Affected by the sale of its Turkish website and the suspension of its Spanish business, Sportingbet has seen a 21 per cent drop in net gaming revenue for Q3.
The group reported net gaming revenue of £43.4m for the third quarter ended April 30, 2012, compared to £54.7m for Q3 2011. Spain is a significant part of Sportingbet’s European operations and the closure of the website has significantly affected its results. The group expects Spanish licences to be issued in early June 2012, which will allow it to request the court to lift the injunction.
In Australia, total net gaming revenue for Sportingbet was up 116 per cent to £18.1m.
''Our Australian business, which accounts for over 90 per cent of our profits, continues to go from strength to strength,” said Andrew McIver, Sportingbet chief executive. “Europe continues to be impacted by the recession and the effects of regulation. As we have demonstrated in Australia, the long term benefits of regulation are clear but take time to manifest themselves.''
As the European region faces underlying recession and regulatory uncertainty, the group does not expect its position to change in the near term, as any increase in profitability will be reinvested in newly regulated markets. This remains a core part of the group and provides support for emerging markets and for expansion into any new territories such as the US.
In the meantime, Sportingbet plans to continue to adjust the European cost base to mitigate both recessionary forces and the impact of new taxes. Since the disposal of its Turkish language facing business in November 2011, the non-Australian fixed cost base has been reduced by 22 per cent (£15m per annum). The group will continue to review its European cost base to ensure that it at least breaks even, as well as continuing to explore new countries, products or partners for growth.
Results in May to date have been in line with Sportingbet’s expectations and the group remains “confident” of the outcome for the year.
