October 25, 2007

Party’s revenues continue to rise

PartyGaming’s third quarter key performance indicators have highlighted a 24% annual increase in group revenue to US$116m (£56m), compared with US$93.3m in 2006, and a 5% rise on the previous quarter.

Poker revenue fell 3% to US$74.8m, compared with US$76.9m in 2006, but was up 3% on the second quarter. Much of the group’s revenue was generated by a strong performance from its casino, up 158% to US$36.7m, compared with US$14.2m in 2006. Sports-betting income rose 91% to US$4.2m, compared with US$2.2m last year and in the previous quarter.

Party said its quarterly poker results reflected “a full period benefit to the operational changes introduced during the second quarter of 2007 that helped to deliver a 10% increase in yield per active player day versus the previous quarter to US$13.2”.

The company said much of the performance had been driven primarily by strong growth in its casino and was achieved despite a 14% drop in yield per active player day from US$20.3 in 2006 to US$17.4 in 2007, following the loss of many of Party’s high-spending customers after the passing of the Unlawful Internet Gambling Enforcement Act and Party’s related exit from the US.

Third quarter new player sign-ups were down 14% on 2006 to 129,7000, reflecting the quieter summer months, however Party said this followed a particularly strong first half to the year, with the number of new player sign-ups up 44% on the equivalent nine month period last year.

The company said fourth quarter trading had increased 9% on the previous quarter to US$1.6m and active players per day averaged 65,000, generating average daily revenues of US$938,000 and casino daily revenues of US$569,000.

Analysts from Deutsche Bank said the strength of current trading and the continued development pipeline “give us increased confidence that our 2008 estimate forecasts should be achievable”.