Companies: BSS    PRTY    SBT   

With PartyGaming’s £4 billion flotation thrusting the online gambling sector into the spotlight, analysts at broker Evolution Securities have deemed the time right to run the rule over several of its quoted London rivals.

Currently in possession of a particularly strong hand – according to analyst Robin Chhabra – is relative sector veteran Sportingbet, which has seen its share price almost treble in the wake of its purchase of Paradise Poker last October.

Looking at the impact of this deal, it is not difficult to see why the company has performed so well of late. In the three months to April alone, for instance, Paradise contributed earnings before interest and tax of £9.1 million. In turn, this enabled Sportingbet to ease past analyst expectations for the quarter and, says Chhabra, ‘we think the out-performance of expectations will continue.’

Evolution’s forecast is now for a full year profit of £58.6 million (up from £19.7 million in 2004) and these predictions are said to leave ‘ample room for further upgrades.’ The broker’s recommendation is to buy the shares at their current level.

Following a disappointing performance (and profit warning) in late 2004, AIM-listed BetonSports also looks to be regaining its composure.

Chhabra notes that the weakness in online advertising that blighted the company’s efforts last year has been ‘addressed head on’ and forecasts that profits will rise by 33 per cent to £18.6 million this year. Trading off a modest prospective p/e of 12.1 and yielding 5.3 per cent, the shares are rated a buy.