LONDON (Reuters) - Online gambling company Bwin.Party said this year’s soccer World Cup would help it to return to growth after problems in Greece and a shift away from riskier markets cut earnings in 2013.
Bwin.Party is concentrating on fewer markets where regulations are more clear cut and is expanding in the United States as gambling rules are relaxed there.
Rival Betfair, another of a cluster of online gambling companies that have grown up over the past decade, is pursuing a similar strategy.
“Having streamlined the shape and size of our business we now have the foundations to return our business to sustainable growth,” Chief Executive Norbert Teufelberger said.
Gambling companies believe the World Cup in Brazil in June-July will boost their business this year, reflecting the growing importance of soccer in betting markets.
“With all of the major European teams competing and given our footprint across Europe, we are well positioned to drive betting volumes over the summer months,” Teufelberger said.
Earnings before interest, tax, depreciation and amortization fell to 108 million euros ($150.17 million) in 2013 from 165 million the previous year because of falling revenue, increased gaming taxes in Germany and start-up costs in New Jersey.
The profit figure was in line with expectations. The company said in November that a block on access to online gambling sites in Greece would hit annual revenue and profit, adding to the decline caused by the strategy of focusing on fewer markets.
Shares in the company rose 3.4 percent to 126.3 pence by 0850 GMT as the market welcomed the prospect of renewed growth from a smaller base.
Management faces increased pressure to deliver on its promises after investment vehicle SpringOwl, run by activist New York hedge fund Cumberland Associates, agreed last month to buy a 6.1 percent stake from two of the company’s founders.
“Bwin investors will be hoping that the company really has reached a turning point,” said Jane Anscombe of Edison Investment Research.
“With activist U.S. investor Spring Owl on board since February there have been suggestions that the group could be broken up if 2014 does not show real signs of change.”
($1 = 0.7192 Euros)
Writing by Keith Weir; Editing by Erica Billingham