Interim surge at Sportingbet

23/02/2006 Robert Tyerman

Online gaming group Sportingbet increased profits 126 per cent to £41.3 million pre-tax in the six months to January.

First-half revenues for AIM-quoted Sportingbet rose 25 per cent to £1.1 billion and cash flow gained 76 per cent to £77.1 million, suggesting some deceleration from the first three months. Earnings advanced 112 per cent to 14.4p a share and the company has declared an interim dividend of 1p a share.

In the second three months to October, when pre-tax profits growth rose a lesser 72 per cent to £27 million, Sportingbet's new 'real money' customers grew 62 per cent in number to 159,814 and the average cost of customer acquisition rose from £137 to £142. The company's Paradise Poker acquisition made a useful contribution, with the number of games played increasing 122 per cent to 338.7 million on a pro forma basis.

This contribution has prompted chairman Peter Dicks to claim the second quarter figures demonstrate 'the benefits of the increased size of our business across our shared price "one-stop shop" environment’. Chief executive Nigel Payne says Sportingbet now has more than 3.9 million registered customers, who placed 290 million sports and gaming bets and played 339 million games of poker in the first half year.

He points out that 'customer acquisition cost, bet size, bet frequency and attrition' have all remained 'consistent with last year', adding that 'growth is remaining strong across all products' in the current quarter. At 395p, up 0.25p today and well up on Growth Company Investor's recommendation at 291p in June, the shares value the company at £1.7 billion.