PartyGaming straightens from the slip, recovers some lost ground |
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Sat, 22 Oct 2005 09:05
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LONDON: Shares of the world's largest Internet casino PartyGaming Plc recorded the highest increase since the June IPO as the company announced that it is recovering from a financial slowdown in the third quarter. Average revenue in the fourth quarter until now is 10 per cent higher than the average revenue for the third quarter, the company said, adding sales of its casino products are very much above expectations.
As the announcement came, the Gibraltar-based company's shares rose by 14 per cent (10.75 pence) today, selling at 88.25 pence thus recording the biggest gain since its June 27 IPO. The trading price gave the company a market value of 3.53 billion pounds. At the IPO, the stock was sold to the public at 116 pence and the offer was more than three times subscribed. However, the stock lost its sheen when the company on 6 September announced that its revenue was short of forecasts in July and August. The market value came down by a third.
The company said revenue for the three months ended 30 September increased by 32 per cent to $220 million from $166.1 million. However, the increase in the first half was a phenomenal 81 per cent.
PartyGaming has a 51 per cent share of the online poker market.
Chief executive officer Richard Segal said the picture "todate in October is much better" and there is a marked improvement in the company's performance since the end of September.
The company had restructured its operations and last week ended an arrangement of letting its online platform to customers such as EmpirePoker.com and Coral Eurobet, known as "skins", and started directing customers towards its own tables. The company claimed this resulted in encouraging increase in poker revenue.
It said the number of days regular users played poker and casino games increased 53 per cent, while new players totalled 209,372 for PartyPoker.com and 19,991 for the casino business. It used 29 per cent of its revenue in the third quarter in acquiring customers.
As much as 87 per cent of the company's revenue comes from the U.S., where the
justice department is of the view that online gambling is illegal.
PartyGaming introduced two new games on the site, blackjack and side bets, and Segal said he was encouraged by the performance of these new games.
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