PartyGaming Q1 Revenue Increases 27% To $127.1 Million
May 6, 2010 8:01 amPartyGaming have just released their Q1 revenue results, which show a 27% rise in the online gambling group’s revenue to $127.1 million.
PartyGaming’s casino, bingo and sports betting businesses accounted for much of the strong year-on-year (YOY) growth experienced by the group, with casino revenue up 25% to $51.2m, sports betting up 58% to $7.1m and bingo revenue up 4% to $17.7 million.
The one business area bucking the positive trend was PartyPoker, which saw its revenue drop by 11% YoY to $47.8m, with the major poker sites Full Tilt and PokerStars believed to be profiting from PartyPoker’s policy of not accepting bets from US players.
Commenting on the figures, PartyGaming CEO Jim Ryan said: “While Clean EBITDA margins for the year to-date were ahead of our expectations in the first quarter of 2010, we are maintaining our previous full year guidance for 2010 Clean EBITDA margins of approximately 28%.”
Despite the overall solid figures, shares in the company initially fell 3% to 277p, which would give the company a valuation of around £1.13 billion. Part of the reason for the drop was a mixed review by analysts, with the ‘nay-sayers’ believing that regulated markets, increased competition and increased taxes will further squeeze PartyGaming’s revenue and operational flexibility,thus limiting its potential for future growth.
However, analyst such as James Hollins of brokerage Daniel Stewart, have taken a different view and believe the company’s shares are good value. As he explains:
“The shares offer solid long-term upside from continued penetration of the European online gaming markets, possible US re-entry and likely M&A activity. We have a Buy recommendation.”