PartyGaming Shares Up As 2Q Revenue Rises On Year - 7th July 2010

PartyGaming Shares Up As 2Q Revenue Rises On Year

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Shares in PartyGaming PLC rose Tuesday after the U.K.-listed gambling group said it expects a 28% rise in second quarter revenue year on year, boosted by acquisitions and strong growth in its casino business.

The group said it is trading in line with its own expectations. "We are pleased with the relatively robust performance of our business compared to many other consumer facing businesses in what remains a challenging economic environment," Chief Executive Jim Ryan said in a statement.

The group said its board "remains committed to playing an active role in consolidation and is confident about future prospects", while retaining its previous guidance for a margin on earnings before interest, tax, depreciation and amortization of 28% for the full year.

It has previously declined to comment on speculation that the company is in consolidation talks with Vienna-listed online gaming group Bwin Interactive Entertainment AG, one of Europe's largest sports book operators.

Casino revenue is expected to grow 6% quarter-on-quarter, boosted by higher yields and favorable currency effects, but with daily average player numbers down 5% due to seasonal factors.

However, the company said that while revenue in the second quarter, now reported in euros, is expected to be up 28% year on year, it will be approximately 2% down from the previous quarter and that the soccer World Cup has had a worse than expected impact on poker.

Poker revenue is expected to fall between 11% and 13%, with the daily average number of players falling between 8% and 9%. Compared with the prior quarter, casino revenue rose and bingo and sports betting revenue was "steady," the company said.

The company also said it is "encouraged" by the performance to date of its recently-launched poker operations in France.

At 0715 GMT, PartyGaming shares were up 9 pence, or 4.2%, at 230 pence, valuing the company at GBP939 million. Numis Securities analyst Wyn Ellis, with a buy rating, said the trading update was better than expected and the company's commitment to sector consolidation will go down well with investors.

PartyGaming, which derives most of its revenue from online poker and casino games and has a smaller sports book and bingo business, didn't provide revenue figures in its trading statement Tuesday.

In May, PartyGaming posted a 27% rise in first-quarter revenue to $127.1 million from $100.1 million a year earlier, but lower casino revenue and adverse foreign currency movements meant yield per active player fell 8% to $15.1 compared with last year.

In July last year it announced the takeover of Cashcade, the owner of Foxy Bingo, for up to GBP96 million, and in November it acquired WPT Enterprises, owner of the World Poker Tour, for $15.3 million.

Shares in PartyGaming, the world's biggest listed online gaming group by market capitalization, closed at 221 pence Monday, valuing the company at GBP901 million.

PartyGaming's principle brands include PartyPoker.com, PartyCasino.com and World Poker Tour

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