Partygaming FD on the company's 2007 results

These results demonstrate that your revenue mix is improving. So when will you be entirely happy with the balance of the group?

We haven’t got any set targets as to revenue mix, but it will continue to diversify over time as we add new products and as some of the new divisions like sports betting come on stream. We’ve seen poker, the primary segment, drop from 67% of revenue to 60% from Q1 to Q4.

But, of course, poker itself is still growing, and growing nicely ­ we had double-digit growth for poker. It’s just that some of these other segments are growing even more quickly, particularly casino and sports betting.
So, as I say, I think it will become more balanced going forward, simply because we see more opportunities there.

What’s happened to cash flow since the withdrawal from the US? And when can we expect you to reintroduce the dividend?

As you would expect, the cash flow was significantly impacted by the passing of the Unlawful Internet Gambling Enforcement Act last year.

We generated over $300m (£151m) in operating cash flow in 2006. This year, we generated around $96m. But we still think that’s a very credible result for a business that lost 75% of its revenues at the end of last year.

In respect of the dividend, we’re continually reviewing when it would be appropriate to pay a dividend, but we don’t think that time is now.

Distribution costs are 38% higher than this time last year. So will they be maintained at that level? And are you happy with the returns you’re achieving?

We’re very happy with the returns that we’re getting from that investment.

Distribution expenses are, in the large part, marketing expenses and are a key driver behind the growth that we’re seeing at the top line.

We had top-line revenue growth of 41% year-on-year, and of course, that in large part comes from new players that have been signed up during the year.

We signed up 684,000 new players. That’s a 30% increase on last year, and it’s translated very nicely at the bottom line.

Clean EBITDA was up from $50.9m to $111.7m, so it more than doubled. We are very happy with that result.

So what should we expect for the rest of 2008?

I think you should continue to expect growth across the board in all the different divisions.

I think that growth in casino and sports will continue to outpace the growth in poker, such that you will see them continue to become more significant parts of the business.

And I think that will be driven on the back of growth in new players rather than yields.

I think yields will be relatively stable, and the underlying growth is going to come from new signups, like we’ve seen in 2007.

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