August 29, 2014 / 8:44 AM / in 3 years

UPDATE 1-Bwin.Party outlines turnaround plan, more cost cuts

* Company has been criticised by U.S. investor

* Plans additional 15 mln euros of cost cuts in 2015

* Could "play active role" in industry consolidation (Adds CEO comment, shares, industry context)

By Keith Weir

LONDON, Aug 29 (Reuters) - Online gambling company Bwin.Party set out plans on Friday to cut costs further and improve the performance of a business that has suffered a series of setbacks since its creation three years ago.

Under pressure from a new U.S. activist shareholder, Bwin said it would be prepared to play a part in industry consolidation, comments that could revive speculation over a possible break-up of the company.

Jason Ader, whose Spring Owl vehicle bought a 5 percent stake in Bwin.Party this year, has criticised the way the company has been run since its formation. Shares in the company are down by about a third this year and its market value has fallen to about 660 million pounds ($1.1 billion).

Chief Executive Norbert Teufelberger said that performance had been disappointing. He conceded that some of the company's problems were home grown, but added that it has also been hit by a tougher regulatory environment in a number of markets.

Bwin.Party said it would cut costs by a further 15 million euros ($19.8 million) in 2015, on top of 30 million euros that it will save this year.

"We are simplifying our structure to accelerate the execution of our plans to drive revenue growth, increase our focus on customers in nationally regulated and/or taxed markets, and further reduce infrastructure costs," Teufelberger said.

As part of the changes, the company will focus on developing the Bwin brand in Europe, while concentrating on the partypoker and World Poker Tour names in the United States.

MORE DEALS?

Adding to its problems, Bwin.Party could face increased competition in the United States after Canada's Amaya Gaming Group bought the owner of rival PokerStars for $4.9 billion.

Bwin.Party said the deal showed that investors are interested in the sector.

"Bwin.Party should be prepared to play an active role in any future reshaping of the industry if further value can be delivered," the company said.

It added that it had appointed advisers to look at a potential initial public offering for its Kalixa payments business.

Core operating profit fell to 46.4 million euros in the first six months of the year, down from 60.7 million euros in 2013, reflecting diminishing returns from its poker business and a retreat from markets where regulation is not clear cut.

The results were in line with expectations and shares rose 2.8 percent to 83p by 0750 GMT as markets reacted positively to the results and management plans. ($1 = 0.7595 Euros) ($1 = 0.6023 British Pounds) (Editing by David Goodman)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below