PartyGaming Plc
30 January 2008
30 January 2008
PartyGaming Plc
('PartyGaming' or the 'Company' and, together with its subsidiaries,
the 'Group')
Fourth Quarter Key Performance Indicators and Trading update
Fourth quarter highlights- Continuing operations
> Group revenue* up 52% to $120.0m (2006: $78.8m) making $448.2m for the
full year (2006: $324.7m)
> Poker revenue* up 23% to $72.6m (2006: $58.8m) making $288.8m for the
full year (2006: $268.1m)
> Casino revenue up 156% to $42.3m (2006: $16.5m) making $143.6m for the
full year (2006: $51.0m)
> Sports Betting revenue up 50% to $5.1m (2006: $3.4m) making $15.8m for
the full year (2006: $5.6m)
> Clean EBITDA for the full year in 2007 expected to be slightly ahead of
current consensus market expectations
> Board remains confident about prospects for 2008
* excluding revenue from skins
Consolidated Key Performance Indicators - Continuing operations
Three months to 31 December %
change % change
versus versus
2007 Q3 2007 Prior year 2006
------------------------------------------------------------------------------------------------------------------
Active player days (m) 7.3 11% 30% 5.6
Daily average players (000) 79.1 10% 29% 61.4
Yield per active player day ($) 16.5 (5%) 18% 14.0
Yield per unique active player in the quarter ($) 204.4 (10%) 8% 188.7
New real money sign-ups (000) 150.4 16% (4%) 156.2
Unique active players during the period (000) 587.3 15% 41% 418.0
Average daily revenue (excluding skins) ($000) 1,304.6 4% 52% 857.1
Group revenues reached $120.0m in the fourth quarter of 2007, a 52% increase
over that achieved in the same period in 2006 and the highest quarterly revenue
since the enactment of the Unlawful Internet Gambling Enforcement Act ('UIGEA')
in the US in October 2006. Casino and sports betting were the drivers of net
revenue growth in the quarter. Whilst gross poker revenues grew 7% quarter on
quarter, a restructuring of the PartyPoints loyalty programme resulted in an
increase in the cost of bonuses and PartyPoints as a percentage of gross revenue
in the period. In accordance with IFRS, these items are netted from revenue,
resulting in a small reduction in net poker revenue versus the previous quarter.
Notwithstanding the above, lower than expected affiliate costs and lower
customer bad debts are expected to deliver a greater than anticipated increase
in Clean EBITDA margins.
Both the number of unique active players and daily average players across the
Group's business grew strongly versus the prior year and the previous quarter
reflecting the Group's strategy of increasing the player base through both new
player sign-ups as well as continued efforts to improve player retention. New
player sign-ups increased by 16% over the previous quarter, and this contributed
to an 11% increase in active player days versus the previous quarter to 7.3
million which represented a 30% increase over the fourth quarter of 2006 (2006:
5.6 million).
Consolidated yield per active player day fell 5% quarter on quarter reflecting
the restructuring of the Group's customer loyalty programme in the fourth
quarter, the full impact of which was partially mitigated by the increasing
popularity of the Group's casino products that tend to generate higher yields
than poker and sports betting. The year on year growth in yield per active
player day of 18% reflects the recovery in yields experienced following the loss
of a number of high value players to sites that continue to accept US players
following the enactment of the UIGEA in October 2006. The interaction of each
of these metrics combined to deliver total average net revenue per day in the
fourth quarter of 2007 of $1,304,600, a 4% increase over the previous quarter
and a 52% increase over the fourth quarter of 2006.
Poker
The Group's poker business saw a 13% increase in the number of unique active
players versus the previous quarter. Despite the normal seasonal pick-up and a
successful reactivation campaign, the restructuring of the Group's loyalty
programme, which resulted in a 9% fall in yield per active player day in the
period, meant that poker revenue declined by 3% quarter on quarter to $72.6
million. Further improvements to the loyalty scheme, with a greater focus on
rewarding player loyalty rather than just levels of play are expected to result
in the rate of bonuses and PartyPoints that are netted from revenue returning to
levels seen in the first half of 2007. Since the end of September 2007 the
Group has enjoyed strong growth in the numbers of players playing poker on its
sites. However, along with a number of competitors, PartyPoker has lost a small
amount of market share to those sites that continue to take bets from players
located in the US and other countries from which we will not accept players for
regulatory reasons. It is estimated that as at 28 January 2008 PartyPoker had
an average global market share of 10.2%1.
1 Source: Pokersitescout.com, based on average daily players. Note that data
from this source excludes tournaments and does not take into account the value
of players
Casino
Casino delivered another strong performance in the quarter driven by PartyCasino
with total casino revenue of $42.3m, a 15% increase versus the previous quarter
and 156% above the prior year (2006: $16.5m). New player sign-ups were up 9%
quarter on quarter and were double that achieved in the same period the previous
year. Cross-selling remained the main source of growth but it is hoped that the
launch of a stand-alone marketing campaign for PartyCasino will also increase
the number of dedicated casino players. The number of unique active players in
the quarter increased by 46% year on year and by 9% versus the previous quarter,
reflecting the popularity of the Group's casino games among its poker players.
Yield per active player day increased for the fourth consecutive quarter to
$39.0, driven by the introduction of new and improved slot machines as well as
seasonality.
