Market Briefs - May 16-20, 2005

Gross Win Falls At Ladbrokes

Hilton Group Plc (HG.L) issued a trading statement last week to inform the market that its profits for the first four months of 2005 have declined by 4 percent, due largely to lucky breaks for Ladbrokes' punters on the Cheltenham and Grand National races. The group's gross win fell by 1 percent, while its operating costs rose by 8 percent. Hilton CEO David Michels says the results will even out over the year, and he expects improving margins to lead to good growth in the second half of the year. Meanwhile, the hotel business continues its recovery from the drop in business experienced after the terrorist attacks on Sept. 11, 2001. The company's revenue per available room rose 10 percent in the first four months of 2005.

Tradal Brings in Steinberg ahead of Float

Lord Leonard Steinberg, the founder and chairman of Stanley Leisure Organisation Plc (SLY.L), has been named non-executive chairman of Tradal, the operator of online poker site EmpirePoker.com. In April Tradal appointed stockbroker Numis to advise on a public flotation, which the company could execute for £550 million as early as next month. Last week Stanley Leisure sold its Stanleybet sports betting shops and Internet bookmaking sites to rival bookmaker William Hill for £504 million.

Camelot Declares Self Largest Interactive Lottery

Camelot, operator of the U.K. National Lottery, is reporting a slight growth in sales for its financial year ended March 31, 2005. The most impressive stat in the company's report is that total interactive sales through Internet, mobile devices and interactive television improved by sevenfold to £87.5 million when compared to the previous year. Camelot launched Internet games in February 2003, while interactive television games become available in April 2004 and mobile games in October 2004. The company's executives believe that £87.5 million in sales on the year qualifies the National Lottery as the largest interactive lottery in the world.

PartyGaming Recruits More Help for Its Float

Reuters reports that PartyGaming is appointing four continental banks to help its main advisor, Dresdner Kleinwort Wasserstein, with the company's float on the London Stock Exchange later this year. The company is reported to have invited Spanish bank BBVA, Italian bank Mediobanca, and German banks Commerzbank and HVB to co-lead an offer, but many analysts say that Mediobanca is the only one with a serious banking presence. The appointment of the banks would indicate that the offer will be pushed hard in Continental Europe and Britain. Gaming restrictions forbid the offering of shares in the United States.

Paddy's Trading Update

At its annual general meeting last week, Paddy Power Plc (PAP.L) delivered an update on trading for the first 19 weeks of the year. The company's turnover has increased by 30 percent compared to the same period last year, and turnover has increased by 19 percent in the retail division, 30 percent in the telephone division and 67 percent in the online division.

Reports Released

Online gambling portal owner Gaming Corporation Plc (GMC.L), has reported turnover of £9.9 million for the six-month period ended March 31, 2005 (an 80 percent increase over that of the same period last year). The group's gross profit increased 174 percent to £718,162. During the period, the company acquired Got2bet.com and Gambling.com and launched new portals findpoker.com and Skillgaming.co.uk. Meanwhile, its Casino.co.uk portal received over 3 million unique visitors in March 2005 (compared to 150,000 in March 2004). The company also raised £10 million through an institutional placing in March and launched a mobile casino on the Orange cellular network.

Interactive Systems Worldwide Inc. (ISWI) reports that US$2.33 million was wagered collectively on its SportXction play-by-play wagering system during the first three months of 2005. Revenue for the period reached $46,000, compared to just $4,000 during the same period last year. The increase is due to new wagering partners and an increase in the number of events covered. The company has consistently reported month-on-month growth in wagering volumes and new players since the third quarter of 2004.