Sportingbet reports growth in Australian operations

William Hill, which makes most of its money in Britain, is expanding overseas and is interested in Sportingbet's operations in Australia and Spain.

Sportingbet declined to comment further on the bid situation, citing takeover panel rules. The potential bidders have until October 16 to make a firm offer. Shares fell 3.3 percent to 51.25 pence, indicating doubts about whether a significantly higher bid would emerge.

Underlying earnings - expressed as EBITDA - rose 11 percent to us$ 91.2 million on revenues of us$ 303.6 million. However, the company posted an operating loss of us$ 62.8 million once a slew of one-off charges were included.

CEO Andrew McIver said the company had emerged from a year of transition in a stronger position, with its focus on countries where the regulatory framework for the growing online gaming sector was clear. It cemented its position in Australia in 2011 by taking over Centrebet, the number four operator in the market. A company backed by GVC bought its Turkish language website.

"Our successful acquisition of Centrebet, which has out-performed our expectations, disposal of Turkey and introduction of regulation in our other key countries has resulted in over 80 percent of the group's revenue now being derived from regulated and/or taxed countries," McIver said.

Sportingbet said Australia now accounted for approaching 70 percent of group revenues and almost all of the company's profits.

Sums wagered on Australian sports betting rose 82 percent to us$ 2.39 billion, while annual savings after the acquisition increased to us$ 24.1 million from an original estimate of us$ 8.3 million.

Analyst Ivor Jones of Numis, who rates the stock a "buy", said shareholders should be encouraged by the Sportingbet statement. "The Australian business, over ten years in the making, is profitably growing share in a growing market," he said.

"In Spain, Greece and other European markets recession, regulation and taxation have conspired to sharply reduce profits, but strong market positions remain along with the potential to follow Australia's path to post-regulation success."