PartyGaming Plc

Audited results for the year ended 31 December 2009

   *EBITDA/EPS before the provision for costs associated with the Group’s Non-Prosecution Agreement, reorganisation costs, and before non-cash charges relating to share-based payments (see reconciliation of Clean EBITDA to operating profit below).
^#Operations located physically outside of the US but which relate to US customers that were no longer accepted following the enactment of the UIGEA.
⁺In 2008 net revenue from casino games on the bingo platform were reported within casino.  These amounts are now reported within bingo.  As a result, bingo net revenue for 2008 has been increased by $1.0m and bingo Clean EBITDA by $0.4m, with a corresponding decrease in casino.

• Total revenue of $446.2m (2008: $472.9m) with a softer performance in poker mitigated by growth in all other verticals
  
  

• Continuing Clean EBITDA* of $135.0m (2008: $144.2m); slightly ahead of market expectations
  
  

• Continuing Clean EPS* of 21.5 cents (2008: 24.9 cents); total Clean EPS of 21.3 cents (2008: 22.2 cents)
  
  

• Non-Prosecution Agreement reached with the US authorities with associated costs of $105.0m of which $15.0m was paid in 2009, resulting in a loss after tax of $26.5m
  
  

• Acquisition of Cashcade and World Poker Tour completed
  
  

• Net cashflow from Continuing operations of $120.5m (2008: $125.2m) with net cash at the year end of $164.7m (2008: $201.4m)

 Commenting on today’s results announcement, Jim Ryan, Chief Executive Officer, said:

“We delivered a solid performance during 2009 which demonstrated the resilience of our business model that continues to generate strong cashflow, even in the most challenging of circumstances.  Leading brands and market position, supported by a strong balance sheet underpin our business strategy.  With some acquisitions and major B2B deals already under our belt, we plan to do more in 2010 and I believe we are on course to meet our objective of becoming the world’s most valuable online gaming company.”

Regarding current trading he added:

“The Group has continued to perform in-line with the Board’s expectations.  In the two month period ended 28 February 2010, average gross daily revenue was $2,074,000 (Q409: $2,090,800) reflecting a 1% reduction from the fourth quarter of 2009 that included an exceptionally strong performance in casino.  All other verticals increased average gross daily revenue from the previous quarter.  In poker, new player sign-ups increased to an average of 1,700 per day (Q409: 1,400), and there were on average 55,900 active players per day (Q409: 51,700) generating average gross daily poker revenue of $709,000 (Q409: $690,000). In casino, average gross daily revenue was $775,600 (Q409: $854,800).  In bingo, average gross daily revenue was $493,800 (Q409: $452,600) and in sports betting, average gross daily revenue was $95,600 (Q409: $93,400).

“Whilst the macroeconomic environment remains uncertain, we remain focused on executing our stated strategy and are confident about the Group’s prospects.”

Contacts:
PartyGaming Plc    +44 (0) 207 337 0100
Peter Reynolds, Group Director of Corporate Affairs
John Shepherd, Director of Corporate Communications     

Interview with Jim Ryan and Martin Weigold
An interview with Jim Ryan, Chief Executive Officer, and Martin Weigold, Group Finance Director, in video/audio and text will be available from 7.00am GMT on 4 March 2010 on: http://www.partygaming.com and on http://www.cantos.com.
 
Analyst meeting, webcast and dial-in details: Thursday 4 March 2010
There will be an analyst meeting for invited UK-based analysts at Numis Securities, The London Stock Exchange Building, 10 Paternoster Square, London, EC4M 7LT starting at 9.30am GMT.  There will be a simultaneous webcast and dial-in broadcast of the meeting.  To register for the live webcast, please pre-register for access by visiting the Group website (www.partygaming.com).  Details for the dial-in facility are given below.  A copy of the webcast and slide presentation given at the meeting will be available on the Group’s website later today.
 
