Sportingbet’s pre-close trading update for the third quarter 2008 highlighted a rise in operating profits to £7m, compared with £3m for 2007. Operating profits for the first nine months to date equates to £18.7m, compared to £6.7m in 2007.

Redundancies at Sportingbet’s head office may encompass a third of the staff, following the conclusion of its downsizing operation and move to Dublin and Guernsey, while the company has also announced the resignation of current chief operating officer David Hobday, whose post is being made redundant, as part of the downsizing measures.

Sportingbet’s chief executive Andy McIver told eGaming Review that the figures and current forecasts reflected the “long hard slog” the company had faced since the end of 2006.

He said: “We are very pleased, and it is the result of a lot of hard work. If you lose the amount of business we lost it’s amazing to still be here. In terms of forecasts for the end of the year, the market thinks we will do £28m, and we are happy with that.”

McIver said that it is likely that Sportingbet will lose a third of the head office through redundancies, though this is subject to a future consultation process.

He said: “We brought David Hobday in as the business had got so big. The US was doing very well, and sadly six months later UIGEA happened. At that point we did a lot of downsizing, waited until that bedded in and then re-assessed the situation. It is by no means Dave’s fault.

He added: “It is sad for the individuals concerned, and it does seem slightly peverse that the company has been performing so well. But that is business.”

He said that the board would like to thank Hobday for his “hard work and dedication”.

McIver said that looking forward, the company’s focus on Southern Europe will continue, and that Turkey is still a major market, despite payment processing issues.

He said that there are no specific plans for a marketing campaign based around Euro 2008.

A note from house broker Daniel Stewart said that although the fourth quarter is traditionally the quietest period for casino and poker, it expected a “Q3 trading update highlighting quarterly EBITA of ‘not less than £7m’. As a minimum, this equates to nine-month EBITA of £18.7m, significantly underpinning our full year 2008 forecast of £21.4m (c.87% covered)”. 

The note added: “Regardless of annual forecasts, Sportingbet’s Q3 results further demonstrate the strength of its operations, with a full product suite and a particularly strong pan-European and Australasian sports betting product. 

“If we assume a normalised sports margin during the Euro 2008 football tournament, Sportingbet is now well placed to exceed our full year forecast (Q4 EBITDA forecast of £2.7m against £7m in Q2 and Q3, but relative to just £0.7m in Q4 2007).”

Posted: 2008-05-09