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Bwin keeps losing

RESULTS: Bwin.Party is battling to stay in the game after another year of merger-related upheaval at the German bookie.

It's fair to say Bwin.Party Digital Entertainment (BPTY) will be glad to see the back of 2012. The merger process with Party Gaming has been difficult, and trading in its main German market was hit by a new 5 per cent turnover tax. Most of the merger work is now done, but it can still spring nasty surprises - a computer migration problem could cause sales this year to be up to 10 per cent lower than the market expects, says one analyst.

IC TIP: Sell at 140p

Notably, though, Bwin delivered on merger cost savings. These totalled €46.5m for the year, ahead of the €40m forecast, which is the main reason why management expects to maintain underlying profits this year inspite of computer problems. Operationally, Bwin remains in a state of flux as it shifts its focus to more fully regulated markets. Underlying sales in the core divisions were broadly flat as resources were transferred away from grey markets; sports betting revenues rose marginally to €263m, while casino games was up by 3 per cent to €271m. Poker was the disappointment, with sales falling by €36.5m to €177m after the company - unlike 888, for example - failed to benefit from the shutdown of US sites.

Broker bwin.party expects adjusted EPS for 2013 of 11.2¢, rising to 12.8¢ in 2014 (2012: 14.7¢).

BWIN.PARTY DIGITAL ENTERTAINMENT (BPTY)

ORD PRICE:140pMARKET VALUE:£1.13bn
TOUCH:140-140.2p12-MONTH HIGH:163pLOW: 91p
DIVIDEND YIELD:2.5%PE RATIO:na
NET ASSET VALUE:83¢*NET CASH:€96.7m

Year to 31 DecTurnover (€m)Pre-tax profit (€m)Earnings per share (¢)Dividend per share (p)
201034843.89.8nil
2011691-422.9-56.03.12
2012802-23.5-2.93.44
% change+16--+10

Ex-div: 22 May

Payment: 24 Jun

*Includes intangible assets of €680m, or 84¢ a share

£1=€1.15