bwin.party woes continue in Q1-2015

The troubled online gambling group Bwin Party Digital Entertainment has posted another mediocre quarterly report, recording that revenues year on year slipped a further 6 percent, although they were up a similar amount when compared with the preceding quarter.

Q1-2015 revenue was Euro 155.3 million, with nationally regulated and/or taxed markets represented 62 percent of total revenue – up from last year’s 56 percent.

Mobile/touch contributions represented 30 percent of gross gaming revenue (2014: 17 percent).

The company reported that it was on-track to achieve Euro 15 million on cost savings this year following completion of its technology integration, the sale of non-core businesses and more efficient, product-led marketing spend.

The non-core asset disposal programme is similarly on-course to generate proceeds of between Euro 30 million and Euro 50 million in line with previous guidance

Current trading revenue is up 6 percent, driven by a 25 percent y-o-y sports betting boost, and business remains on target for the year, Management reported.

The report confirms that the company is in acquisition negotiations with a number of parties ..

Norbert Teufelberger, CEO said:

“The Group has delivered solid growth since Q4 2014 on the back of continued mobile expansion.  However, a lower than expected gross win margin in sports betting as experienced by other gaming operators and continued challenges in poker held back our year-on-year revenue performance during the first three months of 2015.

“Despite slightly lower revenue and additional taxes, continued careful management of our costs and further operational efficiencies have meant that Group Clean EBITDA margins for the first quarter are ahead of the Board’s expectations and also ahead of last year.

“In the United States, draft legislation is being considered in both California and Pennsylvania.  On the back of the strength of our US platform and existing partnerships (that now includes a market access partner in Pennsylvania), we believe that we are well-placed to secure a leading position in each of these markets should a suitable regulatory and fiscal framework be introduced.”

The company reported that average daily net revenue was down 13 percent year-on-year due to lower than expected gross win margins in sports betting, continued declines in poker and the introduction of VAT to certain gaming activities across the EU with effect from 1 January 2015.

Sports betting net revenue was down 10 percent to Euro 58 million in the quarter. Casino and other games saw net revenue falling by 11 percent year-on-year to Euro 46.8 million.

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