NEWS > ANALYSIS
TALE OF TWO HALVES
he Q1 results season was dominated by one word: mobile. Those ?rms showing growth were shouting about it from the rooftops. Unibet noted mobile accounted for 16% of its gross gaming revenue, while Betfair said 50% of its activations were now on mobile. At 888, CEO Brian Mattingley noted mobile was “gaining very signi?cantly” across all products and had seen rapid uptake among new customers. But it was at Hills where mobile really dominated the post-results analysis. The ?rm threw out some truly eye-watering numbers with a 298% rise in mobile gaming and 145% rise in sportsbook revenues. “Mobile growth is now starting to come through strongly in gaming, and mobile net revenue now makes up 13% of total gaming net revenue in the period,” Hills CEO Ralph Topping said in an analyst call. “A lot of our attention has been on mobile [and the] development of mobile gaming, which I think has got an upside worth talking about in August,” he added. The other big trend was acquisitions, with both Playtech and Betfair suggesting they were keen to raid their respective war chests to fund new growth. 888 meanwhile said a new sportsbook deal to replace its current Blue Square white label was “imminent” and would precede a push into the Italian and Spanish markets. Betfair likewise was looking eagerly at the international market for future acquisitions with a chunky £168m sat in the bank to fund its ambitions. It’s set to be a busy next few months and CEOs at some smaller ?rms will be sending their best suits to the dry cleaners.
>> With talk of mobile and acquisitions dominating the Q1 results, are the growth stories masking an underlying problem? Alun Bowden analyses the numbers to ?nd out
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“OUR MARKETING CAMPAIGNS ARE NOW WORKING, AND WE SHOULD SEE A RETURN TO GROWTH”
Brian Mattingley, C EO, 888
Positive thinking
Overall, it was a very upbeat reporting period with the frequently outspoken William Hill leading the charge. William Hill Online posted 21% growth in net revenue and an operating pro?t of £43.3m for the quarter ending 31 March 2013. This was predominately down to its sportsbook performance with strong margins, and big mobile growth making casino look a little limp in comparison with just 4% growth in the period. William Hill also noted a
decline in both its poker and its bingo vertical during the period, although it didn’t break out any speci?c numbers. But it did point at a wider trend. It’s really hard to be good at everything. Playtech acts as an interesting bellwether for the sector and, taking them as a guide, mobile and sportsbook are where the sexy growth is to be found, while casino remains solid and poker and bingo are struggling. Playtech saw bingo revenues rise a modest 1% on the previous quarter, and 9% year-onyear, in a period where it launched with Betfair and on Sky Bet mobile. It’s notable that bingo is now the third biggest revenue generator at the ?rm thanks to the continued decline of poker. The Israeli supplier’s poker revenues sunk 18% year-on-year, although they actually rose 9% on the previous quarter due in part to the move to the new tiered network. Bingo is an interesting area at the listed operating ?rms. It’s not a natural ?t for a hardened sports betting ?rm, and even 888 has struggled to make it work in the past 12 months. The 10% drop in revenues in bingo marred an otherwise impressive set of results. However, 888’s CEO maintains they have turned a corner with that vertical following 3% quarter on quarter growth. “Our marketing campaigns are now working, and we should see a return to growth,” Mattingley said. Ladbrokes meanwhile continues to be a bit of a horror show with good news very hard to come by. Even the sportsbook growth of 13.2% was tempered by talk of a decline in amounts staked. Gaming revenue fell by 11.4% year-on-year and Ladbrokes could only point to a relaunch of its mobile product on the Playtech-owned Mobenga platform as a source of future growth in mobile. With no growth expected until 2014, a huge amount depends on how the new Ladbrokes partnership performs – and how quickly. Can Playtech repeat its William Hill turnaround? Or will the different structure of the partnership create more problems than it solves? It will be a fascinating 12 months for sure.
Shouting it out
At Betfair there was a slightly unexpected
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