Online gambling giant bwin.party digital entertainment plc released its annual financial results for the year ending December 31 2014 to the London Stock Exchange on March 11, 2015 and they do not make good reading for investors.
Total net revenue was down 6% from €652.4 million to €611.9 million with the company posting a pre-tax loss of €97.9 million compared to a pre-tax operating profit of €51.9m in 2013, this despite 2014 being a FIFA World Cup year.
Norbert Teufelberger, the Chief Executive Officer, said of the results: “We have made solid progress this year in growing our share of revenues from nationally regulated and/or taxed markets, increasing our mobile footprint and reducing our cost base. However, the full year impact of ISP blocking in Greece coupled with the structural decline of regulated poker markets in Continental Europe affected our overall financial performance for the year.”
“Having announced our shift to a label-led approach in August, we are now accelerating our transformation. This programme is already improving our operational effectiveness and customer focus, both of which are key drivers of our long-term financial performance, with particular opportunities flowing from the commercialisation of our technology through our new Studios business unit”
Sport betting revenue increase by 1% although Casino & games, poker and bingo revenues declined, with poker revenues taking a massive 29% hit. Pulling out of Greece and “challenging conditions in several markets” were blamed for poker’s poor performance.
Matters do not seem to be improving in 2015 so far either, with the first eight weeks to February 25 seeing a further 30% decline in poker revenue and 12% decline across the entire company.
Amazingly, despite the doom and gloom, shares in bwin.party rose by 2.1% (at 11:00am March 11) to 80.05 although this was mainly due to Chairman Phillip Yea announcing that the company is still in talks with several entities about increasing the profitability to shareholders. Should these talks fall through it will be interesting to see how the stock market reacts because talk on several investment-related forums seems to suggest investors’ patience is wearing thin.