The online sports content and gaming company announced its results for the full year to 31 December 2005, showing a 39% rise in group turnover up to £119m, a 18% growth in gross profit up to £22.4m and a profit before tax of £0.4m, compared to a loss of £2.6m a year earlier.
During 2005, UKbetting’s content network, which generates significant revenues from advertising, content sales and affiliate revenues, performed well, despite removing competitor bookmaker advertising in November 2005. Oddschecker had an excellent year helped by the introduction of poker checker and casino checker.
Total gaming turnover grew by 47% to £105m last year, with gross wins up 45%. In particular, casino and poker performed well, contributing 65% of gaming gross win with revenues up 72% on 2004. While sports betting was once again disappointing, contributing only the same level of gross win as in 2004, despite significantly increased turnover.
As a result of the disappointing performance of sports betting, an internally developed automated risk management system was built in the second half of 2005. This allowed for the restructure of the trading room at the end of January 2006 and the implementation of automated trading tools. These factors, plus a reduction in the cost base, are already creating an improvement in the profitability of the fixed odds business.
2005 saw 90,000 new gaming registrations of which 60% came from the group’s network of sites. During the year the group had 92,000 active betting and gaming customers up from 67,000 last year.
“Despite a difficult second half in sports betting in 2005, ukbetting has met market expectations and we are pleased with the Company’s trading so far in 2006. This is, in part, due to the fact that we have, since the beginning of 2006, restructured the sports betting division with a view to improving its profitability through a combination of margin improvement and reduced costs. Equally, we are reassured by the continuing popularity of the ukbetting online sports content network, which includes brands such as, football365.com, teamtalk.com and sportinglife.com and reaches 8.5m users per month, driving over 60% of our gaming brand’s customers. This business model will increase in value as we continue the rebuild of our main content sites incorporating more advertising formats including video and as the world market in broadband growth continues to flourish,” commented Peter Dubens, Chairman of UKbetting.
“During 2006 we will launch content into territories outside the UK and will be launching Oddschecker.com in a multilingual version prior to the World Cup. Furthermore, by the end of the second half we will have a single wallet for all our gambling products which will lead to improved conversion between our sports betting, casino and poker customers,” he added.
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