Reverse takeover target bwin.party Entertainment is on course to cut costs by €15 million during 2015 according to a statement to the London Stock Exchange by CEO Norbert Teufelberger.
Bwin.party issued its Q2 trading update last week where it informed investors that gaming revenue in the three months to June 30 was in-line with the Board of Directors’ expectations, with sports turnover ahead of schedule, although sports gross win margins were “below normalised levels.”
The update also revealed bwin.party’s target of disposing between €30m to €50m of non-core assets is also on target with €36m realised to date, while a new label-led structure is delivering operational improvements. As a result the company is “firmly on-track to achieve at least €15m of planned cost savings in 2015.”
Teufelberger, who will net more than £14.3 million if the GVC Holdings bid of 110p per share is accepted, said in the financial statement:
“Sports volumes are ahead of last year despite the 2014 World Cup, although poor sporting results drove gross win margins lower, holding back revenue performance in the period. Casino betting volumes have also remained strong and in poker we are closing the gap on last year. Our bingo revenue was in-line with last year but our UK business now attracts the POC tax that was introduced in December 2014.
“We have made good progress on the disposal of our non-core assets with World Poker Tour, Winners and United Games all sold during the second quarter and we have already reached our target range of €30m to €50m of disposal proceeds. As well as generating cash, these disposals are also helping us to reduce the complexity within our business.
“Our shift to a label-led structure is delivering the operational efficiencies we anticipated and we are on course to generate cost savings of at least €15m this year.
“We remain confident about the prospects for the second half and the outlook for our business.”
The FTSE 250 listed company is due to announce its first-half results on August 28, 2015.