The merger with Party Gaming last year is still making the analysis of Bwin.Party's accounts a complex job. What investors can take away is that a combination of regulatory charges this year and a harsher tax regime in Germany will significantly affect the gaming group's profits, particularly as problems in southern Europe and a tougher poker market kept underlying sales growth pegged back with the number of active players flat.
Regulatory charges in Spain accounted for a €31.5m (£25m) exceptional charge during the first half, as Bwin settled backdated taxes before receiving a licence to operate in the recession-hit market. That was somewhat offset by €7.3m of savings as management strips out duplicated costs; Bwin should achieve €65m of annual savings by the end of 2013. However, the more serious impact was from tax changes in Germany – Bwin's biggest market – where a new 5 per cent tax on betting turnover will hit profits by between €5m and €10m this year.
Across the group's operational divisions, casino & games stood out amid a generally weak performance; net revenues here were up 12 per cent to €140m, generating a 19 per cent uplift in cash profits to €45m. The greatest competitive pressure was seen in the poker segment, which suffered a 8 per cent decline in revenues to €96.4m.
Broker Peel Hunt forecasts full-year adjusted pre-tax profits of €87.6m and EPS of 11¢, down from €138m and 16.8¢, respectively, in 2011.
BWIN.PARTY DIGITAL ENTERTAINMENT (BPTY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 96p | MARKET VALUE: | £775m | |
| TOUCH: | 96-97p | 12-MONTH HIGH: | 177p | LOW: 91p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | na | |
| NET ASSET VALUE: | 90¢* | NET CASH: | €214m | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 273 | -50.8 | -6.6 | 1.56 |
| 2012 | 410 | -15.3 | -1.7 | 1.72 |
| % change | +50 | - | - | +10 |
Ex-div:12 Sep Payment: 9 Oct *Includes intangible assets of €713m, or 88¢ a share £1=€1.26 | ||||
