The owner of the world\’s largest poker website said it enjoyed strong trading in both poker and casino during the two months ended November 30 and it now expects to beat analysts\’ expectations for revenue of $917 million and profit before tax of $527 million for the full year.
PartyGaming said to have performed strongly since the end of September, with an average daily gross poker revenue of $2.67 million, up 14% from the third quarter and 32% above the same period in 2004. Average new player sign-ups of 2,455 per day were in line with expectations and the company remains confident of achieving the target of 800,000 real money poker sign-ups for the full year.
The number of unique active players increased from 443,000 in September to 487,000 in November and the daily average number of players increased from 131,000 in the third quarter to 138,000 during the last two months. Active player days in the period were 8.4 million, a 38% increase over the same period in 2004.
The casino business experienced a marked uplift in performance following the launch of blackjack in October. Approximately 40% of PartyPoker.com active players are now playing both blackjack and poker. Whilst this has reduced the poker revenue generated by these players, the overall revenue generated by them during the period has increased substantially. Excluding the first week following launch, the gross revenue in casino for the period since the launch of blackjack has ranged between $0.8 million and $1.2 million per day, which is between five and seven times higher than the average for the third quarter.
“PartyGaming is delivering on the strategy set out at the time of our IPO and we are delighted with the results from cross-selling one of our casino products to our large customer base. We are looking forward to raising the stakes again with the launch of our fully integrated, Party-branded platform and the addition of the first of our new games in the first half of 2006,” said Chief Executive, Richard Segal.
“It\’s a fantastic trading update. It shows their ability to cross-sell into their existing customer base,” said Robin Chhabra, an industry analyst at brokerage Evolution Securities.
“This transforms the economics of the business…and should wipe away the concerns people had a few months ago,” he added.
“PartyGaming’s sheer size provides it with a huge opportunity to capitalize on the continued strong growth of the online gambling market,” said Dresdner Kleinwort Wasserstein. Investec Securities expects the “strong trends to continue into the next year.”
Of particular note for analysts at Morgan Stanley was the success of the new blackjack game.
“We expect that there will be strong upgrades to 2006 numbers…. We also suspect that the market will reward Party with a re-rating, as it is clearly reducing its dependence on poker,” said the US broker in a research note.
PartyGaming\’s stock ended the day 16.5% higher at 136.25p.
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