Q3 Profit At Sportingbet Up x 3
Published: Wednesday, June 06, 2007 Online-Casinos.com
Q3 PROFIT AT SPORTINGBET UP x3
Bigger incentive for Bwin to acquire UK betting group?
Dow Jones reports that Sportingbet plc, the online sports betting and gaming group that is currently engaged in M&A talks with rival Bwin Interactive Entertainment AG, has posted a sharp rise in third-quarter profit, and remains confident for the remainder of the financial year.
In keeping with other betting groups, Sportingbet is less happy with margin in May, which has been below average due to less favourable results across European soccer.
Confirming that the negotiations with Bwin continue, Sportingbet described the talks as "protracted" due to complex legal, regulatory and operational issues.
Chief Executive Andrew McIver said that during the third-quarter, "significant 'behind-the-scenes' achievements have been completed: all customer service personnel have been relocated to one dedicated service center and all Poker players are now playing on a single platform."
"Work continues on the next major Group project, being the relocation of licensable functions to the Channel Islands," he said in a statement.
Stripping out exceptional charges, goodwill amortisation and share option charges, group operating profit rose more than threefold to GBP 3 million in the third quarter ended April 30 from GBP 800 000 in the same period a year earlier. Turnover from continuing operations rose to GBP 291.1 million in the third- quarter from GBP 229.4 million a year ago.
There was a loss before tax of GBP 62.9 million, compared with profits of GBP 21.2 million, as the group took a GBP 62.3 million one-off charge comprising a GBP 46.2 million hit to write off its remaining Paradise Poker business, GBP 2.8 million in other write-offs and a GBP 13.3 million reorganisation charge.
In order to aid comparison, the financial and operational information for the prior period is stated excluding the U.S. business, which was sold in October 2006, resulting in Sportingbet's exit from the US online gambling market. Sportingbet sold its U.S.-facing sports-betting and casino business and its U.S. poker operations to Antigua-based Jazette Enterprises Ltd. in October 2006, offloading $13.2 million of debt in the process.
The deal saved the company some $14 million it would have had to pay in costs on a closure of its U.S. operations.
Post the U.S. sale, Sportingbet operations consist of its European sports, casino and poker business, an Australian sports business and the non-U.S. business of Paradise Poker.
Sportingbet's shares closed at 55.75 pence Tuesday, valuing the company at GBP 241 million. The stock has fallen more than sevenfold over the past year, having closed at 419.50 pence on June 5, 2006.
Commenting on the introduction of the Unlawful Internet Gambling Enforcement Act in the US, Sportbet said it is "taking no part in any reported initiatives to overturn, challenge or amend that or related legislation".
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