bwin.party hit by higher gaming taxes, revenue to fall in 2013

Online gaming group bwin.party digital entertainment reported a sharp fall in profits in 2012 owing to an increase in gaming taxes and lower sales, and said that the revenues are expected to decline further in 2013.

Online gaming group bwin.party digital entertainment reported a sharp fall in profits in 2012 owing to an increase in gaming taxes and lower sales, and said that the revenues are expected to decline further in 2013.

Pro forma revenue totalled €801.6m in the 12 months to December 31st, down 2.0% from €816m in 2011.

The Sports Betting and Casino & Games divisions registered growth during the period, but this was offset by a flat performance in Bingo and sharp decline in Poker.

The performance in Poker reflected "challenging market conditions" in several markets particularly in southern Europe, bwin.party said, as the industry was hit by ring-fencing of certain newly regulated markets and the impact of gaming taxes.

Clean earnings before interest, tax, depreciation and amortisation fell 17% year-on-year from €199.3m to 164.9m to reflect flat revenue, increased gaming taxes and compliance costs.

The company was hit by the introduction of a 5.0% turnover tax on sports betting in its core market of Germany in July, though it said that the majority was passed on to customers.

bwin.party registered a loss before tax of €23.5m for 2012, significantly lower than the €422.9m loss made in 2011, mainly due to a sharp decrease in impairment losses.

Nevertheless, the final dividend was raised by 10% to 1.72p per share, bringing the total payout for 2012 to 3.44p per share, up from 3.12p previously.

Revenues to slip in 2013bwin.party said that 2013 revenue is now forecast to be slightly lower than current market estimates after some "user experience issues" in January and December following the dotcom migration (to a single technology platform) in December 2012.

The company also said that current trading has been impacted by decisions to increase its focus on nationally regulated markets and on high-value customers. Some 35% of gaming revenues came from nationally regulated markets in December 2012 and 38% of gaming revenues were subject to gaming taxes, up from 26% and 26% the year before, respectively.

As such, average gross daily revenue in the year to date has fallen by 7.0% against the fourth quarter.

Chief Executive Officer Norbert Teufelberger said: "The migration problems have now stabilised and while the user experience issues coupled with the actions taken to-date mean that 2013 total revenue is expected to be lower than current market estimates, associated cost savings mean that the board remains confident about the full year result."

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Here’s why you really should own at least some bitcoin
Bitcoin

Here’s why you really should own at least some bitcoin

While bitcoin is having a quiet year – at least in relative terms – its potential to become the default cash system for the internet is undiminished, …
16 Sep 2020
Will a second wave of Covid lead to another stockmarket crash?
Stockmarkets

Will a second wave of Covid lead to another stockmarket crash?

Can we expect to see another lockdown like in March, and what will that mean for your money? John Stepek explains.
18 Sep 2020
Central banks want politicians to take charge – but what will they do?
US Economy

Central banks want politicians to take charge – but what will they do?

The US Federal Reserve has come to the end of the road in terms of what it can do to accelerate any recovery, says John Stepek. It's over to the polit…
17 Sep 2020