The online gaming company reported a 102 per cent rise up to $97.4m in revenues, with a proft after tax of $41.2m, up 57 per cent.
The board recommended a final dividend of $20m ($6.8cents per share), which together with the interim dividend of $10m takes the dividends paid to shareholders since the IPO to $30m.
2005 has been a year of considerable transformation for Empire Online, which at the time of its IPO in June was principally a provider of marketing services to CasinoOnNet and PartyPoker, while now operates its own platforms (Club Dice and Noble Poker) and is in a very strong financial position following the settlement with PartyGaming. The $250m received is currently on deposit and is available to finance the acquisition of complementary businesses that can be acquired at a sensible price. The online gaming sector is widely expected to go through a period of consolidation and Empire is uniquely placed to emerge as one of the key players in the industry.
Empire Online completed the acquisition of the Club Dice Casino and Noble Poker in August 2005 for $46.6m and $3.6m respectively.
Club Dice has seen substantial growth in revenues and new sign ups since inception. At the end of 2005, the Club Dice platforms in aggregate had 26,790 active players. The net revenue per day averaged $79,946 during the fourth quarter of 2005, up 22.4% compared to the third quarter. Noble Poker, which is the largest poker operator on the Playtech iPoker network, has implemented strategies to help drive the rate of growth in new daily signups. This has been successfully executed with Noble Poker achieving an average of 138 new real money signups per day during the fourth quarter against 118 new real money player signups during the previous period. The number of active players was 29,585 at the end of the year against 21,809 at the end of the third quarter.
Total pro-forma revenues for the year from the casino business were $31.4m (2004: $21.8m) and generated a pro-forma gross profit of $16.6m (2004: $14.7m), corresponding to a gross profit margin of 51% (2004: 67%). Total pro-forma revenues for the poker division were $73.8m (2004: $43.3m) which generated a pro-forma gross profit of $35.3m (2004: $24.3m) on a gross profit margin of 48% (2004: 56%). The average cost of acquiring a new real money player across the group during 2005 was $230 (2004: $220).
“2005 was an extremely busy year for Empire with our successful listing on the AIM market of the London Stock Exchange and our evolution from a marketing services provider to a successful online gaming platform. We are extremely pleased with the performance of the Company during the period, and are very encouraged with the growth in both our poker and casino offerings globally and in particular in geographical territories outside of the USA,” commented Noam Lanir, Chief Executive of Empire Online.
“We believe that the cash reserves available to the Company, along with the ability to use its equity give the Company considerable flexibility in pursuing merger and acquisition activity over the remainder of the year. Our focus is to extend the range of the products that we can offer our customers, including a sportsbook. We will assess areas of geographical acquisition in-line with regulatory and legislation trends,” he added.
Lanir also commented on the company\’s trading outlook for 2006 announcing that an average of 450 new real money sign ups per day have been added in the first 4 weeks of March.
“In particular, the Company is pleased to note that more than 50% of new daily signups originate from outside of the USA. The cost of acquiring new customers continues to fall on a quarter by quarter basis. On the current rate of growth, the Company reiterates its confidence in achieving an EBITDA of $37 million for the current year.”
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