Gambling giants 888 (888.L), Party Gaming (PRTY.L) and Playtech (PTEC.L) announced their financial results for the first half of 2009. While 888 and Party Gaming showed significant revenue decline, it was Playtech that surprised the financial markets with better than expected results. Both Party Gaming and 888 attributed the decreasing revenue to currency movements and economic downturn. Additional influencing factor for Party Gaming is the competitive pressure on its poker business from poker rooms operating in the US.
Financial markets reacted accordingly. 888 share declined from 94.35 (Aug 26 – pre announcment) to 81.4 (Sep 1 – post announcment). Party Gaming shares declined from 266 (27.8 – pre announcement) to 242.30 (3.9 – post announcement).
What’s next for the gambling giants?
888 says it will continue to execute its dual B2B+B2C strategy and focus on expanding its product portfolio. In the B2C arena it will expand its marketing and CRM platforms. It will also seek for M&A opportunities, to expand its business.
Party Gaming will leverage the purchase of Bingo company Cashcade to acquire leadership in the global bingo market. Playtech will continue the integration of William Hill to its business.
Detailed results:
888
888 total revenue is down by 13% to $117.9m, compared to $131.5m in H1 2008. Profit (before interest and tax) down by 27% to $21m (17% margin) compared to $28m (21% margin) in H1 2008. Casino revenue is down by 13% to $56, while poker is down by 18% to $26m. Decreases in the traditional channels are slightly upturned by emerging offering up by 24% to $11m.
Playtech
Playtech revenue is up by 29.8% to £66.9m compared to £51.6m in H1 2008. Casino revenue is up by 2.2% to £37.6m from £36.8m in 2008 H1. Poker revenue is up by 23.8% to £17.3m from £14m in 2008 H1. Profit (before interest and tax) up by 33.2% to £45.3m (80% margin), compared to £34m (66% margin) in 2008 H1.
Party Gaming
Party Gaming (PRTY) revenue is down to $201m, compared to 254.8 in 2008 H1. Decrease resulted solely from the decrease in poker business - $102.6m compared to $153.9 in 2008 H1. Profit (before interest and tax) - $36.8m, up from 27.8 the previous year. However, provision for payments associated with the group’s non-prosecution agreement with the American authorities, in the amount of $101m brought about a loss after tax of $64.9m.
