PartyGaming Plc, the Internet gambling company planning to acquire Bwin Interactive Entertainment AG, posted a full-year profit as casino and bingo game revenue increased.
Net income was 38.9 million euros ($54 million), or 9 cents per share, compared with a loss of 18.5 million euros, or a loss of 4.5 cents per share a year earlier, the Gibraltar-based company said in a statement today. Sales gained 15 percent to 357.3 million euros.
PartyGaming, which will be called Bwin.party digital entertainment Plc after the deal closes March 31, is combining with Bwin to ease entry to European markets as they legalize and regulate online gambling. PartyGaming has been trying to add more casino and bingo business as poker has been hurt by competition from companies that still accept U.S. bets.
“Casino has shown good growth and is developing successful games in-house,” wrote three Numis analysts led by Ivor Jones. They have a “buy” recommendation on PartyGaming. “Bingo is growing and ready to roll out across Europe.”
PartyGaming rose 9.1 percent to close at 191 pence at 4:30 p.m. in London. The shares have lost 7 percent this year, giving it a market value of 781.3 million pounds ($1.3 billion).
PartyGaming is confident it can meet targets of annual post-merger savings of 55 million euros per year by 2013, Chief Executive Officer Jim Ryan said on a conference call.
The company spent up to 25 million euros entering the newly opened markets of France and Italy, Finance Director Martin Weigold said on the call.
Denmark is expected to allow web gambling by the end of the year, with Spain, Greece, the Netherlands and Germany to follow, Ryan said.
Poker revenue fell 8 percent to 125.9 million euros. PartyGaming hopes to stem the decline by the end of the year, Ryan said. Weigold said the company boosted incentives to 25 percent last year to keep players on site.
Casino sales gained 11 percent to 151.4 million euros, while bingo more than doubled to 52.5 million euros, the company said on the statement.
PartyGaming’s year-earlier loss included payments toward a non-prosecution agreement with the U.S. Justice Department over the company’s gambling operations before 2006, when the country restricted web betting.