L&G and GVC issue profit warnings
Bad news for Online gaming group Leisure & Gaming (L&G) and online casino operator Gaming VC (GVC) as both companies saw below expectations results of share prices.
Leisure & Gaming has reported an 8% fall in first-half profits to £3.6 Million and warned that second-half results would be weaker than expected. Chief Executive Alistair Assheton called the results disappointing and that he was confident in the group’s prospects.
Assheton, said: “The first half is traditionally the slower half of the year and it is disappointing however, that our performance as we enter the main sportsbook trading season has been weaker than our expectations. While I remain confident in the prospects for the group, the board is taking a prudent view that we may not meet external expectations in this financial year.”
Financial highlights included an increase of 33% in turnover from $254.7 Million to $339.9 Million for six months to end of June 2006. But profit before tax was down $0.6 Million to $6.8 Million for the period.
"While I remain confident in the prospects for the group, the board is taking a prudent view that we may not meet external expectations in this financial year," added Assheton.
While Online casino operator Gaming VC saw its share price dive to an all-time low today after it warned that results for the year will be materially below original expectations due to poor trading during the third quarter.
Pre-tax profit for the six months ended 30 June was £6.7 Million against £11.2 Million in the first half of 2005 and £1.2 Million in the second half. Revenue was £21.2 Million against £21.3 Million a year ago and £19.3 Million during the second half.
GVC blamed seasonal weakness in the summer months, unforeseen direct mail disruptions and a failure for business to pick up in September for its problems. It said that third quarter daily average revenue was down to £102,000 compared to the £126,000 projected.
“The short fall is attributed to increased competition from competitive poker operations attracting Casino Club members’ discretionary spend, and the operational challenges. This will affect the group’s second half results which are anticipated to be materially below our original expectations.”
Due to the increased regulatory actions in Europe, direct mail problems had not been helped by concerns on the part of existing suppliers.
The company also announced it was withdrawing from marketing in the Iberian Peninsula after customer acquisition costs for that market remained unattractive relative to other markets. It added that the poker business had experienced growth, but not enough to offset the apparent slowdown in casino.
Today’s figures showed revenues at £21.2 Million with gross profit coming in at £15.7 compared to £16.5 Million in the same period last year.
