Empire Reports Boosted Profits for '05

10 April 2006

Empire Online has posted a 57 percent improvement in net profit on its maiden preliminary results for the year 2005. Net profit reached US$41.2 million for the year on net gaming revenues that improved 61 percent to $105.2 million.

It was a tremendously momentous year for Empire Online, which had until recently been regarded as more of a marketing firm for online gambling operations than as an operator of them. The company was the first in a series of online gambling companies to list its shares in London in '05 when it raised $22 million through a float on the Alternative Investment Market in June, preceding even the listing of PartyGaming, its former partner turned rival. Empire Online purchased online casino and bingo operator Club Dice and online poker operator Noble Poker in August for a total of $70 million. NoblePoker was, and remains, the largest poker room on Playtech's iPoker aggregate network.

PartyGaming disconnected players on Empire Online's EmpirePoker.com from its PartyPoker network in October, thereby jeopardizing Empire's business to the point that it was forced to issue a profit warning. But the preliminary results for 2005 indicate that the company has recovered nicely on the back of its Club Dice casino and Noble Poker operations, and the company now has $250 million in cash after selling EmpirePoker to PartyGaming as part of the terms of an out-of-court legal settlement after it sued PartyGaming for breach of contract.

At the end of 2005, Empire Online had 165,310 active real money players on its Club Dice and Noble Poker sites, which represents a 59 percent improvement over the 104,177 players it had at the end of 2004, when EmpirePoker was its main operation.

"Two thousand-five was an extremely busy year for Empire, with our successful listing on the AIM market of the London Stock Exchange and our evolution from a marketing services provider to a successful online gaming platform," CEO Noam Lanir stated. "We are extremely pleased with the performance of the Company during the period, and are very encouraged with the growth in both our poker and casino offerings globally and in particular in geographical territories outside of the USA."

Growth continues, and the company reports that it registered an average of 450 new players per day in March 2006.

Lanir has indicated that his company is attempting to use its cash reserves to diversify its offerings even further by acquiring an online sports betting operator, preferably one that does not rely on the U.S. market.

"I believe that the cash reserves available to the company, along with the ability to use its equity give the company considerable flexibility in pursuing merger and acquisition activity over the remainder of the year," Lanir said. "Our focus is to extend the range of the products that we can offer our customers, including a sports book. We will assess areas of geographical acquisition in line with regulatory and legislation trends."

Empire has announced a final dividend of $6.8 per ordinary share.

Click here to view Empire Online's 2005 annual report.