Livermore Regulatory News (LIV)

10 Oct 2005 07:00

Empire Online Limited10 October 2005 10th October 2005 Empire Online Limited Q3 Trading Update "Strong Network Growth Continues" Empire Online Limited (the "Company" or "Empire Online"), a leadingmulti-channel on line gaming network and marketing services company, todayprovides the following trading update for the third quarter of 2005. Trading Trading has been very strong for the third quarter. • Number of new real money players have risen to 53,148 for Q3 2005, which represents an increase of 62% over Q3 2004 and 24% over Q2 2005. • Net gaming revenues of US$31.4 million, which have increased by 71% on Q3 2004 and 24% on Q2 2005. Estimated net operating profit of US$16.1million, which has increased by 43% on Q3 2004 and by 30% on Q2 2005. • Number of active players (players who played for real money during the last 90 days) has increased to 173,901 for Q3 2005, which represents an increase of 153% over Q3 2004 and 37% over Q2 2005. • Cost per acquisition of new real money players has been maintained at the lower end of the normal range at US$ 236. During the third quarter of 2005 the Company completed the acquisition of thecasino and poker brands known as "Club Dice" and "Noble Poker". Sinceacquisition the Company has made a significant effort to build both brands,which will continue through the final quarter of this year. Both of these brandsare supported by the, well respected, Playtech software platform. Theseacquisitions have been integrated successfully and are now contributing stronglyto the Company's growth in new real money players for both poker and casino. These new brands, together with the newly developed backgammon platform willprovide a more diversified range of products and are expected to contributesignificantly to the future growth of the Company. Since the beginning of Q4 2005, the Company has acquired more than 40% of itsnew real money players with these new brands. As announced within the AIM admission document published by Empire Online, theCompany intends to pay a final dividend of US$20m, which will make a full yeardividend of US$30m for the current year. Going forward, the Company intends tomaintain a policy of a dividend payout ratio of 50% of its earnings. Key financial highlights (See Note 1) include: • Strong net gaming revenues of US$31.4 million (Q3 2004: US$18.3million; Q2 2005: US$ 25.3 million); • Poker revenue of US$23.0 million (Q3 2004: US$ 13.5 million; Q2 2005:US$20.2 million). • Casino revenue of US$ 8.4 million (Q3 2004: US$4.8 million; Q2 2005:US$ 5.1 million). • Estimated net operating profit of US$16.1 million (Q3 2004: US$11.3million; Q2 2005: US$ 12.4 million) • Net operating profit margins were 51.3%, which represents an increaseof 2.2 percentage points on the net operating profit margin of 49.1% for Q22005. Key performance Q3 2005 Q3 2004 Change Q2 2005 Changeindicators (KPIs) % %(1) Number of New Company 53,148 32,795 62 42,772 24Real Money Playersacquired Poker 37,570 24,606 53 32,934 14 Casino 15,578 8,189 90 9,838 58(2) Number of Active Company 173,901 68,679 153 126,511 37Players (players whoplayed for realmoney during thelast 90 days) Poker 126,644 48,460 161 102,698 23 Casino 47,257 20,219 134 23,813 98(3) Average number Company 21,917 9,145 140 17,553 25of Active Playersper day (AverageReal Money playersplaying during aday) Poker 19,030 7,946 139 16,229 17 Casino 2,887 1,199 141 1,324 118(4) Poker Active 1,769,704 731,032 142 1,476,839 20Player Days - (i.ethe number of dayseach playergenerates rake)(5) Yield per raked Poker 23.70 23.85 (1) 22.08 7day * * Empire Poker only PartyGaming relationship Partygaming has recently announced changes to its operating platform creating anenhanced overall product for its skins, which include "EmpirePoker.com". Theseenhancements have been provided without any change to the existing commercialarrangement, reaffirming Partygaming's commitment to "EmpirePoker.com". Product enhancements include "beginners' tables" - these include "micro-limittables" and low buy-in tables - and $50/$100 and $100/$200 tables and improvethe dedicated support provided to "skins" and their players by PartyGaming. The creation of a new "EmpirePoker.com" led poker community alongside the fastgrowing "Noble Poker" platform will give the Company greater flexibility inattracting new players. It is too early for Empire Online to accurately assess what if any impact thismove will have on its short term financial performance as: • player liquidity on the existing system remains high: the directors ofEmpire Online believe that, as measured by active players, this system would beone of the top three largest poker rooms in the world; • a key strength for the Company remains its ability to attract andretain poker players with a low cost per customer acquired; • Empire Online has already made progress with its diversificationstrategy of directing new poker players to its own platform, "Noble Poker", theacquisition of which was completed on 13 September 2005; • Due to the strong growth seen in new real money players acquiredthrough "Noble Poker" and "Club Dice", since the start of Q4 2005 significantlyless than half of new real money players have come through "Empire Poker". CEO Noam Lanir commented; "We are delighted in our strong trading and thestrategic advances we have made during the third quarter. In a period wherethere has been much uncertainty over potential growth rates in the online gamingindustry as a whole we believe our results demonstrate the strength of our coremarketing skills. By diversifying our distribution channels, we have laid thefoundations for sustainable long term growth, ahead of the market, across theEmpire Online network. We are determined to pursue industry-consolidatingopportunities as they arise. " Note 1 The Company is not required under the listing regulations of the London StockExchange to publish quarterly financial data and does not intend to do so.However the Company has provided unaudited estimates of turnover and netoperating profit within this statement. For further information: Empire Online Limited +357 (2) 5 847 700 Noam Lanir, Chief Executive Officer Andrew Burns, Chief Financial Officer Andrew Burnett Citigate Dewe Rogerson +44 (0) 20 7638 9571 Simon Rigby Sarah Gestetner Ged Brumby This information is provided by RNS The company news service from the London Stock Exchange