Sportingbet To Pay Dividends After Reporting Strong Growth

Sportingbet (SBT.L), the British sports betting and online gambling company, has shown “good growth” in its latest financial figures having posted full-year pretax profit of £22.3 million compared to just £1.2 million the year before.
Favourable currency exchanges helped the company’s results and after adjustments its operating profit was up 26% to £31.1m which exceeded analyst expectations of £29m.
The online gaming group was almost wiped out following the US introduction of the UIGEA in October 2006 which saw Sportingbet withdraw from the US market and forfeiting 80% of its profits.Since then Sportingbet has been tring to resolve differences with the US Justice Department regarding its previous operations in the country and is trying to iron out a financial settlement to avoid prosecution from the DoJ along the lines that PartyGaming took.
Several large European companies are purported to be considering launching a takeover bid for the business but, as broker Davy explained: “A stumbling block may be the legacy issues relating to the group’s previous US operations but, should these be resolved, it is quite likely that the group would have a line of suitors,”
Sportingbet’s main business is sports betting and it is aiming to increase its current revenue from the UK market from its current level of 5%. It is presently the sponsor of Wolverhampton Wanderers football club and also sponsors horse racing.
Sportingbet’s overall results have been positive and earnings per share have moved to +2.4p from a negative 0.9p a year earlier.The news was received well by shareholders and shares in the company rose 6.6% to 72.50p in early trading.
Sportingbet has signalled its intentions to move from AIM to the main LSE in 1st quarter 2010. Andrew McIver, chief executive, explained: “It is a natural progression for us. With a market capitalisation of £300m we are at the top end of Aim, and Aim has underperformed the main market.”