Benefits of regulation
Sportingbet chairman Peter Dicks has said the bookmaker has had a ‘robust start to its new financial year’. He commented: “Trading for the first 19 weeks of the year has been in line with management’s expectations, with sports Net Gaming Revenue up 9 per cent on a like for like basis and total NGR up 37 per cent. With regulatory change well underway in Europe, and not withstanding the economic outlook, we are confident that the benefits of regulation, with increased advertising opportunities, improved payment processing and a stable business platform, will drive profitable growth in the medium term.”
Poor OTC performance contributes to Gala Coral dip
Gala Coral has revealed that business in 2011 wasn’t as buoyant as the year before, but that things are starting to look up performance-wise.
ANNUAL RESULTS M
ajor betting and gaming opera- tor Gala Coral saw turnover drop by two per cent in the last financial year to £1.1bn, although this excludes figures generated by the 2010 World Cup which the firm seems to think would provide an unfair com- parison. Group EBITDA (pre-exceptionals)
also suffered reaching £261.0m; 8 per cent lower year on year on an underly- ing basis. The firm experienced ‘cash outflow’ of £118.7m over the 12 months ending 24 September 2011, including the net repayment of £190.1m of senior debt and refinanc- ing costs of £41.0m. The company still has £1.3bn of debt to contend with going forward.
Gala Coral said: “The main drivers of the underlying EBITDA reduction were a poor OTC performance and increased costs in Coral, and a decline in Remote. The second half of the year saw a return to growth in OTC stakes, although margins have remained below the long term average. Cost increases in the Coral business were primarily driven by estate growth and property and content costs. Remote remains limited by uncompetitive technology, although trends in active customers were materially improved in H2. The project to re-platform all websites onto Playtech software is well progressed, with a re-launch of the new sites planned for spring and summer of 2012.” The overall trends had been
repeated in the firm’s fourth quarter with a 3 per cent drop in turnover across the group to £249.0m. Group EBITDA (pre-exceptionals) of £55.0m was £14.7m lower than the prior year, which the company mainly attributed to poor sports betting results in the quarter against favourable comparisons and increased costs including VAT. Over the quarter, OTC amounts staked were 3 per cent ahead of the
Steady progress in turbulent markets
EXPANSION S
OTC MARGIN OF 14.9 PER CENT WAS BELOW THE LONG TERM AVERAGE
prior year in total, and 1 per cent ahead on a like-for-like basis. However, OTC margin of 14.9 per cent was below the long term average, and 2.3 per cent below the margin achieved in the fourth quarter of the prior year, primarily due to unfavourable football results. This resulted in OTC gross win falling 11 per cent below prior year. Gross win per machine was 2 per cent ahead of the prior year at £870. Year on year cost increases includ- ing VAT also impacted EBITDA in the quarter, which reduced £11.6m against last year. In Gala Coral’s remote gambling division turnover has continued to fall below prior year levels, although the company said that recent trends in new depositors and active customer levels have been more positive. Tight margin and cost management resulted in growth in EBITDA (pre- exceptionals) of 16 per cent over the same quarter in 2010. For the firm’s Eurobet Italia busi- ness, sports betting amounts staked were 10 per cent ahead of the prior year. However, adverse results in both European and English leagues led to the gross win margin falling below expected levels, leading to a reduction
in EBITDA of £1.5m against the same quarter in 2010. However, the firm added: “An enhanced range of online gaming was finally permitted to launch in the final two months of the financial year. Early market share has been ahead of management expectations, although the size of the market is below projections.”
The company added that trading since September has been ‘encourag- ing’. It explained: “Coral OTC amounts staked after two periods are 9 per cent ahead of prior year levels, although poor results continue to impact margin such that gross profit is below the prior year. Machines have shown strong growth on the back of increased new content and improved margins, with gross win per machine per week currently averaging £945 in period two.
“Remote continues to trade below prior year levels, with EBITDA also impacted by increased costs associ- ated with putting the new operational teams in place to support the re- launches in 2012. However, positive trends in the number of active cus- tomers have continued. Italy’s EBITDA is significantly ahead of prior year levels due to very poor sports results at the start of the 2010 financial year.”
pread betting and finan- cials firm World- Spreads has reported an increase in revenues for the six months ended 30 Sep- tember 2011, but has also revealed another loss over the period. Revenues from continuing operations were up 11 per cent to 8.3m euro, with the European division experiencing a 22 per cent increase to 3.1m euro, but the firm still reported a loss before tax from continuing operations of 630,000, com- pared to a 440,000 euro loss over the same period in 2010.
The firm said that it expe-
rienced slower growth in the UK market with net revenue growth of 2 per cent in the period, but explained that this would have been significantly higher but for a prudent hedging policy during the period due to the extremely high levels of volatility in the world’s financial markets. Average trades per day have grown by 22 per cent to 9,612 for the period and active clients have grown by 40 per cent to 4,916 in the period. Chief executive officer Conor Foley said: “Against a background of very turbu- lent markets we continue to make steady progress in the implementation of our long term strategy. Unsettled con- ditions in the Euro area and the volatility in markets that
accompanied it delivered a boost to top line activity but mandated an extremely focussed approach to risk and exposure.
“Our international opera- tions are progressing as anticipated. Our IT platform and product suite is devel- oping fast and on time with the recent release on an on- line CFD offering and a mobile telephony applica- tion. Their impact on top and bottom line revenue should be felt from early in 2012.” Foley said that the company continues to have every confidence that its strategy to strengthen and broaden the group’s inter- national reach, activities and infrastructure will bear fruit. He added: “We have continued to demon- strate strong growth in our international markets, most notably in Europe where the new offices we established last year have begun to make a meaning- ful impact in the perform- ance of the group. We are excited by our pipeline which includes not only new partners, both local and international, but also new technology in the form of our CFD and mobile offerings, and new juris- dictions such as Israel, where the company has recently opened a small sales office which has already started to intro- duce clients.”
CONOR FOLEY: ‘INTERNATIONAL OPERATIONS ARE PROGRESSING AS ANTICIPATED’
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