2008-04-23 09:13:19

INTERIM REPORT JAN-MAR 2008

(NGM:BETT)

Betting turnover increases 37%


January – March
• Betting turnover: SEK 3,626 million (2,655)
• Net turnover: SEK 10.9 million (22.3)
• Gross margin: 0.30% (0.84)
• Operating income: SEK 4.8 million (17.8)
• Operating margin: 44% (80)
• Net income: SEK 3.6 million (17.0)
• Profit per share: SEK 0.02

Managing Director comments
"Betting turnover in the first quarter increased by 37% due to continued growth in the market and developments in live-betting. Gross margin for the quarter was 0.3%, lower than the expected annual average. I believe this to be due mainly to normal quarterly fluctuations and have not detected any changes in market conditions", commented Johan Moazed, Managing Director of Betting Promotion.

Overview January – March 2008
Like the last quarter of 2007 the first quarter of the year saw intensive activity with all major soccer leagues in action. Betting turnover increased by 37% to SEK 3.6 billion (2.7) compared to the same period in 2007. The gross margin was 0.30% (0.84) which is lower than the expected annual average of 0.6 - 0.8%. Volatility between quarters is to be expected given the nature of the business.

During the quarter the company increased its capacity to trade on more live events. This enabled the company to increase its live-betting turnover.

Costs for the quarter were higher than usual as the company is investigating the possibility of an alternative listing. The board has not taken any final decision on this matter.

GameVillage
GameVillage is a soft gaming company of which Betting Promotion owns 50%. In the first quarter 2008 Betting Promotion made a loan to GameVillage of SEK 2.0 million. The total investment in GameVillage as at 31 March 2008 amounted to SEK 17.9 million. In addition to the investment Betting Promotion has also extended loans totalling SEK 3.6 million to GameVillage.

The investment in GameVillage, including loans, is now at the level regarded as necessary to achieve positive results. It is anticipated that GameVillage will start to show a trading profit from the end of the second quarter. Any further investment in GameVillage is unlikely to be significant. The business is progressing as planned.

Discussions are being held with various interested parties about a potential sale.

Market Sectors
Betting Promotion provides a breakdown of results between various market sectors. An important part of Betting Promotion’s business concept is to deliver full market-making services even if some market sectors offer better margins than others. Market making is the core of Betting Promotion’s business and is comparable to businesses that guarantee liquidity for different sorts of financial instruments.

Soccer
Soccer is the foundation of Betting Promotion’s business and during the quarter represented 63% of the total betting turnover. In the first quarter soccer showed a lower margin than previously achieved. The growth of this market sector continued to be good.

Live betting
Live betting is presently offered in soccer only. During the quarter, the turnover from live betting was 29% of the total turnover from soccer which confirmed the strong growth in this sector.

The margin for live-betting was 0.15% which was an improvement on the previous quarter but still lower than what the company expects long term. The company’s focus on improving margins had not taken full effect in the first quarter but will improve results in future.

Other
"Other" includes a number of different sports, e.g. tennis, ice hockey, rugby, basketball and American football. Betting Promotion continuously tries to develop and improve the gaming models in order to raise the margins on these markets.

(For full report see attached file.)
DOWNLOAD COMPLETE DOCUMENT