Party Poker Site Relaunch Brings Winnings

Saturday November 22, 2008

Online gaming firm PartyGaming Plc said the relaunch of its Party Poker site was stemming a decline in its poker customers.

The September overhaul of the world's fourth biggest poker site had resulted in a 'material uplift' in player numbers, the firm said.

Third-quarter poker revenues fell 15 per cent to £43.3m, with poker sign-ups down 12 per cent, as the company deferred marketing spend in the run-up to the relaunch at the end of September.

PartyGaming is battling against the impact of a stronger dollar on revenues, the sharp downturn in the economy and fierce competition for poker players.

But in the first six weeks of the final quarter, to November 11, new poker player sign-ups averaged 1,220 a day, the company added, helped by a new bonus system offering to match customers first deposits of up to 500 dollars.

There were more than 7,000 active players a day on the site, although overall group revenues were down seven per cent on the third quarter, due to the strength of the dollar against sterling and the euro.

Chief executive Jim Ryan said and group was making 'solid progress' despite difficult headwinds faced by the sector. The stronger dollar, though it was weakening revenues, was having a benefit on sterling and euro costs, he added.

Overall group revenues were flat at £78.2m compared with the same quarter last year, as poker declines were offset by Gamebookers, Party Bingo and Party Casino takings. A marketing push in these areas boosted overall player sign-ups six per cent in the third quarter.

Shares in PartyGaming fell two per cent, despite the company holding its guidance on full-year underlying earnings and margin targets.

Numis Securities analyst Richard Carter said his forecasts were unchanged, highlighting the company's cash generation and takeover potential.

On the fourth-quarter revenue decline, he added: "The US dollar is on average 13 per cent higher than Q2, therefore implying underlying revenue growth of six per cent."