PRTY Partygaming

 

TIDMPRTY 
 
RNS Number : 3735V 
PartyGaming Plc 
09 July 2009 
 

 
 
9 July 2009 
PartyGaming Plc 
 
 
Launch of INTRALOT Poker 
Pre-close Trading Update 
 
 
As part of the Group's agreement signed just three months ago with INTRALOT S.A. 
('INTRALOT'), we are pleased to announce the launch of the www.intralot.it poker 
site.  Following the receipt of certification from the Italian regulator, AAMS, 
the INTRALOT poker service is now being rolled out and will join the Groups 
Italian poker network. 
 
 
While the Group's Italian poker network has only been operating a few weeks, 
with the expected introduction of poker cash games before the end of the year, 
the Board is hopeful that Italy will prove to be a profitable and exciting 
regulated online gaming market in the medium to long-term. 
 
 
Pre-Close Trading Update 
 
 
Since 6 April 2009, Group revenue has remained robust and despite the impact of 
seasonality, is in line with that achieved in the first quarter of 2009. 
 
 
Casino revenue has shown a significant increase from the first quarter despite a 
fall in casino active player days due to seasonality and lower levels of 
cross-sell from poker.  This revenue growth has been driven by the Group's main 
casino site, PartyCasino, which accounts for over 70% of the Group's casino 
revenue, and continues to perform strongly on the back of a substantial increase 
in the number of games offered as well as the launch of a dedicated affiliate 
programme and major international marketing campaign, both of which commenced 
last month. 
 
 
As expected, poker has seen a marginal reduction in active player days versus 
the first quarter due to seasonality and continued strong competition from 
US-facing sites. However, an enhanced player loyalty programme, improved player 
promotions and a new offline marketing campaign saw each of these metrics 
improve last month. As a result of these initiatives, poker yields have been 
softer than in the first quarter due to increased bonus and player loyalty 
costs, resulting in a reduction in poker revenue versus the first quarter. 
 
 
Sports betting revenue was down on the previous quarter reflecting a reduction 
in betting volume due to the end of the season for European football, that 
remains the single most popular sport for betting customers. 
 
 
Whilst bingo is currently small in the context of the Group, we believe it 
represents a significant opportunity with the global online bingo market 
estimated at $1.5 billion per annum. The B2B deals signed over the past few 
months with CIRSA, DM plc and Channel 5 are expected to benefit bingo revenues 
during the fourth quarter of 2009. 
 
 
In an effort to capitalise upon the recent seizures of player funds from 
US-facing sites by the United States Attorney's Office of the Southern District 
of New York, the Group has chosen to increase its marketing spend in certain 
territories and, whilst this has already had a positive impact on player 
numbers, it is also expected to lead to distribution costs being slightly higher 
than our previous full year guidance of 38-40% of net revenue.  However, 
continued cost savings and favourable currency movements have meant that lower 
staff and overhead costs have mitigated the increase in marketing costs and 
consequently, Clean EBITDA1 margins for both half year and the full year results 
are still expected to be in line with that achieved for the full year in 2008. 
 
 
The Group's interim results will be announced on 28 August 2009. 
 
 
Commenting on today's announcement, Jim Ryan CEO said: 
 
 
"The Group's strategy remains on-track and I am pleased that many of the seeds 
we have sown over the past year are now beginning to bear fruit.  The 
improvements to our poker product and loyalty programme, the addition of 
INTRALOT to our Italian poker network and the launch this week of bingo and 
casino for DM plc are clear examples of this.  PartyCasino, the world's largest 
online casino, continues to go from strength to strength, with strong double 
digit growth quarter-on-quarter despite difficult economic conditions. We look 
forward to the rest of the year with confidence." 
 
 
1EBITDA before payments associated with the Group's Non-Prosecution Agreement, 
reorganisation costs and non-cash charges relating to share-based payments. 
 
 
Contacts: 
 
 
+--------------------------------------------+---------------------------+ 
| PartyGaming Plc                            | +44 (0)20 7337 0100       | 
+--------------------------------------------+---------------------------+ 
| Peter Reynolds, Group Director, Corporate  |                           | 
| Affairs                                    |                           | 
+--------------------------------------------+---------------------------+ 
| John Shepherd, Director of Corporate       |                           | 
| Communications                             |                           | 
+--------------------------------------------+---------------------------+ 
|                                            |                           | 
+--------------------------------------------+---------------------------+ 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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