Times Online
THE market value of Sportingbet, the AIM-listed internet gambling operator, soared past £1 billion yesterday after it reported a strong maiden contribution from its recently acquired Paradise Poker business.
The valuation landmark, reached after the shares rose by 16p to 309½p, represents a remarkable turnaround in Sportingbet’s fortunes. Two years ago the shares fell to 18p on the back of a poor run of sporting results and negative comments from Simon Cawkwell, the bear raider known as Evil Knievil.
Yesterday’s results prompted one group of investors to offload 18.79 million shares through a placing via Dresdner Kleinwort Wasserstein at 295p a share, netting £55.5 million. The 5.8 per cent stake was sold by the former owners of Sportsbook, the US betting firm acquired in 2001.
Nigel Payne, Sportingbet chief executive, disclosed that the group plans to begin paying dividends, starting with a full-year payout for the year ending July 31. He said that the company would also be applying for a full market listing in 2006.
Sportingbet yesterday reported a 118 per cent jump in pre-tax profits to £18.3 million in the half year to January 31, on turnover up by 29.5 per cent to £825.2 million. Fully diluted earnings per share, before goodwill and exceptional items, rose to 6.7p, from 4.2p.
Paradise Poker, acquired at the beginning of November for about £236 million from the three Canadian college friends who founded it, contributed a better than expected operating profit of £8 million and turnover of £12.5 million.
Internet poker, the fastest-growing sector of the gambling market, has been in the news recently after the announcement by PartyGaming, owner of PartyPoker, the market leader, that it is considering a stock market flotation that would propel it straight into the FTSE 100.
Mr Payne said that he was “hopeful” of Sportingbet joining PartyGaming in the FTSE “in the not too distant future”, although he cautioned that the company still faced regulatory uncertainty in several jurisdictions, notably in the US, where the legality of online gambling remains a grey area.