Dial-in details to listen to the analyst presentation: Thursday 4 March 2010
9.20 am    Please call +44 (0) 20 3037 9236
Title    PartyGaming 2009 Results
9.30 am    Meeting starts
 
A recording of the meeting will be available for a period of seven days from 4 March 2010.  To access the recording please dial the following replay telephone number:
 
Replay telephone number    +44 (0) 20 8196 1998
Replay passcode:     5268582#

About PartyGaming Plc
PartyGaming Plc is the world’s leading listed online gaming company. It is a constituent of the FTSE 250 share index with its shares listed on The London Stock Exchange under the ticker: PRTY.  In the year to 31 December 2009, PartyGaming’s Continuing operations generated revenues of $446.2m and Clean EBITDA of $135.0m.  PartyGaming’s principal brands are PartyPoker.com, one of the world’s largest online poker rooms, EmpirePoker.com, PartyCasino.com, PartyBingo.com, PartyGammon.com, PartyBets.com, Intertrader.com, FoxyBingo.com, ThinkBingo.com, BingoScotland.com, CheekyBingo.com, GetMinted.com, WorldPokerTour.com and Gamebookers.com.  None of the Group’s sites accept real money customers located in the US.  

PartyGaming Group companies are regulated and licensed by the Governments of Gibraltar and Italy and by the Alderney Gambling Control Commission.  The Group is also certified as a responsible gaming operator by GamCare, the leading UK authority on the provision of advice, practical help, support and counseling in addressing the social impact of gambling. PartyGaming’s shares are also a constituent member of the FTSE4Good Index Series, which enables investors to identify companies that meet globally recognised corporate responsibility standards.  For more information, please visit www.partygaming.com.

Download the full press release here 

NOTIFICATION OF MAJOR INTERESTS IN SHARES

1. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attached:

PartyGaming Plc

2. Reason for the notification (please tick the appropriate box or boxes):

An acquisition or disposal of voting rights: (  X  )

An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached: (    )

An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments: (    )

An event changing the breakdown of voting rights: (    )

Other (please specify): (     )

3. Full name of person(s) subject to the notification obligation :

Legal & General Group Plc (L&G)

4. Full name of shareholder(s) (if different from 3.):

N/A

5. Date of the transaction and date on which the threshold is crossed or reached:

18 February 2010

6. Date on which issuer notified:

19 February 2010

7. Threshold(s) that is/are crossed or reached:

4%

8. Notified details

A: Voting rights attached to shares

Class/type of shares if possible using the ISIN CODE

Ordinary shares of 0.015 pence each

G1000A0MV757

Situation previous to the triggering transaction

Number of shares

15,534,274              

Number of voting Rights

15,534,274

Resulting situation after the triggering transaction

Number of shares
Direct

16,523,069

Number of voting rights
Direct

16,523,069

Number of voting rights
Indirect

-

% of voting rights
Direct

4.05%

% of voting rights
Indirect

-

B: Qualifying Financial Instruments

Resulting situation after the triggering transaction

Type of financial instrument

-

Expiration date

-

Exercise/ Conversion period

-

Number of voting rights that may be acquired if the instrument is exercised/ converted.

-

% of voting rights

-

C: Financial Instruments with similar economic effect to Qualifying Financial Instruments

Resulting situation after the triggering transaction

Type of financial instrument

-

Exercise Price

-

Expiration date

-

Exercise/ Conversion period

-

Number of voting rights instrument refers to

-

% of voting rights

Nominal

-

Delta

-

Total (A+B+C)
Number of voting rights

16,523,069

% of voting rights

4.05%

9. Chain of controlled undertakings through which the voting rights and/or the financial instruments are effectively held, if applicable:

Proxy Voting:

10. Name of the proxy holder:

N/A

11. Number of voting rights proxy holder will cease to hold:

N/A

12. Date on which proxy holder will cease to hold voting rights:

N/A
 
13. Additional information:

Notification using the total voting rights figure of 407,945,560

14. Contact name:

Robert Hoskin – Company Secretary, PartyGaming Plc

15. Contact telephone number:

+350 200 78700

PartyGaming Plc

(“PartyGaming” or the “Company” and, together with its subsidiaries, the “Group”)

 Fourth Quarter Key Performance Indicators and Trading Update

 Highlights

• Group revenue¹ up 32% versus the prior year and up 17% versus the previous quarter to $132.2m (2008: $100.4m) making $446.2m for the full year (2008: $472.9m)

• Strong performance in casino and a return to growth in all product verticals were key factors in the quarter resulting in higher Clean EBITDA margins than expected

