Unibet, the Swedish online betting and gaming operator, revealed a £900,000 post-tax loss in the fourth quarter and said that unlike its Scandinavian competitor, Betsson A.B., it would not be doing business in Turkey.
"We have looked at Turkey in depth," said Petter Nylander, the company's chief executive, at a presentation for analysts in Stockholm Wednesday. "We are in the gambling industry, but we are not gamblers, and we thought [Turkey] was too much of a gamble. But we respect the ones that go in there."
For the quarter, Unibet generated £34.9 million in gross winnings revenue, up 42.4 percent over the year-ago period. Sports betting contributed £12.6 million and non-sports betting, £22.3 million.
By segment, the company's casino remains its largest income stream and generated 33 percent of gross winnings revenue, with traditional sports betting at 24 percent, poker, 22 percent, live betting, 11 percent, and "other" -- which includes bingo -- 10 percent.
Taken together, and after free bets, traditional betting and live betting delivered an average margin of 7 percent, up from 6 percent a year ago. Treated distinctly, and before free bets, the traditional betting margin was 10.6 percent, and the live betting margin, 4.2 percent.
Active customers fell 5.5 percent to 292,168, year over year, as the company continued to execute its strategy of attracting "higher quality" clients.
This strategy, however, brings to light interesting questions on which brand of customer -- the low-stakes casual bettor or the high roller -- will be a more resilient source of turnover during the current downturn.
Already, Probability, which operates in the arguably distinct realm of mobile gambling, said it is benefiting from a low-stakes, high-volume approach. At interim results time in August, however, Ladbrokes said that operating profit from high rollers was down 33 percent versus the first six months of 2007.
Unibet's quarterly operating profit, meanwhile, was £12.8 million, but moving further down the profit-and-loss statement, foreign exchange losses associated with its 100 million euro bond issue, in December 2007, negatively impacted the post-tax result.
In the fourth quarter alone, the foreign exchange loss on that bond was 11.8 million euros, as the Great British pound, the company's reporting currency, weakened significantly against the euro.
The bond was used to finance the company's acquisition of Maria Holdings Ltd., but by analyst and company estimates, that business has underperformed.
Little visibility on Maria was given at Wednesday's presentation, but Mr. Nylander said that during the quarter, the operation -- which targets female players, particularly -- launched in some Eastern European countries, but its footprint was largest in Western and Southern Europe. Further Eastern European launches are scheduled for this spring.
"We want to spend the money -- we want to take the position in the female gambling market in Europe right now," Mr. Nylander said.
Both Mr. Nylander and the company's chief financial officer, Henrik Tjärnström, said Unibet has yet to experience any adverse impact from the recession.
For the full year, gross winnings revenue was up 52 percent to £123.4 million, with profits after tax in at £8.8 million. The company's annual report will be released on April 6.
Mr. Nylander did not indicate when Unibet would complete the repurchase of its bond, which matures in 2010, but said it has bought back approximately 32.2 million euros so far. The bond comprises the entirety of the company's outstanding debt.