The world\’s largest online poker operator announced revenue across its business in the third quarter increased by 32 per cent to $220 million, while total active player days were up 53 per cent to 12.2m.
The company spent 29 per cent of revenue acquiring new customers and adding 209,372 new real money players to the poker business and 19,991 to the casino business.
The yield per active player day in poker fell to $16.6 from $18.9 during the third quarter and down to $17.4 from US$19.1 over nine months. In the casino business the yield fell to $59.2 from $82.1. The average user visited the site once every three days. This reflected the fact that more casual players, who play less often and for lower stakes, are discovering the site.
Despite customer retention rates are declining as well, poker revenues were up 4 per cent over the previous quarter and the company\’s Chief Executive, Richard Segal, suggested “plenty of high street retailers would be happy” with 16 per cent annualized revenue growth.
Casino revenues were down almost 20 per cent, but on top of increased poker revenues, up 10 per cent since the company separated its players from those of \’skin\’ sites last month, and with a positive response to the new games offered, such as black jack and sidebets, the company remains confident and expects a 10 per cent growth in the fourth quarter.
“Moving PartyPoker to a standalone platform, with increased customer functionality, has contributed to an encouraging increase in poker revenue. Further, the initial response to cross-selling our casino games to PartyPoker customers has been much stronger than anticipated,” said Segal.
He also hinted that the group might look to acquisitions.
“The IPO gave us acquisition currency and we have looked at a number of companies and we will continue to do so,” he said.
In reaction to the encouraging results, Dresdner Kleinwort repeated its \’buy\’ stance and 150p target, while Numis initiated coverage with a \’buy\’ rating and 123p target. Investec confirmed its \’buy\’ recommendation and Citigroup remained bullish with a price target of 160p a year from now.
Shares in the company added 8p at 86p.
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