Having lost 41 percent of its share value in the year to date, 32Red of Gibraltar quietly gained 8.5 percent Wednesday on the back of an upbeat first-half trading update.
Total gaming revenue came in at £6.6 million, up 26 percent against the previous-year period and 32 percent against the second half of the 2007 fiscal year.
Casino, where the company derives the lion's share of its revenues, totaled £6 million, an increase of 31 percent versus the first half of 2007 and 38 percent against the second. Active players were up 14 percent with a 15.3 percent increase in yield per player.
In an increasingly competitive environment, 32Red's poker business was stagnant during the first half. Revenue, which came in at £600,000, remained unchanged against the first and second halves of 2007. Active players and yield per player were down slightly.
Revenue contributions from bingo and its France-facing online casino, which both launched near the end of the second quarter, were not revealed. However, Richard Carter, an analyst with Numis Securities in London, wrote in a research note Wednesday that early signs were encouraging.
"We think this trading update clearly demonstrates the group's renewed focus is working and builds on the trading turnaround seen in Q4 2007, and as further evidence of a sustained recovery in trading comes through over the coming quarters we believe 32Red will be re-rated," Mr. Carter said.
The company currently trades on a price-to-earnings ratio of 12.5, though Numis projects this will fall to 8.5 during the 2009 calendar year.
32Red has net cash of £3.1 million and a market capitalization of £16 million.
Shares closed up 2 pence at 25.50 pence.
Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.