Leisure & Gaming Continues 2009 Revenue Growth14th October 2009 7:45 am GMT
Benefiting from increased contributions from the company's Italian online poker offering as well as strong growth in the Greek online business, Leisure & Gaming plc said Wednesday that net winnings amounted to €4.6 million for the third quarter of 2009, an increase of 44% on the corresponding period last year, in line with management expectations.
Total amounts wagered increased substantially for the quarter, up 103% year-on-year to €27.0 million, with sports betting contributing €16.4 million versus €12.7 million last year. Net winnings from sports betting increased by 8% to €2.8 million, despite margins being lower than expected in the first few weeks of the football season with most of the favourites winning.
Casino net winnings fell 50% to €0.2 million following the closure of the Acropolis casino last year, while lotto and skill games generated net winnings of €0.1 million, down from €0.2 million last year. Poker tournament fees generated €10.3 million earning net winnings of €1.5 million.
The company's online business in Greece generated over €3.2 million in activity during the quarter, up from €0.7 million in the corresponding period last year.
Cost of sales increased 44% to €3.6 million, including commissions payable to partner networks, betting duties, customer bonuses, payment processing costs, as well as the sponsorship of Palermo FC and increased IT development costs.
As a result of the growth in net winnings, the company reported a gross profit of €1.0 million, up 11% year-on-year. Including administrative costs of €0.9 million, operating profit amounted to €0.1 million for the quarter compared to last year when the company broke even.
"Results for the traditionally quiet third quarter showed good growth from last year with continued diversification both in terms of geography and products," said Richard Creed, CEO of Leisure & Gaming plc.
"Poker activity continued through the summer months, with only a small dip in August. Sports margins were lower than expected because of the success of favourites in the first few weeks of the season; however, business volumes have been excellent, with active customer numbers at a record high."
The company said that it has reached an agreement to open a number of land-based operations in Greece as soon as legislation permits, with the newly elected Greek government looking to do so by the end of this year.
Shares in Leisure & Gaming plc (Co. Profile) (AIM:LNG) have gained 3.33% to currently trade at 10.85 pence per share in London this morning following the announcement.