Wednesday October 28,2015 : BWIN.PARTY FEELS BRUNT OF EU VAT OBLIGATIONS
Reports strong trading going in to fourth quarter.
bwin.party digital entertainment released a third quarter 2015 trading update Wednesday showing an 8 percent decline in total revenue impacted, it says, by the absence of a major football tournament, the sale of non-core businesses and EU VAT obligations.
Key performance highlights for the nine month period ending September 30, 2015 include:
– Clean EBITDA up 5 percent to Euro 79.8 million (9M/2014: Euro 76.1 million).
– Total revenue down 8 percent to Euro 429.9 million (9M/2014: Euro 465.8 million).
bwin.party reported a rise in sports betting turnover compared to the same period last year, despite no World Cup, and a recovery in sports margins from the first half but which were still lower than last year.
The company’s administration expenses cost saving strategy has been successful on its original Euro 15 million target and current trading is strong, bwin.party reports, with average daily revenues of Euro 1.484 million, up 9 percent on last year.
Chief executive officer Norbert Teufelberger, commenting on the results, said:
“Whilst our year-on-year revenue performance has been held back by the impact of EU VAT and the absence of a major football tournament, we have a made a strong start in the fourth quarter, particularly in sports betting and casino.
"Despite the impact of the introduction of VAT in a number of EU markets, as well as the POCT that was introduced on 1 December 2014, our Clean EBITDA for the nine months ended 30 September is 5% ahead of the same period last year. Excluding the impact of EU VAT and the POCT, Clean EBITDA would have been €96.1m, an increase of 26% on the same period last year.
"Current trading has been strong, despite the impact of EU VAT and further declines in poker. With solid progress on expanding our mobile footprint and the full year benefit of the cost savings already made, we remain confident about the outlook.”
In related news, bwin.party expects its merger deal with GVC to be complete early 2016.