AsianLogic Says Capex to Rise 'Significantly' in 2009

19 February 2009
AsianLogic Ltd., the land-based and online gambling operator, said Thursday that income levels will remain consistent in 2009, but that capital expenditure is likely to rise "significantly higher than in previous years."

"Like many in the sector, the Company trades in a challenging environment where sustaining growth requires continuing innovation in services provision and product development," it said.

The news came Thursday in a pre-close trading update for the 2008 fiscal year, in which the company reiterated previous earnings guidance of around $7 million, before taxes.

Forecasts were drastically reduced in November after the company elected to shutter its low-margin but turnover-generative credit-betting business. That business accounted for approximately 90 percent of sales.

A look at the company's share price over the last 14 months indicates investors are bearish on the name -- perhaps because of its exposure to regulatory risk in core markets like Malaysia and Singapore. From its 112 pence flotation price in December 2007, shares Thursday were trading at 28 pence, down 75 percent.

AsianLogic was also hit by a distressed seller in November, which Chief Executive Thomas A. Hall identified then as a hedge fund and major shareholder.

Since December 2008, the company has executed two share buyback programs, having viewed its stock as undervalued by the market. Currently it holds around 24 million shares in treasury, while around 86 million ordinary shares remain in issue.

Full-yearly results are expected in the second half of April, it said.

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