TTR.L Regulatory News (TTR)

13 Dec 2006 07:03

32Red Plc13 December 2006 32Red Plc("the Company") 2006 Trading update 32Red Plc, the award-winning online casino, poker and sportsbetting operatortoday provides a trading update on 2006 performance. The 32Red online gaming business has recovered well in the latter part of 2006following the slowdown experienced in the summer. New player sign-ups andactivity levels are pleasing and revenues from the poker operations have movedforward especially well. The Company acquired the loss-making sportsbetting operator Bet Direct in Juneof this year for a total consideration of £12.5m and trading at Bet Direct hascontinued to be difficult over recent months. As highlighted by other operatorsin the industry, the months of October and November have seen abnormally highnumbers of successful favourites in UK horseracing markets which has severelyimpacted gross win margins experienced by Bet Direct. The Company entered into aconsultation process with the employees of Bet Direct on 10th November 2006 andwhilst the outcome of the consultation is yet to be determined, it is likelythat all or part of the business will be relocated to Gibraltar. Other plans tomove the Bet Direct business to profitability continue to be implemented and theBoard firmly believes that Bet Direct will move into a much improved cashposition in 2007 and will be central to the 32Red business going forward. As a direct result of poor trading experienced at Bet Direct, the Companyanticipates that the combined operating results for 32Red will fallsignificantly below current market forecasts for the year ending 31st December2006. The lower than anticipated EBITDA performance has resulted in a breach ofthe Company's EBITDA covenant with the Royal Bank of Scotland with whom 32Redhas an outstanding loan of approximately £6m. The Company continues to enjoy a constructive relationship with its Bankers andhas met all interest and capital repayments. 32Red Plc has a cash balance ofapproximately £5.3m as of the close of business on 13th December 2006. The Company intends to provide a further update on 2006 performance during weekcommencing 22nd January 2007. 13 December 2006 Enquiries 32Red Plc Tel: 00 35 049 396Ed Ware, CEOJon Hale, Finance Director College Hill Associates Tel: 020 7457 2020Matthew Smallwood Numis Securities Plc Tel: 020 7776 1600Andrew DawberDavid Shapton Notes to Editors 32Red is an award-winning online casino, poker and sportsbetting operatorlicensed, regulated and based in Gibraltar. The Company is allied to best ofbreed partners including Microgaming Software Systems, BarclayCard MerchantServices and GibTele.Com. For the past 3 years 32Red has been awarded BestCasino by Watchdog and Player Advocate site Casinomeister. 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, and becameofficial main club sponsor to FA Premiership Club Aston Villa. www.32Red.com www.BetDirect.com www.32RedPlc.com This information is provided by RNS The company news service from the London Stock Exchange