Bwin.party revenues up despite poker decline
Casino/games overtakes sportsbook as biggest revenue generator - analysts suggest signs of recovery for operator after difficult few months.
A strong performance from bwin.party’s casino and games segment has helped the operator record a 3% pro-forma year-on-year revenue rise for the first half of 2012.
Revenues of 139.7m from the vertical, a year-on-year increase of 12.4%, saw it overtake sports betting (up 1.9% to 128.1m) as the biggest revenue generator among the four main product verticals.
However poker continued its decline, with revenues for the six months ended 30 June dipping below 100m – the 96.4m total represents a year-on-year decline of 8.1% as the operator prepares to migrate bwin’s players onto the main PartyPoker platform.
Bwin.party co-CEOs Jim Ryan and Norbert Teufelberger (pictured) said in a statement: “Poker is a key area of focus and we are determined to return it to growth through execution of a detailed plan that includes pooling our poker liquidity as well as repositioning our flagship PartyPoker brand.”
They also drew reference to the recently launched Fast Forward poker product, saying they expected it to have “A positive impact on our performance.”
In an interview this morning published on bwin.party’s corporate website, Teufelberger was also positive about the operator’s newly launched social media strategy, with Win Interactive launched in May following the acquisition of Ukrainian development studio Orneon.
“In hindsight, it seems right that we have chosen to go down the path of “build and partner” strategy. We have now access to 300 very experienced developers. We have already launched two games,” explained Teufelberger.
“We are launching very soon our first in-house built game, a bingo game and we are making actually big progress. We are ahead of our business plan, which we have drawn up just a few months ago,” he added.
While the operator has warned that its H2 numbers will likely be impacted by regulatory developments in Germany, analyst Ivor Jones of Numis has suggested “2013 should, in our view, be the year that bwin.party gets its groove back.”
Issuing a ‘Buy’ recommendation, Jones says “The period of turbulence appears to have passed,” and suggests “When we look at the performance of competitors like 888 and Paddy Power, flying high with a stable team and business, we feel optimistic that bwin.party will get there too.”
However analyst Nick Batram of Peel Hunt has issued a ‘Hold’ recommendation, saying “We don’t believe there is any rush to buy at the current point in time.
“There is a lot of work going on under the bonnet at bwin.party but much of this is being overshadowed by regulatory developments and structural challenges in the poker market. It may be some time before we get a better view of whether the hard work will deliver the required improvements at the bottom line,” added Batram.