Bwin.party set for ‘major change’ after first-half losses

Bwin.party attributed the fall in revenue to pulling out of Greece as well as operating losses in the US state of New Jersey and continued softness in the European market, which Teufelberger said was the primary factor behind a one-off, non-cash impairment charge of 94.7 million euros.

The operator’s sports betting division remained the main source of income after it generated 89.1 million euros in revenue, which was helped by increased activity during this year’s FIFA World Cup national team football tournament. However, bwin.party suffered losses in its casino and games, poker, bingo and other divisions.

Elsewhere, the operator also reported losses in clean earnings before interest, tax, depreciation and amortisation, which fell from 60.7 million euros in the first half of 2013 to 46.4 million euros this year.

Operating losses increased significantly from a negative result of 4.9 million euros last year to a loss of 100.4 million euros in the first half of 2014, while loss after tax ballooned from 11.6 million euros in H1 of 2013 to 94 million euros this year.

Teufelberger said that the operator’s performance in the first half had highlighted the need for a change in its strategy. “Trading during the first half of 2014 was mixed with a solid performance from sports betting more than offset by year-on-year declines in casino and poker, particularly in countries that were no longer a core area of focus,” Teufelberger said.

“We are on track with our current cost saving measures, however it is clear that a more fundamental approach is needed to turnaround our commercial and operational performance.

“This requires a major change: we are simplifying our structure to accelerate the execution of our plans to drive revenue growth, increase our focus on customers in nationally regulated and/or taxed markets, and further reduce infrastructure costs.

“This new approach will also allow us to consider alternative financing and corporate structures in order to create additional value. We are confident that the steps we are taking will underpin our financial performance and remain confident about the full year outlook.” 

As a result of the first-half performance, bwin.party declared a half-year dividend of 1.89 pence per ordinary share.