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10.10.2005 Party Gaming has released its first interim report this week, covering the six months to end June 2005 - its first since listing on the London Exchange earlier this year. The report showcases revenues up 81 percent to US$437.4 million (2004: $241.5 million) reflecting continued strong growth in poker, although chief executive officer Richard Segal writes: "As expected, whilst the online gaming market and poker in particular continues to show strong year on year growth, the rate of growth is continuing to moderate."
Similar comments last month have been blamed for a cooling off of some interactive gaming stocks.
Basic earnings per share were up at 4.5 cents (2004: 3.6 cents)
The company reported improved operating cashflow up 67 percent to $270.9 million (2004: $162.0 million) with net debt reduced by $231.2 million to $119.5 million in the reporting period.
In the poker operations, key performance indicators showed strong growth in real money sign-ups which were up by 73 percent and active player days rose 102 percent although there was a 7 percent decline in yield per active player day to $17.8 (2004: $19.2)
On the casino operations there was a small increase in active player days, with yield per active player day up 3 percent to $76.4.
Commenting on the results, Segal said: "The Group's performance further demonstrates the strength of our brands, the quality of our gaming products and the financial attractions of our business model.
"PartyGaming continues to enjoy strong positions in each of its core markets. As expected, whilst the online gaming market and poker in particular continues to show strong year on year growth, the rate of growth is continuing to moderate. As it does so, the Group will continue to adapt its marketing strategy and infrastructure to provide greater focus on customer retention and player value.
"Looking forward, the Group's financial strength, strong market positions and scale provide a unique platform from which to grow the business through further international expansion, the development of new gaming products and additional distribution channels."
In June 2005, the PartyPoker network had a 51 percent market share in ring games and a 40 percent market share in online tournaments. It was the driving force behind the group's results, reveals the report, delivering an impressive financial performance with overall poker revenues up by 89 percent to $412.0 million (2004: $217.5 million).
The casino business made steady but modest progress with revenues up 6 percent to $25.4 million (2004: $24.0 million) With the management team having been focused until recently on meeting the high levels of demand in poker, the casino operation has yet to reap the benefits of having a greater level of management attention. This is expected to have a positive impact on the casino business' performance in the second half of 2005.
Marketing operations have been effective, and the management team has increased its focus on consolidating its position in the US poker market as well as expanding its presence in a number of international markets such as the UK, Scandinavia, Germany and Australia.
During the reporting period, the proportion of real money sign-ups on PartyPoker coming from countries outside the US increased from 10 percent to 19 percent in the period. Revenue growth in the US year on year was 77 percent compared with 2004 whilst outside the US it was 110 percent. As a result, the percentage of total revenue generated outside the US in the first half was 14 percent compared with 12 percent in the previous year.
A detailed programme of international marketing campaigns has been scheduled, with the objective of continuing to grow the group's international revenues in the second half.
The report reveals that there has been substantial development of the group's customer service infrastructure with the addition of a further 120 service operator workstations in the Support operations in Hyderabad, India. There are now over 370 customer service operators providing customer support on a daily basis and in the six months to 30 June 2005 the Group had over 2 million contacts with PartyGaming customers - 1.2 million by phone and 0.8 million by email. This compares with a total of 1.4 million contacts in the same period in 2004.
Party Gaming has become one of only four online gaming operators to have been certified by Gamcare in the UK, recognising its strength and depth in responsible gaming infrastructure and commitment. This commitment to responsible gaming has been further enhanced by the establishment of an Ethics Committee within the Board of Directors.
PartyGaming Plc operates Party Poker the world's largest online poker room, as well as other online gaming sites including Starluck Casino, PlanetLuck.com, PokerNOW.com and PartyBingo.com.
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