Strong momentum at Probability

Mobile gambling technology specialist Probability plc has reported record revenues and strong momentum in its fourth quarter, with smartphone players now 76 percent of total users, up from 30 percent in just one year.

Key Performance Indicators for the three months ended 31 March 2012 included:

* Net gaming revenue in the quarter of GBP 2.1 million, 30 percent higher than the same quarter last year.

* 76 percent of all players during the quarter were using a smartphone or tablet, compared to 30 percent in the same quarter last year.

* Business to business revenues in the quarter were 246 percent higher than the same quarter last year.

Full year KPI summary included:

* NGR for the year ended 31 March 2012 of GBP 7.3 million was 35 percent higher than the previous year.

* Total customer deposits in the 2012 financial year were 58 percent higher than in the previous year. Deposits per player rose 41 percent for the year.

Operational Highlights:

* Business to consumer activity benefited from increased investment in television advertising. Total marketing spend in the fourth quarter was 109 percent higher than in the same quarter last year. The return period on investment in television advertising is stable at five to six months after a campaign has aired, with a positive net return thereafter.

* The first phase of the Probability’s planned integration into the newly enhanced Facebook platform for mobile has been completed. Customers can now use their Facebook accounts to initiate a registration and are even able to post their wins to Facebook from within their games. Initial customer response has been positive.

* During the fourth quarter, the Probability’s games were made available to William Hill customers through that gambling group’s mobile site. Other major contracts with significant gaming companies, including Ladbrokes, have been signed and are in the process of being integrated or are awaiting launch. Existing services with Paddy Power plc and Rank Group plc continue to perform strongly.

* Probability has completed the set up of its software for Caliente in Mexico, one of the largest land gambling operators in Latin America, which will launch subject to regulatory approval.

* The company continues to progress its application for a licence to supply technology to gambling operators in the state of Nevada.

Probability chief executive Charles Cohen, says: “We broke previous records for player deposits, turnover and B2B revenues this quarter.

“A big contributor to this came from ‘The Only Way Is Slots’ which we launched during the quarter. This has been a massive hit with our customers and was by far our most popular game in March.

“That momentum has continued. April is ahead in revenues and deposits from March, with B2B revenues stronger still.”

Commenting on B2C activity, Cohen noted: “TV advertising has helped us take the business to a new level this year and will drive our growth in B2C into the new financial year.

“As we have previously stated, investment in advertising on television generates strong returns but requires upfront investment which impacts profits and cash flow in the short term, whilst generating revenues thereafter. The payback period is stable at around five to six months for a campaign and the returns which we are seeing after this point are very healthy.

“During the year we have iteratively increased the size and scope of TV campaigns to ensure we are continuing to generate more income than expense from these customers.”

Cohen added that over hree quarters of Probability’s punters are now using a smartphone, compared to just over a quarter one year ago.

“Of these smartphone customers just over half are now using Android devices,” he revealed.

“This is a very important segment of the market which is ignored by many commentators and even competitors. It’s also hard to service, with increasing fragmentation of device capabilities and versions. Of the top fifty Android devices used by customers in the fourth quarter, a third of these didn’t even feature in the top fifty of the third quarter.”

Probability’s B2B customers now include Rank Group plc (Mecca, BlueSquare), Paddy Power and William Hill whose mobile customers can play Probability games using their existing gaming accounts with these companies, from within the same mobile sites.

“We are also in the process of setting up a service with Ladbrokes to provide their mobile customers with our full range of mobile games, as well as two other major European focussed operators,” Cohen revealed, predicting that 2012 is going to be a big year for the company and mobile gambling in general.

“There is a landgrab under way for the mobile gambler – most of whom we believe will be new players who are not currently gambling on the web,” Cohen opined. “Our regulated B2C and white label business is ideally positioned to exploit this opportunity.

“At the same time, web based operators are discovering the benefits and the complexities of this new mobile market. Our expertise in this space, as well as privileged regulatory position and technical capabilities, support a B2B proposition which has already demonstrated strong traction and has excellent prospects.

“Internationally, as more markets open to regulated activity, including individual States in the US, we see chances for both B2B licensing, and B2C/white label.

“These are exciting times to be in this market.”