• Clean EBITDA for the year ended 31 December 2009 expected to be slightly ahead of the Board’s expectations

• PartyPoker now the largest poker liquidity pool excluding US-facing sites

• January trading in-line with the Board’s expectations

Commenting on the Group’s full year revenue and fourth quarter KPIs, Jim Ryan, Chief Executive Officer, said:

“We enjoyed a strong fourth quarter with a return to growth in all four product verticals but with a particularly strong performance in casino and sports betting.  Having recaptured the number one spot in the world in terms of poker liquidity² and with our integration of Cashcade and the World Poker Tour (‘WPT’) well on track, our performance in the first four weeks of 2010 has been in-line with the Board’s expectations and we remain confident about our prospects for the full year.

“With the introduction of ring game poker, casino and bingo anticipated in Italy in the first half of 2010, the opening of the French market later this year and Denmark in 2011, we believe the outlook remains positive.  Whilst the regulatory picture in some countries remains uncertain, the momentum towards creating commercially viable and regulated markets is strong.  With some of the world’s largest gaming sites in poker, casino and bingo, and opportunities to further consolidate the online gaming sector, we are confident about our future prospects.”

Consolidated Key Performance Indicators (excluding network services and WPT)

Group revenue was $132.2m in the fourth quarter of 2009, an increase of 32% over the prior year and 17% over the previous quarter.  Excluding Cashcade and WPT that were acquired on 23  July 2009 and 9 November 2009 respectively, revenue increased by 16% versus the previous quarter and by 12% versus the prior year.  The key drivers behind the improvement included a strong performance in casino, that benefited from an improving games mix and the recycling of a major jackpot win during December, as well as sports betting where we saw an increase in gross turnover as well as gross win margin due to operational improvements and favourable results.

New player sign-ups increased by 3% versus the previous quarter to over 213,000 (2008: 168,000), driven by marketing initiatives and seasonality.  The addition of Cashcade and higher player retention as a result of more effective promotions as well as improved loyalty and VIP programmes, meant that active player days increased by 7% versus Q3 09 and by 24% versus the prior year.  The impact was to increase total net revenue (including network services and WPT) by 17% versus the previous quarter to $132.2m (2008: $100.4m) or $1,437,300 per day (2008: $1,090,800). 

Bonus costs and other fair value adjustments to poker revenue were 23% during the fourth quarter, slightly better than the targets that we communicated at the time of the half year results.  In the other product verticals, bonus costs were reduced on the back of successful initiatives to remove unprofitable players.  Combined with the strong growth in casino, this meant that the average yield per active player day increased by 8% versus the previous quarter to $16.7 (2008: $15.8).  The net impact of all of these factors was that total average net revenue per day in the fourth quarter of 2009 was up 32% to $1,437,300 (2008: $1,090,800) which was also 17% over that achieved in the third quarter of 2009 and the highest daily average since the enactment of the UIGEA in October 2006.

Clean EBITDA for the year ended 31 December 2009 is likely to be slightly ahead of the Board’s expectations.

Full details of all of the Group’s historic quarterly KPI data by segment is available for download at the Group’s website at http://www.partygaming.com/investor/documentation.html. 

Trading update
Trading in January has been in-line with the Board’s expectations and the Board is confident about the full year outlook.

The Group’s results for the year ended 31 December 2009 will be announced on 4 March 2010.

Contacts:

Conference call

Wednesday 3 February 2010

For analysts and investors there will be an opportunity to put questions to Jim Ryan, Chief Executive Officer and Martin Weigold, Group Finance Director, by way of a conference call at 09.30 GMT.  The details of the call are as follows:

Appendix

Poker* – Key Performance Indicators

*includes Emerging Games segment but excludes network services and the World Poker Tour

Casino – Key Performance Indicators

Bingo – Key Performance Indicators

*Excludes network services

Sports Betting – Key Performance Indicators

Contacts:

PartyGaming Plc	+44 (0)20 7337 0100
Peter Reynolds, Group Director of Corporate Affairs
John Shepherd, Director of Corporate Communications

As at 31 December 2009 PartyGaming has a total of 412,346,583 ordinary shares of 0.015p each (“Shares”) issued and admitted to trading.  A total of 146,166 new Shares have been issued since 30 November 2009 under the Company’s block listing in respect of the PartyGaming Plc All-Employee Option Plan.  Each Share carries the right to one vote, with the exception of Shares held by the Company’s employee benefit trust, the PartyGaming Plc Shares Trust (the “Trust”), which has waived the voting rights in respect of the Shares it holds. As at 31 December 2009 the Trust holds 4,564,628 Shares and therefore the total number of Shares with voting rights is 407,781,955.

