|In advance of the Company entering the pre-interim close period, the Directors of the Company wish to provide the following trading update for the first six months of 2005. |
The Directors are pleased to confirm that overall cash conversion during the first half has remained strong, and available cash resources are sufficient to pay the forecasted interim dividend of 21p per share.
First quarter daily average net revenues were ahead of expectations driven primarily by the strong underlying performance of the existing business and the launch of new slot machine games. However, during the second quarter, the Company has experienced a weakening in revenues. As a result estimated half-year revenues of Euro 21 Million are below target. The Directors believe that such weakening in revenues is due to insufficient marketing, as the Directors took time to conclude their marketing strategy and establish appropriate tracking mechanisms to control marketing spend.
During the first half of 2005, the Directors have focused attention upon reviewing and planning the marketing strategies appropriate to sustain and build the business. Following the conclusion of this review, in mid-June the Company initiated the first in a series of new marketing programs the benefits of which have already impacted on the performance of the business, with daily revenues increasing.
Several other large-scale marketing programs have been prepared and will be launched over the coming weeks. In addition, the Company has developed a detailed marketing strategy for the remainder of the year. The Directors will keep this strategy and the impact of each specific marketing campaign under constant review.
In addition to the efforts described above, the Company has made significant progress in other areas, including the initial penetration of the Spanish casino market, the acquisition and test deployment of peer-to-peer poker technology in advance of full launch in July, the successful consummation of an affiliate joint venture, and other strategic co-marketing efforts.
CEO Steve Barlow commented, “Whilst we are disappointed to have fallen short of some of our targets, we are encouraged by the success of our recent marketing efforts and are confident that the strategy we have defined will allow us to meet market expectations for the year.”