Sportingbet said today it expected to hit full-year profit targets despite a 41% drop in revenue from its European business in the last quarter.
The online betting and gaming operator said trends during the prior nine months of the operator’s financial year ended 31 July, which saw pre-tax profit in the third quarter tumble to £0.3m from £12.1m, had continued into the final quarter.
The operator, that also owns leading Spanish language brand Miapuesta and Paradise Poker, this morning blamed challenging economic conditions and the “disruptive impact” and higher taxes of newly regulated markets for the drop-off in the European business in the last quarter.
The deteriorating European performance was partially offset by a strong performance from Sportingbet’s Australian division, boosted by the integration of the Centrebet business it acquired last year. Net gaming revenue (NGR) from Sportingbet Australia was up 93% year-on-year in the three months ended 31 July, and Sportingbet said the business now represented “a substantial majority” of the group’s earnings. The online betting and gaming company said this morning that the level of synergies realised from the completion of the integration of Centrebet in June, one month ahead of schedule, was “significantly ahead of our original expectations.”
The company’s woes in Europe were however compounded by the company being cut off from revenues from its largest European market for the first 35 days of the quarter. This followed a local court in Spain - where Sportingbet generated 9.4% of its revenue in the last half year to 31 January – rejecting the company’s appeal against an earlier closure order, granted following a successful action brought by Spanish land-based operator Codere, which cited unfair and “illegal competition” from and non-payment of taxes by Sportingbet.
The final parts of the injunction imposed on Sportingbet’s Spanish business were lifted on 29 June.
The company also had to issue £15m in convertible bonds to cover the payment of a €17.2m backdated tax bill in Spain to ensure it was among the first wave of licensees to start operating in the regulated market on 5 June.
The London-listed egaming group will issue its full-year results for the year ended 31 July on 3 October.