Bwin.Party 2014 Half-Year Results Show Revenue Decline


Bwin.Party 2014 Half-Year Results Show Revenue Decline - 1st September 2014

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“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.”

Those were the words of bwin.party digital entertainment CEO, Norbert Teufelberger, after his firm had released their 2014 half-year results to the general public.

The key performance indicators (KPIs) for the six months ending 30 June 2014 were showing more red than green with a series of bad news stories permeating through the paper.

Overall revenues decrease 7.5%

The biggest story is the news that total revenue is down 7.5% from a 2013 figure of €342.5m to €317.1m. The causations cited are a "soft international poker market," and "the loss of €11.9m of revenue from their withdrawal from the Greek market."

It’s a sad story, particularly because it was World Cup year. The additional income from the World Cup came in at €127.4m, but sports betting handle actually declined 5% year-on-year to €1.35bn.

Despite that decline, sports betting remained the only tranche that grew revenue with a 7% increase to €127.4m from €119m this time last year. New player sign-ups were up 7% overall and up 40% in nationally regulated and/or taxed markets, yield per active player day was up 8%, and 35% of gross gaming revenue came through mobile.

Poker revenue falls 37%

The other tributaries performed like dogs with casino & games falling 8% from €112.2m to €103.3m, poker dropping 37% from €63.9m to €44.1m, and Bingo dropping 3% from €27.6m to €26.7m.

Once again, the withdrawal from the Greek market was cited as the answer to most of the problems in all of these areas.

To round off this dismal news, earnings were down 23% and they also made an operating loss of €100.4m (of which €95m came via non-cash impairment charge against its under performing poker assets).

New Jersey investment won't break even until 2016

It does have to be noted that there are start-up costs associated with the gaming and poker sites operating in New Jersey, which amounted to a €7.3m loss. Bwin.party are forecasting another €6m loss by the end of the year and CFO Martin Weigold believes that the New Jersey business won’t break even until sometime in 2016.

With shares down by a third this year, and its market value seeing £660m vanish into thin air, what’s the plan?

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,” Teufelberger stated.

According to Reuters’s Keith Weir, Teufelberger and his team plan to focus on developing the Bwin brand in Europe whilst doing likewise with PartyPoker and World Poker Tour (WPT) stateside.

There are also plans afoot to look at the potential of an initial public offering for their payment processing business, Kalixa, and a further €15m will be clawed back through cost cutting exercises (that’s in addition to the €30m it saved this year).