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Lower Losses at bwin.party digital entertainment

Published: September 1, 2012; 12:37 · (Vindobona)

In its Half year report for the six months ended 30 June 2012, a solid growth in Clean EBITDA was recorded. Losses were down from € 41m to € 21.3m.

Lower Losses at bwin.party digital entertainment / Picture: © Novomatic

The pro forma total revenue rose by 3% to € 410.0m with growth in casino & games and sports partially offset by a decline in poker.  Actual total revenue up 50% to € 410.0m driven primarily by the Merger.

The pro forma Clean EBITDA from Continuing operations increased by 13% to € 92.3m due to revenue growth and synergies, partly offset by increased gaming duties from locally regulated markets.  Actual Clean EBITDA from Continuing operations up 81% to €92.3m primarily due to the Merger .

Bwin´s clean EPS from Continuing operations was up by 23% on a pro forma basis to 9.2 € cents per share (2011: 7.5 € cents per share).

A strong cash generation in the period used to fund increased taxes, M&A and cash returns to shareholders; €100m in dividends and buybacks returned to shareholders in the twelve months to 30 June 2012  The half year dividend increased by 10% to 1.72 pence per share (2011: 1.56 pence)

Bwin´s board remains confident about the full year result; net gaming revenue down 8% versus Q2 12 reflecting the Euro 2012 Championship, the late start of the German Bundesliga and seasonality

Commenting on today’s results announcement, Jim Ryan and Norbert Teufelberger, Co-CEOs said:“Our focus during the first half of 2012 was to continue to execute our integration plan in order to deliver the synergies committed to as part of the Merger, secure meaningful market positions in newly regulated markets and improve our core operations. With a shifting regulatory landscape and a challenging economic backdrop in several European markets, we have delivered on all three objectives as well as grown revenue and Clean EBITDA, a testament to the strength of our business model.  The business remains highly cash generative and in the past 12 months we have returned €100 million to shareholders through share buy-backs and dividends.

“The fundamentals of our two largest product verticals, sports betting and casino, remain strong and we remain excited by their prospects as we develop our mobile offering in conjunction with our expansion into a number of regulated markets.

“Our UK bingo business has returned to revenue growth and we have stabilised the position in Italy where we remain the clear leader in terms of market share.  In Spain, our new Binguez brand has started well and has secured a top three position in this newly regulated market.

“Poker is a key area of focus and we are determined to return it to growth through execution of a detailed plan that includes pooling our poker liquidity as well as repositioning our flagship PartyPoker brand. We expect both initiatives to have a positive impact on our performance, along with our recently launched FastForward Poker product.

“The regulatory landscape continues to evolve. During the first half we launched into Denmark where we have a strategic alliance with Danske Spil, the market leader, and also into Spain where we have established a top three position for each of our products.  Having secured a sports betting licence in the northern state of Schleswig-Holstein, the regulatory backdrop in Germany, our largest market in terms of revenue, remains fluid. While we continue to believe that the proposed regime put forward by the other 15 Länder fails to meet the tests set by the European Commission and the Court of Justice of the European Union, we are engaging with the German authorities to develop and secure a long-term solution for all stakeholders.”

On current trading and outlook they added: “In the eight week period ended 25 August 2012 average gross daily revenue was down 11% and average net daily revenue was down 8% versus the second quarter of 2012.  This reflects the end of the Euro 2012 Championship, the late start of the German Bundesliga and seasonality.  As expected, there has been a marked reduction in bonus rates in sports betting since 1 July 2012 following the end of the Euro 2012 Championship and as a result net daily sports revenue was marginally above that in the second quarter.  The Board remains confident about the full year result.

“The Board has declared an interim dividend of 1.72 pence per share, a 10% increase over 2011 and will consider making further share repurchases, subject to prevailing market conditions, other investment opportunities, appropriate gearing levels and the overall financial position of the Company.  Further announcements will be made as and when market purchases are made.”

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