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09-06-2006, 03:49 PM
|  | Forum Admin | | Join Date: Aug 2004 Location: England Age: 34
Posts: 1,659
| |  32Red PLC Interim Results Announced
32Red PLC Interim Results Quote:
RNS Number:2735I
32Red Plc
31 August 2006
32Red Plc
('the Company')
Interim results for the six months ended 30th June 2006
32Red Plc, the award-winning online casino, poker and sportsbetting operator,
that derives 92% of its revenues outside the USA, today reports interim results
for the half year ended 30 June 2006, which include the figures and KPI's
reported in the Group's pre-close statement on 11 July 2006.
Key financials:
* Total revenues up 48% on H1 2005 to £ 6.2 million
* Casino revenues of £5.0m, an increase of 27% on H1 2005
* Poker revenues rose by 134% against the prior half year to £0.6 million
* Bet Direct revenues, derived from 3 weeks of ownership were £0.6m
* 92% of revenues from outside of the United States
* 32Red Casino and Poker PBT of £1.1m (2005: £1.0m)
* Group PBT of £0.51m including Bet Direct operations to 30th June 2006
* Trading since 30 June has been mixed and may result in market expectations
for the full year not being met
* Casino slower than anticipated to recover from World Cup, but now
encouraging signs
* Poker showing revenue growth in July and August
* In common with other bookmakers, Sportsbetting suffered a difficult
Goodwood Meeting
Key Performance Indicators:
* Total active customers grew to 44,539 (2005: 8,832)
- Casino active players - 9,556, up 63.41 % on 2005
- Poker active players - 9,936, up 232.98 % on 2005
- Bet Direct active customers - 25,047 active (since 7th June)
* Total new casino and poker players increased by 125.16 % to 13,253 (2005:
5,886)
* Total new Bet Direct customers of 2,904 (since 7th June)
* Average 32Red Casino player yields of £420 per quarter in H1 2006
* Quarterly 32Red Poker revenue per active player of £48 in H1 2006
* 32Red Casino Cost per Acquisition (CPA) of real money players of £160,
32Red Poker CPA of £31, Combined 32Red CPA of £63
Ed Ware, CEO commented: 'Despite the negative influence of the World Cup in
June, the 32Red online gaming business has shown revenue growth in the period
and our Key Performance Indicators demonstrate encouraging trends for the
future. However trading in the second half to date has not recovered as quickly
as anticipated from the gaming industry-wide World Cup slowdown. We believe that
the acquisition of Bet Direct in June will significantly enhance the scale and
diversity of the business although a tough Goodwood and the one-off costs and
expenses incurred have impacted our profitability.
We are confident that 2007 and beyond present significant opportunities for the
new enlarged group and that our strategy of marketing to our main market, the
United Kingdom, with the full complement of betting and gaming products will be
a foundation for continuing progress and further success'.
31 August 2006
Enquiries
32Red plc Tel: 00 35 049 396
Ed Ware, CEO
Simon Dimmer, Finance Director
College Hill Associates Tel: 020 7457 2020
Matthew Smallwood
Notes to Editors
32Red is an award-winning online casino and poker operator licensed, regulated
and based in Gibraltar. The Company is allied to best of breed partners
including Microgaming Software Systems, BarclayCard Merchant Services and
GibTele.Com. For the past 3 years 32Red has been awarded Best Casino by Watchdog
and Player Advocate site Casinomeister.
The Company attracts players from around the world but has a predominantly UK
player base, with 74% of revenues at 32red.com & 32redpoker.com coming
from the UK.
On 23rd September 2005 the Company listed on the London Stock Exchange's
Alternative Investment Market. In the first half of 2006 the Company completed
the acquisition of UK sportsbetting and gaming firm, Bet Direct, and became
official main club sponsor to FA Premiership Club Aston Villa.
Performance Summary
Casino operations showed a 27% increase in gross win over the first half of 2005
despite a dip in volumes throughout the period of the World Cup in June. The
number of active players in the period grew by over 60%; however the average
value of each player showed a drop to £523. This key area of yield per player
continues to receive close attention although with the significant uplift in
player numbers, a fall in yields was anticipated. 32Red recruited over 6,000 new
real money casino players in the first half of 2006. The cost of acquiring new
players fell from £176 in the second half of 2005 to £160 in this period. Our
CPA figures include all costs associated with external marketing spend including
affiliate commissions.
The 32Red Poker Room continues to grow substantially from its low base in 2005.
