TTR.L Regulatory News (TTR)

26 Jan 2007 07:01

32Red Plc26 January 2007 32Red Plc("the Company") Trading Update 32Red Plc, the award-winning online casino and poker and sportsbetting operator,is pleased to provide an update on trading for the year ended 31 December 2006. Key financials: • Total revenues increased by 47% to £14.36m including contribution from the Bet Direct business acquired in June 2006 - Total Casino revenues of £9.42m, up 5% on 2005 - Poker revenues of £1.49m, up 77% on 2005 - Bet Direct revenues of £3.45m since acquisition Key Performance Indicators: • Active customers grew to 84,595 (2005: 17,597) - Casino active players 20,184, up 90% on 2005 - Poker active players 18,272, up 161% on 2005 - Bet Direct active customers - 46,139 since acquisition • New customers grew to 42,866 (2005: 14,451) - New Casino players 16,663, up 103% on 2005 - New Poker players 15,088, up 142% on 2005 - New Bet Direct - 11,115 since acquisition • Player yield - Casino player yield £467, down 45% on 2005 - Poker player yield £82, down 30% on 2005 - Bet Direct customer yield £75 since acquisition • Cost per Acquisition (inclusive of affiliate costs) - Casino & poker cost per acquisition £93 (2005: £147) - Casino cost per acquisition £153 (2005: £205) - Poker cost per acquisition £24 (2005: £69) 32Red online gaming business The 32Red Casino and poker business has recovered in the latter part of 2006following the slowdown experienced in the summer. Revenues are up on the prioryear with new player sign-ups and player activity levels very encouraging. Withnew player recruitment levels reaching record levels during the year, playeryields suffered although performance did recover in the last quarter. Bet Direct The Company acquired the loss-making sportsbetting operator Bet Direct in June2006 and experienced difficult trading conditions during the period ended 31December 2006. As reported across the sector, there has been an abnormally highnumber of winning favourites in UK horseracing markets which allied withunfavourable Champions League football results in September, has severelyimpacted gross win margins experienced by Bet Direct. The Company continues to operate its telephone betting arm from the UK, althoughit entered into a 3 month consultation process with the employees of Bet Directon 10 November 2006. Whilst the outcome of the consultation is yet to bedetermined, it is likely that all or part of the remaining business will berelocated to Gibraltar in the first half of 2007. Other plans to move the BetDirect business to profitability continue to be implemented and the Board firmlybelieves that Bet Direct will be central to the 32Red business going forward. 32Red Plc As a direct result of poor trading experienced at Bet Direct, and as reported inDecember, the Company anticipates that the combined operating results for 32Redwill fall significantly below current market forecasts for the year ended 31December 2006. As announced on 13 December 2006, the lower than anticipatedEBITDA performance has resulted in a breach of the Company's EBITDA covenantwith the Royal Bank of Scotland with whom 32Red has an outstanding loan ofapproximately £5.4m. As also announced, the Company continues its discussionswith its Bankers, with whom it maintains a constructive relationship and, inaddition, continues to meet all interest and capital repayments as they falldue. Commenting on the performance, Ed Ware, CEO said: "2006 has been a turbulent year for the industry following the changes in USlegislation, which supports the Company's long term strategy not to market inthe US. I am pleased to report that despite the negative influences of the WorldCup and the very warm UK summer & autumn, casino and poker revenues are up on2005. "2006 has been a transitional year for the Company following the acquisition ofthe sportsbetting company, Bet Direct in June providing our customers with afull suite of remote gambling products. Although, the business has suffered fromabnormal sporting results during 2006, we are pleased with the acquisition andare encouraged by the opportunities presented by it. "The 32Red Casino was awarded Casino of the Year by Industry watchdogCasinomeister in January 2007. This is the fourth consecutive year that theCompany has had this prestigious award bestowed upon it and testament to theexcellent level of customer care 32Red provides its players. I am also pleasedto say that the Board has strengthened during the year and the Company isideally placed to realise its full potential." 26 January 2007 Enquiries 32Red Plc Tel: 00 35 049 396 Ed Ware, CEOJon Hale, Finance Director College Hill Associates Tel: 020 7457 2020 Matthew SmallwoodJamie Ramsay Notes to Editors 32Red is an award-winning UK focused online casino and poker operator licensed,regulated and based in Gibraltar. The Company is allied to best of breedpartners including Microgaming Software Systems, BarclayCard Merchant Servicesand GibTele.Com. For the past 4 years 32Red has been awarded Best Casino byWatchdog and Player Advocate site Casinomeister. The Company attracts players from around the world but has a predominantly UKplayer base, with the majority of revenues at www.32red.com andwww.32redpoker.com coming from the UK. On 23rd September 2005 the Company listed on the London Stock Exchange'sAlternative Investment Market. In the first half of 2006 the Company completedthe acquisition of UK sportsbetting and gaming firm, Bet Direct(www.betdirect.com), and became official main club sponsor to FA PremiershipClub Aston Villa. This information is provided by RNS The company news service from the London Stock Exchange