back of a substantial increase in the number of games offered as well as the launch of a dedicated affiliate programme and major international marketing campaign, both of which commenced last month.
As expected, poker has seenΒ aΒ marginalΒ reduction inΒ active player daysΒ versus the first quarterΒ due toΒ seasonalityΒ andΒ continuedΒ strongΒ competition from US-facing sites. However,Β anΒ enhancedΒ player loyalty programme, improvedΒ player promotionsΒ and aΒ new offlineΒ marketing campaignΒ saw each of these metrics improveΒ last month. As a resultΒ of these initiatives,Β pokerΒ yields haveΒ been softer than in the first quarterΒ due toΒ increased bonus and player loyalty costs,Β resulting in a reduction in poker revenueΒ versus the first quarter.
Sports bettingΒ revenueΒ wasΒ down on the previous quarter reflecting a reductionΒ inΒ betting volumeΒ due toΒ the end of theΒ season for EuropeanΒ football, that remains the single most popular sport for betting customers.
Whilst bingoΒ is currentlyΒ small in the context of the Group, we believe it represents a significant opportunity with the global online bingo market estimated at $1.5Β billion per annum. The B2B deals signed over the past few monthsΒ withΒ CIRSA,Β DMΒ plcΒ and Channel 5Β are expected toΒ benefitΒ bingoΒ revenuesΒ during theΒ fourth quarterΒ of 2009.
In an effort to capitalise uponΒ theΒ recentΒ seizuresΒ of player fundsΒ fromΒ US-facing sites by the United States Attorney's Office of the Southern District of New York,Β the GroupΒ hasΒ chosen toΒ increase itsΒ marketing spendΒ in certain territoriesΒ and,Β whilstΒ this hasΒ alreadyΒ had aΒ positiveΒ impact onΒ player numbers,Β itΒ isΒ alsoΒ expected to lead to distribution costs beingΒ slightlyΒ higher than our previousΒ full yearΒ guidanceΒ of 38-40% of net revenue. However, continued cost savings and favourable currency movements have meant thatΒ lower staff and overheadΒ costs have mitigated the increase in marketing costs and consequently,Β Clean EBITDA1Β marginsΒ forΒ bothΒ half yearΒ andΒ theΒ full yearΒ resultsΒ areΒ stillΒ expected to be in line with that achieved for the full year in 2008.Β
The Group's interim results will be announced on 28Β August 2009.
Commenting on today's announcement,Β Jim RyanΒ CEO said:
"The Group's strategyΒ remains on-track and I am pleased that many of the seeds we have sown over the past year are now beginning to bear fruit. TheΒ improvements to our poker product and loyalty programme, theΒ addition of INTRALOT to our Italian poker networkΒ and the launchΒ this weekΒ ofΒ bingo and casinoΒ for DM plc areΒ clear examplesΒ of this. PartyCasino, the world's largest online casino, continues to go from strength to strength, with strong double digit growth quarter-on-quarter despite difficult economic conditions. WeΒ look forward to the rest of the year with confidence."
1EBITDA before payments associated with the Group's Non-Prosecution Agreement, reorganisation costs and non-cash charges relating to share-based payments.
Contacts:
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PartyGaming Plc |
+44 (0)20 7337 0100 |
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Peter Reynolds,Β GroupΒ Director, Corporate Affairs |
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John Shepherd, Director of Corporate Communications |
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