PartyGaming completed 2007, its tenth year of operations, with solid earnings but lower revenue growth than anticipated. The company's operational figures are contained in an annual report filed today -- along with an announcement of chief executive Mitch Garber's plans to resign and a revelation that the company continues to communicate with law enforcement officials in America.
Earnings from continuing operations grew 119 percent to $112 million, while revenue from continuing operations grew 41 percent to $457.8 million, which is less than hoped for.
"While growth in net revenue has been lower than expected, clean earnings before interest, tax, depreciation and amortization, our primary measure of financial performance, is in line with expectations and the group remains confident about the full year outlook," the company said in a prepared statement.
PartyGaming does not operate in markets that are presided over by governments that are unfriendly to foreign online gambling. Chairman Michael Jackson describes the approach as "conservative", and "responsible", but concedes that it can limit revenue potential. "Whilst our approach means that we continue to forego revenue opportunities in the short-term, we believe that such revenue streams are at risk and we remain confident that our chosen strategy will generate superior returns for shareholders over the long-term," he explained.
After two years at the helm of PartyGaming, Mitch Garber announced today that he does not want to renew his contract past May 1, 2009. PartyGaming's Board said it will employ an executive search firm to help find a replacement. Garber will remain CEO until a successor is found and will remain available for some time after to ensure a smooth transition, according to the announcement.
Regarding the company's ongoing negotiations with U.S. authorities, a striking part of today's financial report said: "The Group is continuing to respond voluntarily to any requests for information issued by [the United States Attorney's Office for the Southern District of New York]. The Group remains unable to assess the likelihood of any particular outcome of these discussions but is actively pursuing a resolution as soon as practicable. While it is possible that a conclusion may be reached in the foreseeable future, the exact timing of such a conclusion remains uncertain."