Sports Betting
The positive trends in sports betting continued into the fourth quarter with
total revenue up by 21% over the previous quarter and up by 50% over the
previous year to $5.1m (2006: $3.4m) on the back of both higher betting volumes
and higher gross win margins. Gross win margins in the period increased to 6.0%
(Q3 07: 5.6%) and would have been even higher had it not been for some
unfavourable Champions League results in December 2007 which impacted most
bookmakers. Betting volumes also continued to increase, up by 34% quarter on
quarter to $115.6m due to a concerted marketing push behind PartyBets,
seasonality and a substantial increase in the number of live betting
opportunities for customers.
As usual, full details of all of the Group's quarterly KPI data by segment is
available for download at the Group's website at http://www.partygaming.com/
investor/documentation.html.
Trading Update
In the 4 weeks ended 28 January 2008, trading has been in line with management's
expectations. Average gross daily revenue had increased by 1% from that
achieved in the fourth quarter to $1,681,900 (Q4 07: $1,661,300). In poker, new
player sign-ups averaged 1,341 per day, and there were on average 66,760 active
players per day generating average gross daily poker revenue of $1,021,700, a 5%
increase over the fourth quarter of 2007 (Q4 07: $970,500), with average gross
poker revenue exceeding $1.0 million per day for the first time since the
enactment of the UIGEA. Bonuses and PartyPoints deducted from gross revenue are
currently tracking between 14% and 15% of gross poker revenue, down from 19% in
the fourth quarter. In casino, the amount bet per day showed a small increase
from the level seen in the fourth quarter but average gross daily revenue had
decreased to $589,100 (Q4 07: $615,100) due to a fall in the house win. In
sports betting the amount bet per day increased by 9% versus the fourth quarter
of 2007 but gross win per day fell by 6% to $71,100 per day (Q4 07: $75,700) due
to a fall in the gross win margin to 5.2% (Q4 07: 6.0%).
The Group's preliminary announcement of results for the year ended 31 December
2007 will be made on 5 March 2008.
Commenting on the Group's full year revenues and fourth quarter KPIs, Mitch
Garber, Chief Executive Officer, said:
'We are delighted to have delivered another strong performance. We continue to
build on the four pillars of our strategy: growing the player base, localising
the customer offer and broadening the product base whilst acting responsibly and
this strategy continues to deliver strong financial results. These results show
that we have built a solid platform for growth in the post-UIGEA world and we
remain confident about the Group's future prospects.'
Contacts:
PartyGaming Plc +44 (0)20 7337 0100
Peter Reynolds, Director of Investor Relations
John Shepherd, Director of Corporate Communications
Financial Dynamics +44 (0)20 7831 3113
Edward Bridges / Juliet Clarke
Conference call
Wednesday 30 January 2008
For analysts and investors there will be an opportunity to put questions to
Mitch Garber and Martin Weigold, Group Finance Director, by way of a conference
call at 09.30 GMT. The details of the call are as follows:
Dial-In No: +44 (0) 1452 562 815
Password: PartyGaming
Replay no: +44 (0)1452 550 000 (available for 1 week)
Replay passcode: 29234697#
Appendix
Poker* - Key Performance Indicators - Continuing operations
Three months to 31 December % %
change change
versus versus
2007 Q3 2007 prior year 2006
-----------------------------------------------------------------------------------------------------------------
Active player days (m) 6.1 9% 33% 4.6
Daily average players (000) 66.0 7% 33% 49.8
Yield per active player day ($) 12.0 (9%) (6%) 12.8
Yield per unique active player in the quarter ($) 150.0 (14%) (13%) 173.0
New real money sign-ups (000) 118.6 7% (9%) 130.4
Unique active players during the period (000) 483.8 13% 42% 340.1
Average daily revenue (excluding skins) ($000) 788.9 (3%) 23% 639.5
*includes Emerging Games segment
Casino - Key Performance Indicators - Continuing operations
Three months to 31 December % %
change Change
versus versus
2007 Q3 2007 prior year 2006
------------------------------------------------------------------------------------------------------------------
Active player days (000) 1,085.6 8% 66% 654.5
Daily average players (000) 11.8 8% 66% 7.1
Yield per active player day ($) 39.0 7% 54% 25.3
Yield per unique active player in the quarter ($) 204.8 6% 75% 117.3
New real money sign-ups (000) 12.3 9% 102% 6.1
Unique active players during the period (000) 206.5 9% 46% 141.2
Average daily revenue (excluding skins) ($000) 459.8 15% 155% 180.1
Sports Betting - Key Performance Indicators - Continuing operations
Three months to 31 December % %
change change
versus versus
2007 Q3 2007 prior year 2006
------------------------------------------------------------------------------------------------------------------
Active player days (000) 844.1 33% (4%) 883.3
Daily average players (000) 9.2 33% (4%) 9.6
Yield per active player day ($) 6.1 (8%) 56% 3.9
Yield per unique active player in the quarter ($) 68.5 (12%) 29% 53.0
New real money sign-ups (000) 19.4 143% (2%) 19.7
Unique active players during the period (000) 75.0 40% 15% 65.0
Average daily revenue ($000) 55.8 23% 49% 37.5
This information is provided by RNS
The company news service from the London Stock Exchange
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