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JAXX satisfied with balanced business performance in first half of 2011


JAXX SE / Key word(s): Half Year Results

11.08.2011 / 10:10


JAXX satisfied with balanced business performance in first half of 2011

- Gross revenue climbs 28% in first half-year to EUR81.4 million

- Earnings reduced by wins by favourites and marketing in second quarter

- Strong second half-year anticipated

Kiel, 11 August 2011 - JAXX SE (Deutsche Börse, Prime Standard, ISIN DE000A0JRU67) today published its report on the first half of 2011. Its gross revenue has increased by 28% in first half of the year to EUR81.4 million (6M 2010: EUR63.7 million). As a result of the weaker margin in the second quarter, revenue from continuing operations rose relatively slowly in the first six months by 12% to EUR26.9 million (6M 2010: EUR24.1 million). In spite of the high payouts in the second quarter, which caused low margins for nearly all bookmakers on account of the large number of wins by favourites by the end of the European football season, JAXX completed the first half-year with an almost break-even result of EUR-189 thousand (6M 2010: EUR599 thousand).

In the second quarter, gross revenue climbed by nearly 24% to EUR39.1 million (Q2 2010: EUR31.7 million). Revenue increased by 3% as against the second quarter of the World Cup year of 2010 to EUR12.3 million (Q2 2010: EUR11.9 million).

myBet.com, the sports betting portal of the JAXX Group, further expanded its customer base on the Internet even though a number of marketing partners were still restrained regarding advertising gambling given the ongoing regulatory debate. In total, myBet.com had almost 800,000 registered users by the middle of the year. At 17,400, the average number of active users per month was down on the previous year, though the World Cup had generated substantial interest in sports betting. Thanks to successful cross-selling activities, myBet.com has increased the average monthly stake from EUR154 to EUR275 per active customer.

Given the planned increase in marketing expenses, the weak overall margin of 11.8% (Q2 2010: 20.0%) led to a decline in operating EBIT from continuing operations for the quarter to EUR-0.4 million (Q2 2010: EUR52 thousand). Looking at the first six months of the year, EBIT fell from EUR0.6 million in 2010 to EUR-0.2 million in 2011. However, consolidated net loss improved from EUR-0.7 million in the previous year to EUR-171 thousand as there was a significant improvement in the contribution to earnings from discontinued operations (business attributable to the available-for-sale investment in pferdewetten.de).

Mathias Dahms, CEO of JAXX SE said: 'Overall we can be very satisfied with the performance of our business, even though the high number of wins by favourites cost us a lot of money in the second quarter - but that is a bookmaker's risk and it is part of the business. The trend in growth is intact, however, customer values are developing very positively and the company has turned around. All we need now is a sensible regulatory basis for gambling in Germany. And this is very close now - if the state government in Schleswig-Holstein keeps its word and enacts its new law as planned at the end of August. The other states will then have to come to their senses as otherwise they will be unable to share in the positive development in Schleswig-Holstein. We will then see a domino effect.'

Outlook

The debate surrounding the future regulation of the German gambling market will enter a critical phase in the second half of 2011. According to current information, it can be assumed that the parliament in Schleswig-Holstein will adopt its own law at the end of August. A licence could therefore be expected to be issued at the start of 2012. JAXX SE is confident that it and its subsidiaries satisfy the licence requirements and will receive the necessary permits.

However, it remains to be seen how far the other states fall into line with Schleswig-Holstein. However, the other states - particularly those governed by the SPD - seem largely unwilling to come round to a more liberal course, meaning that an agreement is currently considered unlikely.

While Germany is still waiting for consistent regulations, JAXX is preparing to enter new European markets: myBet.com is expected to receive its Italian licence in the coming weeks, allowing it to launch in Italy before the end of the second half of the year. The licensing process in Spain is expected to start by the end of the year. In Belgium, myBet.com received a licence for its shops in July 2011 and is now planning to expand its online operations.

At an operational level, the JAXX Group's business will recover markedly after the summer break with the start of the new football season. Rising customer values, new betting shops, the widening of the product offering and a number of optimisations in operating processes are driving expectations for clear increases in revenue and income in the second half of the year.

In line with planning, the marketing budget will be reduced to a low level in the second half of the year. In addition, a number of optimisations in payments and the commission structure in addition to measures to enhance customer activity implemented in the second quarter will have a tangible effect from the third quarter.

The Management Board is therefore standing by its forecast of ending the 2011 financial year with significant revenue and earnings growth in a market environment still hampered by regulatory conditions. Gross revenue will be between EUR170 and EUR200 million with EBIT of between EUR1.0 and EUR2.0 million.

Key figures for 6M/Q2 2011 (continuing operations):

  6M 2011 6M 2010 Change Q2 2011 Q2 2010 Change
  EUR '000 EUR '000 % EUR '000 EUR '000 %
Gross revenue
(2010: Revenue)
81,410 63,661 +27.9 39,132 31,673 +23.5
Revenue 26,888 24,063 +11.7 12,339 11,946 +3.3
Sports Betting 10,546 10,282 +2.6 3,869 4,678 -17.3
Casino & Poker 9,065 5,806 +56.1 4,697 3,086 +52.2
Lotteries 6,322 6,904 -8.4 3,158 3,268 -3.4
Net gaming revenue (NGR) 26,632 23,798 +11.9 12,211 11,816 +3.3
EBITDA 1,863 2,521 -26.1 713 919 -22.4
EBIT -189 599   -382 52  
Consolidated earnings -171 -674 +74.6 -246 -593 +58.4
Earnings per share (EUR) -0.01 -0.05   -0.01 -0.04  
             
  30/06/11 31/12/10        
Cash holdings 11,277 5,500        
Shareholders' equity 19,825 13,933        
Equity ratio 45.8 % 38.2 %        

 

The report is available for download in the course of today on the websites www.deutsche-boerse.com and www.jaxx-se.com.

About JAXX:

JAXX SE, listed in the Prime Standard of Deutsche Börse, is a financial holding company with holdings in international companies in the gaming industry. JAXX currently holds interests in companies in Germany, the UK, Spain, Austria, Malta and Belgium. JAXX SE has its headquarters in Kiel. The holding companies cover the entire spectrum of the games and gambling industry. Depending on national regulatory structures, they broker or market sports and horse betting, lotteries, and casino and poker games. The shares of JAXX SE have been traded at Deutsche Börse since 1999 under ISIN DE000A0JRU67.


Contact:
JAXX SE
Investor Relations & Corporate Communications
Stefan Zenker
Tel. +49 (40) 85 37 88 47
Fax +49 (40) 85 37 88 30
Mail stefan.zenker@jaxx.com



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135309  11.08.2011