February 20, 2008

Marketing costs hit Unibet profits

European egaming giant Unibet suffered sharp drops in full-year and fourth-quarter profits to the end of December 2007, the company revealed today.

Profit before tax for the 12-month period fell to £20m (€26.4m) compared with £28.5m in 2006, while profit before tax for the three-month period was down to £2.7m compared £7.4m in 2006.

However, turnover for the year rose to £81.4m from £71.8m in 2006, and to £24.5m in the fourth quarter from £19.4m over the same period last year.

The company said it had experienced “unsatisfactory earnings” and “exceptional charges” in relation to the exit of the company’s cycling team from the Pro Tour cycling calendar and “increased marketing costs” related to “revenue share and affiliate programme costs”, which put pressure on earnings.

On the positive side, quarterly sportsbook margins were 7.5% thanks to favourable results while Unibet’s poker product in Sweden experienced 10% growth on a quarterly basis. The active customer base increased 15% compared to the previous quarter for both Unibet and newly-acquired bingo operator Maria Holdings.