Leading European gambling group Unibet has announced its first drop in profits for three years and watched as shares fell by over 15 per cent.
The Swedish company reported that its quarterly profits fell nearly 60 per cent from eleven million dollars to $3.37 million with gross winning revenues falling to $32.76 million compared with $36.54 for the same period last year.
The bookies also reported a four per cent drop in margins from an average of around seven percent for the period although turnover for the quarter rose to $232.72 million compared with $214.46 million for the same three-month period last year.
Although half-yearly gross win figures rose to $77.06 million from $71.10 million for the same period last year, profit before tax for the six-month period fell to $20.85 million from $27.01 million in 2006.
The company said that margins had suffered badly as a result of many favourites winning in major football, ice hockey and tennis tournaments during the period. In addition, the increased competition in online poker throughout Europe with the continued activity of monopoly Svenska Spel in Sweden had led to higher costs for Unibet’s poker product across Scandinavia as a whole.
“Our expectation is that this situation will stabilise during the second half of 2007,” said Petter Nylander, Chief Executive Officer for Unibet.
“Management has, during the quarter, initiated a number of new marketing initiatives, strengthened the regional market leadership and started several process and productivity improvements.”
Unibet also announced that it would cease sponsorship of the cycling team that bares its name at the end of the year. This decision follows a drawn-out dispute with Tour De France race organizers after they refused to invite the Unibet.com team because France bans foreign gambling advertising.
Leading European gambling group Unibet has announced its first drop in profits for three years and watched as shares fell by over 15 per cent.