Party takes US$250m hit
| PartyGaming has seen a drop-off of 2% in its non-US facing business in the days since it cut off US customers from accessing its real-money sites. |
| The company has also said it will incur a one-off restructuring charge of US$250m (£133m) in the second half following on from events in the US. It said three-quarters of the charge would be non-cash.Â
The news came in the company’s third quarter Key Performance Indicators (KPIs) and trading statement released this morning. The company said it had already moved to reduce its cost base and it expected the group’s clean EBITDA margin for the “full year and thereafter†would be significantly lower than it was in the first half of 2006. Group revenues for the third quarter, before the closure of its US real money business, came in at US$337.2m, up 6% on the second quarter figure. Only US$92m of that total came from outside the US. However, PartyGaming was keen to stress the contribution made by its non-US operations in the period. Of a total of 267,948 real money poker sign-ups in the third quarter, 128,825 were from outside the US. Poker net daily revenue from non-US facing operations was up 151% to US$0.8m. This was from a total of US$2.7m per day, up from US$2.2m over the same period in 2005. Commenting on the results, Mitch Garber, chief executive, said: “While the US has historically represented the majority of the group’s revenues and profits, I am pleased to report that our non-US business continued to deliver strong growth in the quarter with revenues up 158% year on year to US$92m.†He added: “PartyGaming is a highly dynamic business, one that has proved time and again its ability to adapt to new challenges and new environments.†Party will be launching the first version of its multi-lingual site later this month, which will be followed by a multi-currency offering in 2007. |