Announce Business Overhaul to Support New Business Strategy

party2The board have warned that 2013 year revenue would fall by up to 17 percent as senior management look to shrink its operations and concentrate on fewer markets and optimize it’s revenue streams. The igaming operator will now look to focus its operations in regulated markets and potential US regional markets, as the country looks to open legislation on igaming.

The new strategy will aim to sacrifice short-term revenues generated from smaller markets as look to stabilize its worldwide business model. The overhaul will see either exit or scale down from several markets notably Eastern Europe. The model has been appropriated by  other igaming firms such as Betfair and Bet365.

Top business priorities for,management and operational teams will focus on improving customer yield and margins generated from sports betting and games. . operate verticals on sports betting, bingo, casino and poker, plus the operator are exploring new social media verticals to further revenue supplies for the listed operator. management  is yet to announce  their long-term yield target.

The announcement by the board of directors of the new strategy for the group will see, cut investment in 18 non-core markets including  territories such as Brazil Greece Estonia and Cyprus. Implementation of this strategy will see  full-year revenue to be between 14 percent and 17 percent below the 801.6 million euros reported last year.

Furthermore the earnings statef before interest, tax and depreciation (EBITDA) margin will likely be 2 percentage points lower than last year’s 20.6 percent, said first-half EBITDA fell 34 percent to 60.7 million euros. The announcement of interim report saw shares fall in the igaming operators to its lowest in eight months. Current company value fell to £925m, as struggle in 2013.

Further factors that have effected performance have been the  introduction last year of a turnover tax on sports betting in Germany, a key territory for their Bwin sports betting brand and its largest market.  Competition in the bingo sector in the UK, which has scaled up customer acquisition costs, and the intrusion of  Greek internet service providers unexpectedly started blocking gambling IP’s from regional traffic.

“This was always going to be a major year of transition for us…however, our performance and revenue is behind where we expected it to be at this point,” Chief Executive Norbert Teufelberger commented

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