The total voting rights figure of 407,781,955 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, PartyGaming under the DTRs.

N.B. The Company’s articles of association provide that the provisions of Chapter 5 of the DTRs, as revised from time to time, shall apply to the Company as if the Company were not a “non-UK issuer” as defined in the DTRs.

Contacts: 
Robert Hoskin
Company Secretary 
PartyGaming Plc
 +350 200 78700

• Solid current trading and return to sequential revenue growth for all product verticals

• Revenue in-line with the Board’s expectations while Clean EBITDA for the year to 31 December 2009 is expected to be slightly ahead of the Board’s expectations

• Prospective licensing and regulation in Italy and France offers exciting medium to long term revenue potential

• New £35m bank facility

PartyGaming Plc, the world’s leading listed online gaming company, announces that trading since the end of September 2009 has been solid.  While revenue is expected to be in line with the Board’s expectations, Clean EBITDA for the year to 31 December 2009 is expected to be slightly ahead of the Board’s expectations.

Whilst the timing and details of new regulations to be introduced in Italy and France in 2010 have yet to be clarified, we believe these markets represent significant potential revenue opportunities for the Group in the medium to long term.  Leveraging our scale and brand strength, we plan to take full advantage of these opportunities through the launch of B2B services with strong local brands and also through our existing brands. Combining the strength of the PartyPoker brand with the trade and assets of the World Poker Tour that we acquired in November 2009, we believe we are also well-positioned should the US government elect to regulate online poker in the US. 

Commenting on today’s announcement, Jim Ryan, Chief Executive Officer, said:

“As indicated at the time of our third quarter key performance indicators, our business has continued to perform well across the board during the fourth quarter with a return to net revenue growth across all four of our key product verticals. 

“Returning poker to growth has been a key focus for us.  We are pleased to see that the initiatives introduced throughout the year are now feeding through into both operational and financial performance with increased player numbers and average net daily revenues versus the previous quarter, despite continued competition from illegal US-facing sites and the difficult macroeconomic climate.

Our casino business has also continued to perform well on the back of new games launched on PartyCasino as well as higher jackpots, with the most recent Mega Gold jackpot paying out close to $5.0m to the lucky winner earlier this month. 


“Bingo continues to show substantial growth on the back of the Cashcade acquisition in July 2009.  In sports betting, our gross win margin has benefited from a good run of sporting results and the introduction of improved risk management tools.
 
“Despite the challenges presented by the prevailing macroeconomic environment, we have not been distracted from the execution of our strategic plan.  With the prospect of a number of new and large regulated markets in front of us, an expanding portfolio of B2B customers and a return to growth in our core business, we remain confident about the Group’s prospects.”

New bank facility

The Group, via its UK subsidiary, has entered into a £35m three year term loan.  The loan will be used for general corporate purposes including mergers and acquisitions. The all-in cost of the loan is anticipated to be approximately 6% per annum based on current interest rates.

The Group’s fourth quarter KPIs will be announced on 3 February 2010.


Contacts:

PartyGaming Plc    +44 (0)20 7337 0100
Peter Reynolds, Director of Investor Relations   
John Shepherd, Director of Corporate Communications   

PartyGaming Plc
(“PartyGaming” or the “Company”)

A Double Winner at the EGR Awards

PartyGaming is proud to announce that its flagship PartyPoker product was voted ‘Poker Operator of the Year’ at last night’s eGaming Review Awards (EGR). Additionally, Cashcade, which PartyGaming acquired in the summer, took top honours in the bingo category with its Foxy Bingo site beating off stiff competition.

