Sportingbet results disappoint despite success Down Under

sportingbet logo thumbSportingbet thanked Australia after they released a disappointing set of results to make them wonder why they removed Turkey from their menu. Operating profit for the entire group decreased from £18.2million to a loss of £5.2m for the first six months of the year. It was put down exceptional costs stemming from the acquisitions of Centrebet in Australia and Danish firms Scandic and Danbook. It was the decision to abandon the Turkish business, which was worth 29% of their net gaming revenue in Europe that hit their European business hard. Wagers were down 9% with net gaming revenue decreasing by 18%. The “recessionary environment” in both Spain and Greece was attributed as a reason for part of it and the upcoming regulation is not something they’re looking forward to.

Group chief executive Andrew McIver also explained: “This has been a transformational six months [for Sportingbet]. We have acquired additional regulated businesses in Australia and Denmark and disposed of our Turkish language website. These, together with the movement towards regulation in our second and third biggest markets, of Spain and Greece, mean that by the end of our year we expect to derive over 75% of our revenues from regulated markets on an annualized basis.”

Australia was the group’s bright spark with net gaming revenue up 28%, amounts wagered increased 12% with mobile wagers seeing a huge rise of 395%.

McIver added: “Following regulation in September 2008, our experience with Sportingbet Australia has demonstrated to us the long term growth potential for market leading brands in regulated markets. Our European business is being currently restructured to ensure it too is best placed to capitalise on the move towards regulation.”

2011 ended up being a challenging year for Sportingbet after the elongated takeover deal with Ladbrokes failed to bear fruit. That in itself had a detrimental effect on the company’s shares on a couple of occasions and revealed a pitfall to being a publicly-traded firm – you live and die by your shareholders. For the record the shares are at 39.50pat the time of writing – 6% down.

Removing themselves from Turkey does mean they’re able to profess to taking over 50% of revenues from regulated markets. Is this a sign they’re gearing themselves up for a tilt at any US market that materializes? Well it isn’t going to be sports betting – that’s for sure.