Probability numbers rise as mobile operator predicts bright future
International growth "realistic option" following Playyoo acquisition - "Confident of continued growth as we begin to deliver strong margins at scale which business model is predicated upon", says CEO Charles Cohen.
Mobile betting operator Probability has recorded its highest ever month of player deposits but will today begin its search for a new chairman following the retirement of Graham Parr, it announced this morning in a full year results statement.
Net gaming revenues for its financial year to March 31 this year rose 34% to £7.2m compared to £5.4m for the same period in 2011, while the operator also narrowed its overall losses for the year, down 47% to £550,000 compared to £1.1m in 2011. It also took the decision to invest £800,000 in marketing in the first three months of 2012 which it said would “see a return” in next year’s full year results.
It said trading in its core UK consumer and business-to-business operations had been “strong” since the end of the financial year with player deposits in July their highest ever in a single month.
“A year ago most of our marketing was through mobile networks. Now that figure is less than 10%,” said chief executive Charles Cohen (pictured). “The success of TV advertising and of new types of mobile advertising such as in iPhone Apps and mobile search engines and social networks, has exceeded our expectations as a way to acquire customers to a mobile gambling service which completely bypasses the desktop PC or laptop,” he added.
Chairman, Graham Parr, who has led the business and been on its board since just prior to its IPO in August 2006, announced he will step down at Probability’s next AGM to be held in September. The company said it was already “in the process of recruiting a replacement” and will make an announcement prior to the meeting next month.
Rocco Pellegrinelli, who has served as a non-executive director of Playyoo since founding the company in 2008, officially joined the Probability board as a non-executive director in July this year following its £1.8m acquisition by the mobile gambling business in the same month.
Playyoo is a Switzerland-based B2B provider that owns and operates technology which enables companies holding Italian remote gambling licenses to offer mobile sports betting and casino services to consumers.
The AAMS-certified company offers games including blackjack and slots for a variety of mobile devices, with versions developed for the operating systems of Apple, Android and Samsung smartphones. Its blackjack game has been approved by the Apple App Store in Italy.
Playyoo, which also provides a number of skill games and freeplay social games, including a Texas Hold’em game on Facebook as well as ‘La Scopa’, a card game app launched on the social network in 2010 in partnership with Cogetech brand Iziplay and designed as a viral marketing tool for real-money play.
The company’s real-money egaming clients in Italy, where it offers sports betting technology as well as casino games, include Cogetech, Snai and NeoMobile.
“International growth is also now a realistic option for us, and since the year end we have completed our first acquisition in order to further establish our leadership in new markets,” Cohen said.
“Having undertaken this transition we are now confident of continued growth and momentum as we begin to deliver the strong margins at scale which our business model is predicated upon.
“Alongside our marketing and operational expertise, continued investment in technology will reinforce our position as a leader in this emerging sector. The acquisition of Playyoo helps us to accelerate the exploitation of our technological leadership in Italy and, hopefully in future, to other European regulated markets,” the CEO added.
This year saw Probability gain approval from Apple to offer its games to UK customers through the App Store for the first time. The LadyLuck’s app is available free to customers and Apple does not receive a share of any gambling income generated from customers using the App. Several Playyoo games are also available in the Italian App store branded for their Italian B2B customers.
More than a third (70%) of Probability’s players currently using smartphones, up from 40% a year ago, it said. Within a year Probability’s main marketing channel has switched from mobile operator networks to TV advertising,” its statement added.
Numis analyst Ivor Jones continued to back the stock this morning with another Buy note suggesting trading continues to be strong and that the company was going from “strength-to-strength”.