March 05, 2008

Garber to leave PartyGaming as yearly net revenues rise 41%

PartyGaming chief executive Mitch Garber will not be renewing his contract with the company beyond 1 May 2009. Garber, a Canadian national, said he planned to return to North America with his family and will remain with the firm until a successor is found.

Garber said: “PartyGaming is an extraordinary company. The challenges we have faced and overcome over the past 18 months have been no less extraordinary. There is never a good time to announce that you intend to leave a company, but I personally take great pride in the fact that the Company is delivering on its business strategy and is in great shape to exploit its full potential in the future.”

PartyGaming announced a 41% rise in net revenue from continuing operations for the 12-month period to the end of December 2007 to US$476m, compared with US$325m in 2006. Total group revenue however dropped 57% to US$476m, compared with US$1.1bn in 2006, reflecting the company’s exit from the US market after UIGEA.

The company recorded a drop in after tax profits to US$41.6m, compared with US$128.4m during the same period last year, while pre-tax profits came in at US$6.7m, compared with a loss of US$77.4m in 2006.

Clean EBITDA rose 119% to US$111.7m, compared with US$50.9m last year.

Non-executive chairman Michael Jackson commented: “These results are a testament to our chosen business strategy, keep us at the forefront of the industry and provide us with a robust and scaleable platform for growth. This has all been achieved whilst adopting a conservative, but we believe responsible view of the regulatory environment. Whilst our approach means that we continue to forego revenue opportunities in the short-term, we believe that such revenue streams are at risk and we remain confident that our chosen strategy will generate superior returns for shareholders over the long-term.”

Commenting on Mitch Garber’s decision to leave PartyGaming, Jackson said: “The board respects his decision to return to North America. Mitch has been instrumental in refocusing and rebuilding the business and delivering strong financial results in challenging circumstances. He will remain as CEO until a successor is found and has also agreed to remain available thereafter to ensure an orderly and seamless transition.”