Online gambling group PartyGaming last week reported a 32% rise in fourth quarter sales as the thawing economic climate prompts punters to return to its virtual poker and casino tables to play the group's improved online games.
The company, which is listed on the London stock exchange but based in tax-friendly Gibraltar, said sales rose to $132.2 million in the three months to Dec. 31 from $100.4 million last year, helped by two acquisitions and a particularly strong performance in its casino division which offers online casino games like slots, blackjack and roulette, online poker games, sports betting and spread betting services.
PartyPoker.com remains the companies flagship brand however in the past 12 months PartyCasino.com has experienced considerable growth and brand presence, boosted by both branded slot games like Rambo, Mission: Impossible, Top Gun, Call Of Action 4: Modern Warfare, Resident Evil, The Terminator, Saturday Night Fever, The Godfather, a host of Marvel Entertainment themed games, and the recent news media campaign of which cricket and reality TV figure Phil 'Tuffers' Tufnell is the front man for.
PartyGaming is still on the look out for more igaming and betting sector companies to buy up following it's successful purchases of World Poker Tour and Cashcade. Earlier this month PartyGaming inked a "white label" deal with London Capital Group enhancing its spread betting offerings.
The company is the world's biggest listed online gaming group by market capitalization, derives most of its revenue from online poker and casino games and owns and operates a more modest sized sports book and bingo business, which is currently on the upswing.
Finance director Martin Weigold told reporters on a conference call following the results that casino revenue was boosted by a customer who won $5 million in one of the group's large jackpots and recycled $2 million of that win back into PartyGaming's casino website.
Weigold advised that the unusually strong sales rise is not sustainable going forward into 2010, however the company still expects to report double digit sales and profit growth in the year.
The bullish outlook for 2010 sits comfortably with the group's 2009 earnings, which it expects to be ahead of its own board forecasts.
Weigold said market consensus is for 'clean' earnings before interest, tax, depreciation and amortization, or Ebitda, of $132 million in 2010, and PartyGaming expects to outperform this.
'Clean' Ebitda is the company's preferred measure of profitability and excludes one-off, non-recurring and non-cash items. It is due to report is full year results March 4.
The good news buoyed PartyGaming shares, up 3.2% or 9 pence to 294p.
Alongside casino improvements, PartyGaming also reversed an 18-month trend of quarter-on-quarter revenue declines for its poker division, posting a 9% rise in sales to $49.1 million.
PartyGaming's poker operations had been under pressure due to competition from rivals, and the company has reacted by increasing the bonuses paid and expanding its loyalty programs (PartyPoints and Palladium Lounge)to encourage customers onto the site and retain them. Certainly Asia Pacific - Australian based players are sticking with it, based on feedback and buzz passed onto Asia Pacific's Media Man and Casino News Media firms.
The online gaming sector was hit by the passing of the Unlawful Internet Gambling Enforcement Act in October 2006 which effectively shut down the ultra lucrative market in the U.S. In Europe though, E.U. competition rules have prompted countries to start to open up their regulatory regimes to new players, and PartyGaming is looking to expand its operations when this happens.
It already has a growing presence in Italy, and with France and Denmark due to formalize regulation this year and next, the company is confident of its future growth prospects. South Africa, South America and India also appear to be countries well suited to grow the business. The Australian market is on fire says industry insiders. Australians remain some of the world's most passionate punters, in the top ten says recent figures quoted in the likes of Forbes, News Limited, Fairfax, WSJ, AP and Google News. The Aussie's are massive fans of the Hollywood blockbuster slot games and Marvel Entertainment titles Thor, The Incredible Hulk, Fantastic Four and The Amazing Spider-Man. Insiders advise Aussies are punting big in search of the Marvel Hero Jackpot, almost as popular as Party's 'The Big One' and 'Gold Mega Jackpot', currently sitting on approximately 3 million dollars.
PartyGaming is well aware that it's in the entertainment business and is pro active in putting the Business in Show, while maintaining happy punters, clients, partners and investors.
In addition the company is in discussions with other operators about potential deals and takeovers, although Chief Executive Jim Ryan wouldn't be drawn on whether a transformational deal would be forthcoming this year. Bwin's name keeps coming up, but its one of dozens who are keen to ink high end deals with PartyGaming.
Numis analyst Andrew Wade said he believes PartyGaming's fourth quarter performance should position it well for any merger and acquisition discussions, "as well as confirming it as an attractive partner for State and Private companies wanting to enter new markets."
The company is currently experiencing considerable growth in the Asia Pacific - Australian region, and is poised to return to the United States market, which compliments its strategic purchase of World Poker Tour, not to forget masses of U.S residents keen to play PartyGaming's Hollywood blockbuster slot games.
PartyGaming is expected to have presence at the upcoming iGaming Business event in Sydney, Australia this coming March.
*The writer has a b2b relationship with PartyGaming, as they do with dozens of brands in the igaming, gaming, media and entertainment industry.
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