The independent judging panel for the Poker Operator of the Year award recognised the operator that made the most headway in the real-money poker sector during 2008/9.  The judges were looking for originality, growth and scale, usability, payment processing and marketing.  Special consideration was given to operators who innovated in this competitive sector.

The judges for the bingo award cited Cashcade as the “stand out market leader at a marketing brand level”.  They also recognised Cashcade’s achievements for increasing its number of bingo networks to eight, including the launch of the free Cheeky Bingo room, and for several high profile marketing campaigns that included sponsorship of the giant BBC charity event, Red Nose Day. 

Jake Pollard, editor of eGaming Review, said:

“PartyGaming and Cashcade are worthy winners of the industry’s premier EGR poker and bingo awards. PartyPoker proved resilient in 2008/9 and maintained its position as the largest non-US, standalone poker site.  Cashcade was a very smart acquisition, complementing PartyGaming’s market-leading PartyCasino and PartyPoker products.”

Commenting on the awards Jim Ryan, Chief Executive Officer of PartyGaming, said:

“We are delighted to accept these top online gaming industry accolades for PartyPoker and Foxy Bingo. The EGR Awards are great recognition of the operational excellence of our poker and bingo teams in providing great online gaming entertainment to delight our customers.”

These latest achievements follow the four awards PartyGaming won last month for its 2008 Annual Report. It was voted ‘Best Annual Report’ at both the Accountancy Age and CorpComms Magazine awards as well as being a double winner at the inaugural Institute of Chartered Secretaries and Administrators Hermes Transparency in Governance Awards for the ‘Best Practice Disclosure on Strategy’ and ‘Best Practice Disclosure on Stakeholder Engagement’ categories for FTSE 250 companies.

Contacts:

Peter Reynolds, Director of Corporate Affairs +44 (0) 20 7337 0100
John Shepherd, Director of Corporate Communications 

About PartyGaming Plc

PartyGaming Plc is the world’s leading listed online gaming company.  Founded in 1997, the Group is a constituent of the FTSE 250 share index with its shares listed on The London Stock Exchange under the ticker: PRTY.  In the year to 31 December 2008, PartyGaming’s Continuing operations generated revenues of $472.9m and Clean EBITDA of $144.2m.  PartyGaming’s principal brands are www.PartyPoker.com, one of the world’s largest online poker rooms,   www.PartyCasino.com, the world’s largest online casino, www.PartyBingo.com, www.PartyGammon.com, www.PartyBets.com, www.PartyMarkets.com, www.FoxyBingo.com, www.GetMinted.com, www.Gamebookers.com and www.WorldPokerTour.com. None of the Group’s sites accept real money customers located in the US.  The Group is a responsible gaming operator as recognised by GamCare a leading responsible gaming charity in the UK.

PartyGaming is regulated and licensed by the Government of Gibraltar and by the Alderney Gambling Control Commission and is certified by GamCare as a responsible gaming operator and is also a constituent member of the FTSE4Good Index of companies.  For more information, please visit www.partygaming.com.

PartyGaming Plc
(“PartyGaming” or the “Company”)

Total Voting Rights

In accordance with Chapter 5 (Vote Holder and Issuer Notification Rules) of the FSA’s Disclosure and Transparency Rules (the “DTRs”), PartyGaming makes the following declaration to the market:

As at 30 November 2009 PartyGaming has a total of 412,200,417 ordinary shares of 0.015p each (“Shares”) issued and admitted to trading.  A total of 21,717 new Shares have been issued since 30 October 2009 under the Company’s block listing in respect of the PartyGaming Plc All-Employee Option Plan.  Each Share carries the right to one vote, with the exception of Shares held by the Company’s employee benefit trust, the PartyGaming Plc Shares Trust (the “Trust”), which has waived the voting rights in respect of the Shares it holds. As at 30 November 2009 the Trust holds 4,648,919 Shares and therefore the total number of Shares with voting rights is 407,551,498.

The total voting rights figure of 407,551,498 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, PartyGaming under the DTRs.

N.B. The Company’s articles of association provide that the provisions of Chapter 5 of the DTRs, as revised from time to time, shall apply to the Company as if the Company were not a “non-UK issuer” as defined in the DTRs.

Contacts: 
Robert Hoskin +350 200 78700
Company Secretary 
PartyGaming Plc