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Management calls in consultancy as losses continue
Online gambling software developer Cryptologic has reported in a trading update that it expects Q2 2010 total revenue to show a slight decline over Q1, and that total costs will be greater than expected.
The company warns that as a result, the operating loss in Q2 will be higher than Q1 and the company's outlook for the year is much less encouraging than at the time of the Q1 results announcement.
Management has advised in the update that a major consulting firm experienced in the gaming and betting industry has been retained to undertake a review of current operations with a view to enhancing company strategy.
Despite the distraction of the World Cup football, casino revenues showed a modest gain quarter-on-quarter, but was lower than anticipated due to a substantial swing in player preferences for Blackjack and Roulette. Wagering and deposit levels held steady through most of June.
Additionally, Cryptologic's full suite of casino games due to be launched at Betsafe in Q2 has been delayed until July for unspecified reasons. Branded games revenue grew by approximately 20 percent compared to Q1 2010, despite some licensees experiencing negative impact from the World Cup. Other revenue declined significantly, the update reveals.
"The Board and the Company acknowledge that the return to profitability is still contingent upon revenue growth, additional cost savings and a tight control of cash," the update notes.
"In light of continuing losses and the difficulty in forecasting results, a major consulting firm experienced in the gaming and betting industry has been retained to undertake a review of current operations with a view to assisting the Board in enhancing its strategy in the interests of stakeholders."
Geoffrey Finlay, a non-executive director, has resigned from the Board, the update concludes.
It is anticipated that Cryptologic will announce its Q2 results on Thursday, August 12th.

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