Written On 4/6/11 By Lenny Wasman :
Overall, a positive year for online gambling group
The publicly listed online gambling group Unibet plc has posted its latest Q4 and full year 2010 financial results, showcasing a profit after tax for the fourth quarter up at GBP 10 million (Q4 2009:GBP 8.4 million, and profit after tax for the full year 2010 of GBP 32.4 million (FY 2009: 26.8 million).
Other financial highlights include:
• Gross Winnings Revenue amounted to GBP 35.5 (42.1) million for the fourth quarter of 2010 and GBP 147.5 (138.3) million for the full year 2010.
• Profit from operations amounted to GBP 9.6 (11.0) million for the fourth quarter of 2010 and GBP 34.2 (32.8) million for the full year 2010.
• Profit before tax for the fourth quarter of 2010 amounted to GBP 9.2 (8.7) million. Profit before tax for the full year 2010 amounted to GBP 33.8 (28.9) million.
• Operating cash flow before movements in working capital amounted to GBP 11.7 (13.3) million for the fourth quarter 2010 and GBP 44.2 (42.7) million for the full year 2010.
• Number of active customers at the end of the Q4 period had declined to 308,872 (365,865).
The board of directors has decided to hold on a dividend for 2010, preferring to continue the build up of cash reserves with an eye on new acquisitions; if no opportunities arise, the cash reserve may be distributed instead to shareholders.
Group chief executive Henrik Tjärnström reported that the company has delivered a strong performance across its core markets, with the 15 percent growth recorded over the prior quarter demonstrating the underlying resilience of the Unibet business model.
"Even though the comparisons with the fourth quarter of 2009 were challenging, we have been able to improve our EPS through tight control over our operating costs, including improved marketing focus, Tjärnström said.”We also continue to invest according to plan in the development of Kambi Sports Solutions and in the core Unibet platforms to address the evolving markets in Europe.”
Turning to the current trading pattern, Tjärnström reported that the first six weeks of 2011 had seen healthy revenue numbers for the group across its major markets.
"In particular, mobile betting is showing excellent growth combined with strong performances in Casino and Games,” he revealed.
“We will continue to focus on our core markets to strengthen our position in the changing European landscape. Unibet will apply for licenses in the markets where conditions are evaluated as sound and profitable and with a low risk seen from a shareholder value perspective."
The Unibet report examines significant company events over the fourth quarter, observing that in late October the company had successfully acquired French licensing. However, Management has already flagged the difficulty of making a reasonable return on investment under the present regulatory and tax regime, and the company will therefore carry out a final business assessment as to whether resources can better be used in other markets, or to roll out poker on the unibet.fr platform during 2011. Sportsbook and French horse racing could follow towards the end of 2011.
On the B2B front, the group's Kambi Sports Solutions subsidiary signed an agreement to supply Nordicbet, Triobet and Tobet with the pool betting products Supertoto and Superscore.
The company has extended its revolving credit facility, and paid off a further Euro 16 million, leaving only Euro 8 million outstanding.
In Italy, the group has launched Unibet.it, its dedicated Italian platform where players are offered Sit & Go, scheduled and multi-table poker tournaments on the Ongame P5 Poker Engine. During the second quarter of 2011 poker cash games, casino offerings and sports betting will be added, increasing profitability.
Unibet currently operates in 28 distinct internet gambling markets, providing services as required by some 5 million registered players. Operations in the Nordic states have been especially successful, growing by 13 percent over the year.
Discussing the nation-by-nation regulatory trend in Europe, Tjärnström observed that Unibet is well positioned to address the challenges this presents, but in common with its competitors, it will face situations where unrealistic trading conditions prevail.
"It is our aim to fight for a well regulated market with fair taxation, reasonable returns, responsible practices and an attractive product offering," he said.
"Unequal trading conditions simply lead to decreased revenues for operators and governments, and encourage the black market.
"Unibet will apply for licenses in the markets where conditions are evaluated as sound and prospects are good and there appears to be a low risk from a shareholder value perspective. Based on our experience we know what customers want. If there is a better offering elsewhere, they will find it. Therefore, the terms in a re-regulation must be competitive otherwise the customers will disappear to unregulated markets."
Live betting, streaming and mobile channels are all set to grow in the future, the chief executive predicted, noting that Unibet was well positioned to embrace and profit from these opportunities.
General market growth in Europe may slow somewhat due to excessive taxation levels in some countries, but will continue to expand, he said, adding that the new licenses obtained by the company in major nations would enable it to compete more fairly with previously established monopolies.