Net Bet Blog

Sportingbet.com shares were up 6% in early trades on the back of an upbeat outlook after the Q3 results that were out today.

Sportingbet.com is one of the companies we track closely as a bellwhether of the industry. It also has a professional and well run affiliate programme under the SBEurope that I can recommend - certainly in comparison with many others.

In terms of the headline figures, Q3 underlying operating profit increased 143.3% to £7.3 million with operating margins up at 17.9 % from 8.9 % in the previous year.
This is an impressive performance.

With EURO 2008 about to kick off revenues are likely to improve. The £150 free bet is likely to bring in new punters keen to experiment with football betting.

For EURO 2008 special SBT promotions see Euro 2008 Betting. The sheer number of betting possibilities gives SBT the edge over Ladbrokes and others especially given the competitive odds.



The elephant in the corner though remains the Turkish blood bath that Sportingbet.com have got themselves into. Their defence is that Turkey only represents 20% of revenues. I for one was surprised that it was this high and I am sure most investors would not have expected such a large percentage of revenues to come from one country with such a hazardous regulatory outlook.

Here are the highlights:

Financial Highlights

* Amounts wagered up 25.4% to £364.6m (2007: £290.8m)
* Group operating profit* up 143.3% to £7.3m (2007: £3.0m) in the quarter; £19.0m year to date (2007: £7.0m)
* Operating profit* at 17.9% of net gaming revenue (2007: 8.9%) versus stated target for the year of 13%
* Cash on the balance sheet, net of customer liabilities, of £34.9m (2007: £38.1m)
* Diluted earnings per share* of 1.2p (2007: 0.7p)

(* stated before charging exceptional items, fair value restatements and amortisation)

Business Highlights

* Continued strong growth in gaming revenue across both Europe and Australia
* Significantly improved operational profit margin - 17.9% vs. 8.9% Q3 07
* Broader geographical diversification - no single market representing over 20% of net gaming revenue
* Year to date operating profit £19.0m (2007: £7.0m)

I remain a fan of Sportingbet.com and believe it to be a well run and competitive company. The recent poor share price performance should be temporary and more importantly, SBT remain an attractive purchase for BWIN or one of the larger players. US settlement would also help to bring SBT to the attention of the large US players when the dust eventually settles.

With shares up 6% already I expect further gains.


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