32Red moves to reassure market after share price dip
Operator releases positive trading update following post-results share slide
32Red has released a trading update revealing year-to-date revenues are up 8% year-on-year after its share price plunged by more than a third since the release of its annual results.
The decline had seen its share price fall to 56p on Monday morning, some 27p shy of the 83p it been trading at on the eve of its 2013 results on 5 March. At the time of writing its share price had risen 4p on the day to 62p.
The timing of the share price slide surprised the operator after its full-year results provided news of record revenues of £38.8m and EBITDA growth of 28% to £3.8m.
“The Company notes the recent sharp fall in the share price since reporting record results in terms of both sales and profits for the year ended 31 December 2013 on 6 March 2014,” the trading update read.
“The Company can confirm that trading in recent weeks has strengthened further with gross gaming revenues up 19% in the first 24 days in March against the corresponding period, taking the cumulative year-to-date increase to 8% as at 24 March 2014.”
And although the company will have to negotiate the 15% levy on UK-derived profits confirmed last week by the UK Treasury, the implementation of the tax this coming December had been widely expected for some time.
The update confirmed 32Red will continue to work with the Gibraltar Betting and Gaming Association ahead of the UK’s adoption of a Point of Consumption tax and regulatory regime to ensure “industry concerns are voiced and understood by the UK government”.
The operator also noted the UK government’s recent decision to raise the tax on FOBT machines will not impact on its business.