Company Reports Lower Than Expected Interim Results

Interim results as of the end of June were reportedly very disappointing for online casino company 32Red, which is based in Gibraltar and operates a poker and sportsbook operation.

Because of a situation of mixed trading, according to the online gambling company, results have been weak and may not meet the full year market expectation. The distractions caused by the World Cup slowed down performance leading to a slower than expected recovery. Even though there was an unexpected increase in the number of those actively playing at the online site by 60 percent, on the average the amount wagered by each player went down to GBP 523.

Nevertheless, investors were assured by the report that the key performance figure of casinos yield per each player, was continuing to receive close attentions.

From its low 2005 base, poker room operations sustained considerable growth. Revenues in fact more than doubled, and the number of active players in the first six months of 2006 tripled. Regardless of these what might be framed as being heartening statistics, there was evidence of a somewhat weaker performance than what had been expected for 2006. The result being that the outstanding growth rate for 2005 is not being maintained.

The launch of Svenska Spel’s online poker room combined with the aggressive rakeback tactics being shown by the competition, may have been contributing factors. Counting from the middle of March 2006 and forward, these were both factors that had a negative impact on revenues. The situation was only made worse by the advent of the FIFA 2006 World Cup matches, resulting in the month of June, in a substantial decline in levels of activity.

After the early June acquisition of Bet Direct, Sportsbook operating results did not approach expectations. 32Red continued dealing in the FIFA World Cup as well as the Royal Ascot horse racing festival up until the end of June. The gross winnings were off target by GBP 100,000 and Ascot trading resulted in a small negative margin. During the 2006 FIFI World Cup, trading resulted in a win margin of 9.8 percent gross.

32Red’s CEO, Ed Ware, reported that 32Red ultimately demonstrated a growth in revenues for the period in question. But the slow down throughout the industry resulting from the FIFA World Cup, during the second fiscal half abide up until today, has hampered the quicker recovery that was expected. Ware says that his company believes that their June acquiring of Bet Direct will ultimately considerably improve the degree and variety of the business, while still noting that a tough Goodwood combined with the one-off costs and incurred expenses, has negatively affects the company’s profit making.

In spite of the fact that the company is reporting a less than anticipated performance, it has shown a profit. The actual results are that group revenues are up 48 percent for the year reaching, GBP 6.2 million. Of this, the casino itself accounts for GBP 5 million of the total. Before tax profits for the poker and casino operation came to GBP 1.1 million, with the recorded numbers of active customers mounting to 44,539.

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