The online gaming operator announced its final audited results for the six months ended 2 July 2006. Profit before tax was up 146% to $4.6m, while total gross revenue from players was up 75% to $22.0m on total turnover of $468m, up 36%.
The main contributor to the strong performance was the improved trading margin on sports betting. In particular, an excellent first quarter yielded a sports margin of 8.33% and contributed to the achievement of a 6.72% margin for the first half, compared to 4.13% in the first half of 2005.
Active customers during the period were up 33% to 27,281, with new funded accounts up 28% to 8,337.
Betcorp said the integration of Oasis, an online sports book and casino acquired on July 2006, had been successful and trading was in line with expectations. The company also confirmed that it will de-list from the Australian Stock Exchange on October 31.
Colin Walker, Chief Executive of Betcorp, commented: “Betcorp’s substantial increase in profitability over the last six months is testament to the strength of the Group’s multi-product strategy and focus on attracting higher margin and lower risk recreational customers. Betcorp continues to be highly cash generative and plans to reduce the risk profile of the business by geographical expansion outside North America.”
In July 2006, a legal action by the US Department of Justice involving the founder and the CEO of London-listed BetonSports, triggered substantial declines in share prices in the sector.
The Board of Betcorp, with the assistance of advisors with extensive experience of the US legal environment, reviewed all aspects of the group’s operations relative to customers located in the USA and decided to take steps to minimize legal risk associated with the US market to the maximum extent practical.
As a result of the review process, Betcorp will no longer accept telephone bets from US residents.
The company said this initiative will likely have an adverse effect on sports betting turnover, but will be partially offset by personnel and telecommunication cost reductions and the migration of telephone activity to the internet.
“We anticipate that the overall effect on profitability will not be material,” the company added.
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