Continuing Losses Fail to Deter Betbull’s German Focus

Despite falling returns during the course of 2009 with net gaming revenues down 22% to €9.1 million for the nine month period ended September 30th, betbull Holding SE said Monday that it remains confident about the long-term opportunity for retail betting in Germany as well as the continued development of its business in Spain.

Betting turnover fell 15% to €63.1 million during the period with gross hold down 24% to €10.6 million, reflecting the difficult trading experienced during the second quarter in Germany where legislative restrictions in certain regions have impacted the company's results.

Despite falling revenues, Betbull's personnel costs increased 12% year-on-year to €5.3 million, equating to 58% of the company's net gaming revenue for the nine month period. Costs relating to premises, mobility and distribution, and other operating expenses accounted for a further €4.0 million.

The fall in revenues meant however that direct costs and betting taxes fell by 8% in the period to €1.9 million, pushing the nine month gross profit down 26% versus the same period last year to €7.4 million. As a result the company incurred a net loss of €3.0 million compared to a loss of €1.2 million a year ago.

"The first nine months of 2009 have produced declining trading figures due to the legislative position in Germany," said Simon Bold, Director of betbull Holding SE. "The company has been adversely affected by a restriction on trading in certain regions, but continues to remain confident about the long term opportunity for retail betting in Germany and is able to adapt to the challenging short term circumstances."

The company's Spanish venture Betbull Bwin Espana (BBE), in which betbull recently took over full ownership from bwin (more), finished the quarter with six premises open, four own shops and two agencies.

"The initial signs are very promising, particularly in the case of own shops, which in addition to betting revenues, are also benefiting from recent legislative changes in the gaming machine sector which permits the installation of b3 machines and the introduction of higher jackpots."

Bold said that BBE would continue to pursue the concept of predominately fully licensed own shops which have the possibility to offer electronic roulette, poker, bingo and traditional slots.

"2010 will see further betting licences being available in Spain, with several regions already having published draft betting legislation. We are pleased with the development of our business to date and will seek to increase our representation in Spain," added Bold.

As at September 30th betbull held cash and cash equivalents of €4.9 million versus €9.2 million a year ago.

Shares in betbull Holding SE (Co. Profile) (BETB.VI) are currently trading at €1.22 per share in Vienna this morning.