The first half of 2006 saw revenues more than double, active players and new
players more than triple. Nevertheless, we have experienced a softer performance
than anticipated with the 2005 growth path not continuing. Market factors such
as the launch of the Swedish Government's online poker room and aggressive
rakeback offers from competitors have impacted revenues negatively from mid
March onwards. The 2006 World Cup resulted in a material decline in activity
levels in the month of June.
Bet Direct was acquired on 7th June 2006 for a total consideration of £12.5m
(less customer balances). Bet Direct offers online, interactive TV, mobile and
telephone based sportsbetting, as well as remote gaming products. During the
three weeks of ownership within the period, both Royal Ascot and the World Cup
were traded by the company. Gross Win from sportsbetting activities was £100k
behind plan with business taken at Royal Ascot producing a small negative
margin. World Cup performance during the period was successful and yielded a
9.8% gross win margin. Expenses attributed to the initial integration and
acquisition of Bet Direct have been allocated to June's accounts.
Strategy
Our focus remains on the United Kingdom and 74% of revenues are derived from
that market. European revenues for the period amounted to 11%. Our US exposure
is low at 8% and is limited to 32Red gaming platforms only, with payments also
being limited to electronic wallet transactions. Bet Direct revenues originate
almost completely from the UK, US players are prohibited entirely. This stance
will continue. Overall, 92% of the group's revenues come from outside the United
States, a figure which will increase as Bet Direct revenues form a larger part
of our income. We continue to focus marketing at the UK market both online and
offline and our sponsorship of Aston Villa FC is a measured and significant step
forward for the 32Red brand. Early signs are that the partnership will be a
commercial success for the Company.
The completion of the Bet Direct acquisition closes the initial phase of our
move into sportsbetting and providing our customers with a full suite of remote
gambling products. Whilst much remains to be done to develop and optimise the
Bet Direct business, we are pleased with the acquisition and are encouraged by
the opportunities presented by it. The passion for delivering excellent service
continues to be our focus in driving performance across all of our platforms,
along with growing our profile in the UK through value for money marketing deals
and activity.
Board Changes
We continue to strengthen the team at Executive Director level in order to meet
the needs of the business and our expanding portfolio of activities. Martin
Saunders, 46, joins the Company in October as Trading Director with direct
responsibilities over Sportsbetting trading activities. Martin has over 20 years
experience with Ladbrokes, most recently as Managing Director of Ladbrokes
International Limited in Gibraltar. Our current Finance Director, Simon Dimmer
is leaving the Company for family reasons and departs in October. Simon has
served the Company tirelessly over the past 3 years and leaves 32Red on
excellent terms and the Board wishes him and his family the very best for the
future. We expect to make an announcement regarding a new Finance Director
shortly.
Outlook
Work continues apace on Bet Direct services, most notably a revamped online
sportsbook service, a Microgaming powered online casino and poker room, and a
review of existing channels including interactive TV activities. DashCasino.com,
a second casino brand, has been developed and positioned behind our flagship
32Red casino proposition. Dash launched in August and our new Bet Direct online
gaming platforms are being soft-launched at the time of writing. Once complete,
gaming services will be operated from Gibraltar (the inherited Boss Media
powered Bet Direct casino and poker continue to operate from Curacao),
maximising our valuable Gibraltar licence, support team and operating systems.
Our Internet Sportsbook, BetDirect.net will be relocated to Gibraltar in early
September and work is well underway to completely overhaul the existing online
betting service. We believe that a significant amount of further revenue can be
generated by these Internet services and we are looking forward to growth in
this area.
An operational review of Bet Direct activities in Liverpool has been concluded
to ensure that the business is optimised and that synergies across the group can
be identified and implemented in a sensible and timely manner.
Trading Update
Casino gaming revenues remained subdued in July although active players, new
player recruitment and gross win all improved on June's performance. We believe
that the effects of the final stages of the World Cup taking place along with
fine weather in the United Kingdom have impacted performance. August is stronger
for our UK casino with new player recruitment and active player levels being
particularly pleasing.
32Red Poker, which we reported previously as being slow, recovered in July and
showed revenue growth ahead of the previous 3 months. August has seen an
extension of that trend and is ahead of all previous months as at close of
business 25th August 2006.
In common with other bookmakers, Bet Direct suffered a difficult trading period
around the Glorious Goodwood racing meeting (accounted for in July). August has
traded extremely positively at Bet Direct in the month to date.
After taking these factors into account and having reviewed the current
situation, the Board has concluded that market expectations for the year ending
31st December 2006 may not be met. However, we are confident that 2007 and
beyond present significant opportunities for the new enlarged group and that our
strategy of marketing to our main market, the United Kingdom, with the full
complement of betting and gaming products will be a foundation for continuing
progress and further success.
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