bwin.party begins formal process to sell Ongame

bwin.party digital entertainment plc said Thursday that it has commenced a formal process to sell the company’s Ongame B2B poker network, with a sale expected to be completed by the end of the year.

In a statement to shareholders at the company’s Annual General Meeting in Gibraltar later today, the board of bwin.party will say that current trading is broadly in line with management expectations, despite lower than expected sports margins due to a favourable run of events for customers in May.

While there has been an improvement in new player sign-ups in poker following action taken by U.S authorities against a number of the companies online poker rivals, this has not had a material impact on poker revenues. The company said that this is because new players represent just a small proportion of the overall player base.

Casino continues to perform well, while bingo has been slightly softer than expected in the period, the company said.

Since the completion of the merger, bwin.party said that it continues to make progress on implementing the plans made prior to completion, with the company on-track to deliver the full €55m of annualised synergies by 2013.

As part of its stated strategy to recycle surplus assets, the company confirmed that having taken some initial soundings from interested parties, it has commenced a formal process to sell its Ongame B2B operation, a leading online poker network including a technology platform.

bwin.party said that the company expects the sale to be completed by the end of the year.

Having undertaken a comprehensive review of its capital and distribution policy, bwin.party confirmed that it will commence payment of a dividend at the half year results to be announced on August 31st.

Adopting a progressive dividend policy, whilst maintaining an appropriate level of dividend cover as measured against the company’s free cashflow, bwin.party intends to pay out €15m as an interim dividend payable in October and €15m as a final dividend payable in May 2012.

Thereafter, the company intends to target a payout ratio of no less than 30 per cent of normalised annual free cashflow with the interim dividend representing approximately half of the total annual dividend.

bwin.party said that it will also implement a share buyback programme, subject to market conditions and shareholder approval later today, of up to €75m. The programme will remain in place for one year, with all shares purchased to be cancelled.