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24 January 2006
Empire Online Limited
Pre-Close Trading Update
Strong and Accelerating growth in New Businesses -
Number of new real money player signups were 49,788 in Q4 2005. -
Net Gaming Revenue of $22.5 million in Q4 2005. -
Company re-iterates confidence in $37 million pretax profit forecast for 2006 from all gaming platforms excluding Empire Poker. -
Strong current trading at Noble Poker, with revenue increasing by 50% in the first three weeks of 2006 following the initial integration of casino games with the poker platform. -
Cost per acquisition of new real money players has been maintained at the lower end of the normal range at $225 (Q3 2005 : $236). Empire Online Limited (the "Company" or "Empire Online"), a leading online gaming network and provider of marketing services to the online gaming industry, today provides the following trading update for the fourth quarter of 2005. During the fourth quarter of 2005 the Company has increased the marketing of its Club Dice and Noble Poker platforms which has in turn delivered a rapidly accelerating rate of new player sign ups. Trading at Noble Poker has been especially strong so far in Q1 2006 following the initial integration of casino games within the poker platform. Further game play enhancements are anticipated in the near future. Q4 Trading Performance Q4 has seen rapid growth in the platforms recently acquired by the Company; the Club Dice suite of casinos and Noble Poker. In aggregate, Empire Online saw total real money new player signups across all platforms growing by 49,788. The company is particularly pleased in this performance as it comes in a quarter when Empire Poker’s rate of new player signups and active player base was adversely impacted by PartyGaming separating its own skin from the system shared by Empire Poker.com and by the departure of Coral Eurobet from the shared tables. Trading highlights for Q4 : -
Number of new real money players across all gaming platforms excluding Empire Poker has risen by 32,419 for Q4 2005, which represents an increase of 23% over Q3 2005. The number of new real money players across all gaming platforms increased by 49,788, which represents a decline of 6% on Q3 2005 .Non-US players accounted for over 44% of all new real money signups in Q4 2005. -
Total Company net gaming revenue for Q4 2005 was $22.5 million (Q4 2004 : 22.0 million; Q3 2005: $31.4 million). Net gaming revenues across all gaming platforms excluding Empire Poker in Q4 2005 was $12.4 million, an increase of 41% on Q3 2005. -
Total Company Casino revenue of $11.2 million (Q4 2004: $6.0 million; Q3 2005: $ 8.4 million). -
Total Company Poker revenue of $11.3 million (Q4 2004: $ 16.0 million; Q3 2005: $23.0 million). -
Estimated net operating profit before non-recurring exceptional items for Q4 2005 of approximately $8.5 million (Q4 2004: $12.8 million; Q3 2005: $16.1 million) despite spending $2.5 million on player bonuses at Empire Poker to help stabilise the system. -
Cost per acquisition of new real money players in Q4 2005 has been maintained at the lower end of the normal range at $225 (Q3 2005 : $236). Key Performance Indicators (KPI’s) | ____________ | Q4 ‘05 | Q3 ‘05 | Change | Q4 ’04 | Change | | ____________ | | | % | | % | | (1 Number of Real)
Money Players Acquired | | | | | | Poker | 30,108 | 37,570 | (20%) | 31,719 | (5%) | | Casino | 19,680 | 15,578 | 26% | 10,848 | 81% | | Total | 49,78 | 53,148 | (6%) | 42,567 | 17% | | | | | | | | | (2) Number of Active
Players (a) | | | | | | Poker | 123,006 | 126,644 | (3%) | 71,466 | 72% | | Casino | 42,304 | 44,253 | (4%) | 32,711 | 29% | | Total | 165,310 | 170,897 | (3%) | 104,177 | 59% | | | | | | | | | (3) Average Active
Players per Day | | | | | | | Poker | 15,382 | 19,030 | (19%) | 11,570 | 33% | | Casino | 2,912 | 2,749 | 6% | 1,421 | 105% | | Total | 18,294 | 21,779 | (16%) | 12,991 | 41% | | | | | | | | | (4) Poker Active
Player days | | | | | | | Poker | 1.42m | 1.75m | (19%) | 1.06m | 33% | | | | | | | | | (5) Yield per raked day | | | | | | | Poker | $15.69 | $21.57 | (27%) | $22.63 | (31%) | Empire Poker Update As the company reported on the 10th October 2005 in its Q3 Trading Update, PartyGaming separated its poker platform from that of its ‘skins’ including ‘Empire Poker.com’. Furthermore, on 11th November 2005, PartyGaming confirmed that it had reached commercial agreement with its remaining skins, other than ‘Empire Poker.com’. In consequence, PartyPoker .com players and Coral Eurobet players no longer play on shared tables with Empire Poker.com players and Party Poker’s other skins. Full Year Guidance The Company expects to return profits before non-recurring exceptional items in excess of $50 million for the full year 2005. The Company re-iterates its confidence in achieving profits of at least $37 million for 2006 from all gaming platforms excluding Empire Poker. At present, it is too early to determine where profits from Empire Poker will settle for 2006 and is dependent on the outcome of ongoing litigation. The company will take an exceptional charge in 2005 to cover non recurring items which are principally associated with costs incurred and an estimate of costs which will be incurred in relation to the on going litigation against PartyGaming plc. Non recurring costs relating to the aborted transactions with Sportingbet plc and PartyGaming plc, IPO expenses, amortisation of share options and impairment of intangible goodwill will also be included within this charge. Current Trading The company has seen continued strong trading across all its new platforms since the beginning of the new financial year 2006. In the first three weeks up to 20th January, the company continues to see real money new player signups growing at around 500 per day. Commenting on today’s results, Noam Lanir, CEO, said “I am delighted in the performance of our new platforms, which demonstrate the strength of our marketing skills and builds on strategic acquisitions we made in Q3 2005. It is too early to tell how full year results at Empire Poker will turn out, but the Company has built a solid, fast growing business, that will deliver strong and sustainable growth in the future” For further information: Empire Online Limited +357 (2) 5 847 700 Noam Lanir, Chief Executive Officer Andrew Burns, Chief Financial Officer Andrew Burnett Citigate Dewe Rogerson +44 (0) 20 7638 9571 Simon Rigby Sarah Gestetner Ged Brumby
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