Market Briefs (March 4-8)

Interim Results Down for Aqua

Aqua Online (AQU) suffered a 3.8 million rand loss due to falling earnings, according to the company's most recent six-month results.

The company, which is traded on the Johannesburg Securities Exchange, went into the six-month period with a 10 million rand profit. Those profits were hard hit when Aqua made a deal to distribute software made by International Merchant Services, an online casino. The switch from Aqua's own casino software required the company to make large investments to increase its technical and sales staff. Aqua is the only distributor of IMS software.

Aqua is warning that it will report a material loss for the financial year to June. EBITDA fell to 5.6 million rand from 11.1 million rand. The company's directors believe the online gaming market is still profitable.

"We remain confident that the significant positive effects which will materialize in the new financial year will exceed the short-term impact on earnings," said Tal Harpaz, joint CEO.

TrackPower and Simmonds Group to Buy Armstrong Bros.

TrackPower Inc. (TPWR. OB) and Simmonds Group are teaming to acquire Armstrong Holdings (Brampton) Ltd. (AHBL).

Better known as Armstrong Bros., the company has bred standard-bred horses for more than 40 years. The company has shared ownership and breeding rights for 36 stallions and owns about 180 broodmares and 1,100 acres of farmland.

TrackPower and the Simmonds Group will purchase all the shares of Armstrong Holdings. Armstrong will in turn enter a joint venture agreement with TrackPower, which will own 39 percent of Armstrong's common stock. TrackPower will also buy all of Armstrong's broodmares, all of the stallion shares and all of the foals of 2002. The horses will continue to live at the Armstrong facility and be cared for by its staff.

Magna Revisits October Offering

Magna Entertainment Corp. (MIEC) is going ahead with an offering of Class A Subordinate Voting Shares that was delayed in October due to market conditions.

Magna, which offers Internet betting on horse races via its XpressBet service, will publicly offer 20 million shares and use the proceeds to repay loans as well as for working capital and the potential acquisition or development of additional racetracks or other entertainment facilities.

Youbet.com Issued Warning from Nasdaq

The Nasdaq Stock Market last week told Youbet.com (UBET) that it is not in compliance with the $1 minimum share price standard.

The company has until May 15 to raise its stock price to at least $1 for ten days in a row or else face delistment.

This is not the first time Youbet.com has received such a warning. Last year Youbet.com was warned to raise its minimum bid price and failed to by the deadline of May 22. The company, which on Feb. 22 received a license from California to operate an advanced deposit wagering system, had asked for a hearing before the Nasdaq Listing Qualifications Panel. Before the hearing could happen, Youbet.com made an agreement with TV Games Network that brought its stock price above $1.

Youbet.com's stock has not sold for $1 or more since Oct. 4, 2001. Its yearlong range is between 30 cents and $1.73. The stock closed at 59 cents on Friday.

Sportech Execs Increase Holdings

Two executives of Sportech plc (SPO) significantly increased their holdings on the U.K.-based betting and gaming company last week.

After Sportech announced a deal with ITV to offer betting via its channels, Finance Director Gary Speakman and Managing Director Colin McGill each purchased 78,750 shares of the group's stock for 15.75 pence each. .

The purchase brought Speakman's total holding in Sportech to half a million shares and McGill's to 4.26 million. According to the Financial Times, Sportech stock traded for 6.5 pence in September but now sells for about three times that much. On Friday, the company's shares closed down 8.45 percent at 16.25 pence.

IQL Posts Pretax Losses

IQ Ludorum (IQL) released results detailing a pretax loss of $7.6 million for the year ending Dec. 31, 2001.

The London-based software supplier suffered pretax losses of 2.8 million sterling from June 8 until the end of the reporting period. IQL cited industry consolidation and lowered sales as the cause of the losses. Total sales for the year were $6 million and loss per share was 9.59 cents.

William Holt, chairman, called the results disappointing, but said he is still confident for 2002.

"A planned casino sales campaign in Latin America was delayed thus pushing the impact of efforts in that region into 2002," he said. "Delays in the development of new software product had a further negative impact on planned revenues."

Playboy I-Gaming Becomes Profitable

Playboy's online gaming division will turn its first profit this quarter, Playboy Enterprises Inc. (PLA) CEO Christie Hefner said last week.

Reuters reports that last week at the FT New Media and Broadcasting Conference, Hefner said the company's Internet division is set to make its first operating profit; last year the online division lost $21.7 million.

Playboy launched its three gambling sites--a race betting site, a casino site and a sports book site--throughout the last half of 2001. Hefner said sites have also been launched in German and Korea and that the company's goal is to launch two new international sites per year.

Report Released

365 Corporation plc (TSF) released its third quarter and nine months results for the period ending Dec. 31, 2001. The United Kingdom-based company offers Internet betting by way of operators including William Hill and Flutter from its sports-themed Web sites. During the third quarter the group posted an operating profit of £0.4 million.