Sportingbet delivers record H1 profit after Paradise Poker deal

LONDON (AFX) - Sportingbet PLC, the world's biggest online gaming group, posted record first-half profit buoyed by a first contribution from recently acquired unit Paradise Poker.

The British company said it had got off to a strong start in the first three weeks of the third quarter in terms of both turnover and profitability and will seek shareholder approval for a maiden dividend later this year.

Profit before tax, exceptional items and goodwill amortisation surged 118 pct to 18.3 mln stg in the six months to Jan 31 on turnover up 29.5 pct to 825.2 mln. Analysts had forecast 16.1 mln stg profit according to a consensus estimate supplied by the company.

Stripping out the contribution from Paradise Poker, operating profit before goodwill amortisation and exceptional costs rose 29 pct to 18 mln stg.

"We are delighted with the performance of the business in the first six months of the financial year," chairman Peter Dicks said in a statement.

"The organic growth of our sports betting and gaming business has been very strong and our poker business, following the acquisition of Paradise Poker, has performed well ahead of our expectations," he added.

Sportingbet last November agreed to pay 196.3 mln stg for Paradise to gain a foothold in the rapidly expanding online poker industry and diversify its revenue streams in favour of lower-risk commission-based gambling.

At the time of the acquisition it estimated the online poker industry to be worth between 1.2 to 1.5 bln usd a year, based on the current industry total daily rake, compared with just 0.4 bln 12 months earlier.

Turnover in the latest quarter rose 30 pct to 466.8 mln stg, with core operating profit rising 95 pct to 21.5 mln. Sportingbet stock, which has gained nearly 250 pct over the past 12 months, closed Monday at 293.5 pence, valuing the business at around 966 mln stg.

Net profit rose 127.5 pct to 18.2 mln stg while diluted earnings per share climbed 88 pct to 4.9 pence.

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