PartyGaming Plc (PRTY.L) Wednesday reported a sharp rise in its fiscal 2008 profit, as solid growth in all other verticals offset the soft performance in poker. However, the board did not recommend any final dividend.
The online gaming company's profit attributable to equity holders for the year was US$66.9 million or 16.2 US cents per share, higher than last year's US$41.6 million or 10.0 US cents per share.
Profit before tax for the Gibraltar-based company was also up at US$82.4 million, compared to the US$6.7 million reported a year earlier.
The company recorded a loss from discontinued operations of US$10.9 million in fiscal 2008, compared to a profit of US$27.7 million in fiscal 2007. Discontinued operations refers to those operations located physically outside the US, but relate to US customers that were no longer accepted following the enactment of the UIGEA. The Unlawful Internet Gambling Enforcement Act, or UIGEA, was enacted in the US on October 13, 2006.
Excluding this, profit after tax from continuing operations increased to US$77.8 million or 18.8 US cents per share from US$13.9 million or 3.3 US cents per share in the prior year.
Net revenue for the year ended December 31, 2008, declined to US$472.9 million from US$476.0 million a year ago. However, minus a non-recurring adjustment of US$18.2 million in fiscal 2007, ongoing net revenue grew 3% to US$472.9 million from US$457.8 million in the previous year.
The company's principal brands are PartyPoker.com, one of the world's largest online poker rooms, EmpirePoker.com, PartyCasino.com, PartyBingo.com, PartyGammon.com, PartyBets.com, PartyMarkets.com, and Gamebookers.com.
In addition, the company's Clean EPS from continuing operations surged 55% to 24.9 US cents from 16.1 US cents in 2007, whereas total Clean EPS more-than-doubled to 22.2 US cents from last year's 9.9 US cents. Clean EPS is EPS before reorganization income and costs, non-cash charges relating to share-based payments, non-recurring adjustment to revenue and release of tax provision.
The company reported that total Clean Earnings before earnings before interest, taxes, depreciation, and amortization, or EBITDA, including discontinued operations, were up 53% at US$133.3 million over last year's US$87.0 million. Growth was driven by revenue growth, a 3% and 27% reduction in distribution and administration costs, as well as lower charges relating to discontinued operations.
Reflecting the surge in Clean EBITDA growth as well as a 73% reduction in share-based payment charge, total profit from operating activities jumped by US$87.7 million to reach US$67.0 million, compared to last year's loss from operating activities of US$20.7 million.
Segment-wise, Poker revenue was down 12% year-over-year at US$274.0 million. The company attributed the decline to increased promotion costs around the launch of the next-generation PartyPoker, delay in the launch of a new loyalty program, and continued competitive pressures, especially from sites still accepting US players. The next-generation PartyPoker was launched at the end of September 2008.
On the other hand, Casino revenues, after adjusting to exclude bingo which is now disclosed as a separate business segment, increased 20% from last year at US$176.0 million, reflecting the increase in player activity on the back of an 83% higher new player sign-ups as well as an increase in player yields at 14% higher per day.
The company further noted that Bingo and sports betting revenues also grew strongly year-over-year, with Sports Betting generating 12% higher revenues at US$18.0 million and Bingo 96% higher at US$4.9 million for the fiscal year 2008.
The company also noted that it added DM plc and CIRSA to its portfolio of business-to-business customers since the year-end, as part of its previously announced intention in August to expand this business portfolio. Both the relationships are expected to become operational during the second half of 2009.
CIRSA is one of Spain's largest land-based gaming operators, which also has a substantial presence in Latin America. DM, one of UK's leading direct marketing groups, specializes in customer recruitment and database management. It also designs and promotes a range of games, competitions, and promotions that are distributed via mass-market channels.
On the payment of a final dividend, PartyGaming said its Board is not making one, despite having made good progress during 2008. However, the Board will continue to review the appropriate dividend policy for the Group, taking account of a possible settlement with the U.S. Attorney's Office for the Southern District of New York, or USAO, with respect to its pre-UIGEA activities, as well as the need to retain sufficient financial flexibility to take advantage of consolidation opportunities that are expected to arise over the coming months.
Following the enactment of the UIGEA, the Group noted that it stopped taking any deposits from customers in the US and barred such customers from gambling real money on all of its sites. The company noted that on June 4, 2007, it had initiated discussions with the USAO, and continues to negotiate the terms of a possible settlement with them.
PRTY.L is currently trading on the LSE at 221.00 pence, down 10.25 pence, or 4.43%, on a volume of 153,205 shares.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.