32Red Offloads BetDirect, Releases Interim Results

30 October 2007

Nearly a month's worth of speculating ended today as 32Red, on the delayed release of its interim results, announced it has agreed to offload its BetDirect business to Stan James for £5.75 million.

The company said £575,000 would be deposited on the exchange of contracts today, with £4.675 million on completion, which is unconditional and scheduled for Dec. 10, and the remainder, £500,000, after a six-month period.

"The sale of the BetDirect brand allows us to channel our marketing and management focus on the core 32Red brand," said 32Red Chief Executive Ed Ware.

On Sept. 28, Trading in the London-listed firm was suspended after it missed the deadline to publish its interim results.

For the six months ended June 30, total revenue rose 47.1 percent to £9.2 million against the previous-year period, with casino revenue up 1.7 percent to £4.6 million compared to H1 '06.

Poker revenues, however, were down 3.8 percent to £600,000 versus last year, with poker sign-ups down 0.9 percent on 2006. Registrations were also down, it said, due to increased competition from hitherto U.S.-facing operators that have repositioned their poker businesses in a progressively saturated European market. It added, though, that active poker players had grown by 7.3 percent to 10,662 against H1 '06.

Player yield across the firm's casino and poker business was down 18.7 percent (£426) and 12.3 percent (£57), respectively, compared to last year. "Yield per player is solid at £426 but down on 2006," it said, "and whilst some comfort can be drawn from lower acquisition costs for casino players, this remains an area of focus for the company."

The company said it is looking to expand its presence outside the United Kingdom and is investigating prospects in Europe and market-specific activities in the Far East.

"32Red will also add mobile telephone gaming services and an integrated bingo offering to its product range in the final quarter of 2007," Ware added. "Whilst the recent U.K. legislative changes effective from Sept. 1, 2007 allow greater access to the U.K. market, we have identified a number of new territories into which we intend to market [the brand]."

Trading in 32Red resumed today. Shares were down 3p to 39.00.

Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.