Online gaming operator Betcorp Limited (BCL) today reported a 146% rise in net profit to $4.63 million for the six months ended 2 July 2006. This compares to a profit result of $1.88 million for the comparable period in 2005. Earnings per share were up by 113% to US 22.6c per share.
Betcorp noted the main contributor to the improved performance was enhanced trading margins on sports betting as well as continued growth in the company's three major income streams: sports, poker and casinos.
Betcorp said its casino business has continued to reap rewards with gross revenue from casino activity up by 103% on the first half of 2005.
Additionally the firm noted poker revenues were $3.5 million, up 446% on 2005. However, this was adversely affected by the need to return 'rake' to clients to retain their business as well as increasing customer acquisition costs which are beginning to cause some concern.
CEO Colin Walker said 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,' he added.
The group advised acquisitions of Sinsational Intertainment in 2005 and Oasis in 2006 have introduced higher yielding recreational clients, which has contributed to these favourable trends.
Betcorp stated that the group would no longer accept telephone bets from customers located in the USA, as a result of the board's review of the July 2006 legal action by the US Department of Justice involving the a London listed BetonSports Plc, which triggered substantial declines in share prices in the sector.
The firm said that this initiative is likely to have an adverse effect on sports betting turnover but the overall effect on profitability will not be material. Mr Walker said Betcorp had created a competent operational infrastructure on which to expand into new geographic markets which, given the regulatory uncertainty in North America, would be a priority for the next twelve months.
'The group continues to be highly cash generative, which will provide the catalyst for continued growth in shareholder value,' Mr Walker concluded.
At 1145 AEST shares in Betcorp were up 10c to $2.40.
source : www.egoli.com.au
