Unibet Reports Record Sportsbook Turnover, Tighter Margin2nd November 2009 9:05 am GMT
Unibet Group plc has become the latest online gambling operator to announce a weakening of sport betting margins in the third quarter of 2009, although increasing customer demand for top flight European football helped the company to achieve record sportsbook turnover, with live betting revenues increasing 80% year-on-year.
Gross winnings for the period amounted to £30.1 million, up 2.7% versus Q3 2008, of which sports betting accounted for £8.8 million, a fall of 9% year-on-year with a gross margin of 4% versus 6.4% in 2008.
Non-sports betting gross winnings contributed a further £21.3 million, an 8.4% improvement on the same period last year, resulting in a gross profit for the third quarter of £25.7 million.
The company's operating costs for the period, which benefited from a £4.0 million foreign exchange gain, amounted to £16.8 million, with marketing costs accounting for nearly 50% of the total.
As a result the company posted an operating profit of £8.9 million for the third quarter of 2009 with a pre-tax profit of £3.01 million, down from £3.95 million a-year-ago, with earnings per share of £0.108 pence versus £0.141 in Q3 2008.
For the nine month period ended September 31st, Unibet reported 8.7% higher gross winnings revenue at £96.2 million, with operating profit down 9% year-on-year to £21.7 million. Following a major reduction in financing costs however, Unibet's pre-tax profit for the nine month period improved 76% to £20.1 million with earnings per share of £0.656 versus £0.346 in 2008.
As at September 30th 2009, Unibet's active customers totalled an all time high of 329,721 with total registered customers amounting to 3.8 million, up from 2.9 million in 2008.
"During the third quarter we saw an all time high on turnover in the Sportsbook with Live Betting as a driving force," said Petter Nylander, CEO of Unibet. "However as football results were unfavourable for sports betting operators with leading clubs winning consistently and with only a few draws in the Premier League during August and September, the gross winnings margin for the quarter was below the long term average."
Mr. Nylander noted however that margins in October have been higher than the long term average, which he said highlighted the importance of looking at margins over an annual period as opposed to over the short term.
Shares in Unibet Group plc (Co. Profile) (NASDAQ OMX:UNIB) gained 1% in early trading this morning in Stockholm to SEK185.00 per share.