Fourth Quarter Key Performance Indicators and Trading Update
Commenting on today’s announcement, Richard Segal, Chief Executive, said:
“The Group’s strong performance in the final quarter reflected a record number of poker signups,
a seasonal uplift in yield per player in our poker business and the addition of blackjack
on the 8th of October 2005. During the quarter, 44% of active PartyPoker.com players also
played blackjack, which had a substantial and sustained impact on the profitability of the
Group.
“The success of blackjack has transformed our casino business and proved very popular with
a large number of our poker players. Our scale has again proved commercially important.
Through effective cross-selling to our large customer base we are well on the way to creating
the world’s largest online casino.
“PartyGaming’s next major milestone will be the launch of the fully-integrated platform and
shared purse in the first half of 2006. We will also launch two new games, one in the first half
and another in the second half of 2006. By the end of 2006, we will up the ante again by
launching a multi-lingual and multi-currency offering. Marketing a wide range of quality
games to an increasingly international customer base is a core part of our strategy that we
believe will deliver attractive returns for our shareholders.”
During the quarter, net poker revenues (excluding skins) were up by 31% compared with the
previous year to $233.7 million and up by 17% compared with the third quarter. This growth
reflected an increase in the number of player sign-ups and an improvement in player yield, as
well as the dilutive effect caused by a large number of poker players also playing blackjack
which, while increasing their total spend with the Group, reduced their spend on poker.
The Group continued to increase the number of new real money players playing on
PartyPoker.com. The record 229,227 new players added during the quarter brought the total
number of real money signups for the year to 839,317, comfortably ahead of our target of
800,000. In line with our strategy of diversifying our business geographically, more than 30%
of poker sign-ups in the quarter came from outside the US. The strong performance in signups
contributed to a 40% year-on-year increase in active player days in the fourth quarter to a
record 13,022,466 (2004: 9,323,344).
In line with seasonal trends, yield per active player day increased to $17.9 versus $16.6 in the
third quarter, again after the offset caused by a large number of poker players also playing
blackjack. Average daily revenue in the period increased to $2.5 million (2004: $1.9 million),
an all time high for a quarter since the launch of PartyPoker.com in August 2001.
Net casino revenues were $82.3 million in the fourth quarter, substantially ahead of the $11.0
million achieved in the previous quarter. While the number of sign-ups was consistent with
previous quarters, the substantial improvement in performance of the casino business was
the result of cross-selling blackjack, through the PartyPoker.com site, from the 8th of October
2005. This resulted in a near fifteen-fold increase in active player days in the quarter to 2.4
million with 44% of all active poker players in the period also playing blackjack. There was a
corresponding and expected reduction in yield per active player day to $34.3 versus $59.2 in
the previous quarter, primarily driven by the lower average spend by players playing
blackjack. Driven by the strong performance of blackjack, daily net casino revenue reached
an average of $0.9 million per day compared with an average in the previous year of $0.1
million.
Overall marketing expenditure increased in the quarter, but distribution expenses for the
whole of the second half are expected to represent a similar percentage of revenue as in the
first six months of 2005.
Empire Litigation Update
Since 21 November 2005, Empire Online Limited ("Empire") has commenced proceedings
against the Group arising out of the transfer of PartyPoker players to PartyGaming's new
integrated platform. Such proceedings are likely to be protracted and involve claims for
substantial damages. Whilst an amicable resolution to this dispute would be preferable,
PartyGaming will vigorously defend the proceedings. Although there is some uncertainty with
any litigation, PartyGaming is confident of achieving a successful outcome.
Current Trading
Since the start of the new financial year, trading has remained strong and is in line with the
Board’s expectations. As anticipated, the level of activity on blackjack has fallen from the
very high levels achieved in the first few weeks after launch and, since the pre-close trading
update, has stabilised at an average level of over $0.8 million gross revenue per day.
The Group’s preliminary announcement of results for the year ended 31 December 2005 will
be made on 28 February 2006.
Contacts:
PartyGaming Plc +44 (0)20 7337 0100
Peter Reynolds, Director of Investor Relations
John Shepherd, Director of Corporate Communications
Financial Dynamics +44 (0)20 7831 3113
Edward Bridges / Juliet Clarke
Conference call
Friday 27 January 2006
For analysts and investors there will be an opportunity to put questions to Richard Segal,
Chief Executive, and Martin Weigold, Group Finance Director, by way of a conference call.
The details of the call are as follows:
9.20 am Please call +44 20 7162 0125 (UK) or +1 866 803 8344 (US)
Password: PartyGaming
9.30 am Conference call starts
A recording of the conference call will be available for a period of seven days from 27 January
2006. To access the recording please dial one of the following replay telephone numbers:
Replay no: +44 20 7031 4064 (available for 1 week) (UK)
Replay passcode: 689970
US Replay no: +1 954 334 0342 (available for 1 week) (US)
Replay passcode: 689970
All times are GMT.
PartyGaming PLC 4th Quarter Results (PRTY.L) PDF FILE
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