GOOD MOBILE BUSINESS FOR PROBABILITY

25 January 2008

38 percent growth in third quarter trading


Mobile gambling specialist Probability plc has announced a rise in net gaming revenues of 38 percent, to GBP 930 198 for the third fiscal quarter. Total customer numbers for the period totalled just over 276 000, a rise of 22 percent.

Business media in the UK like the Financial Times have pointed out that Probability did not enjoy the easiest of starts on the London Alternative Investment Market (AIM), which was hit by the fallout of the US Unlawful Internet Gambling Enforcement Act just a week after listing. But with a business model backed by the market and rising revenues, the mobile phone gambling specialist has grown in confidence.

The company provides gambling games including casino, bingo and slots to customers on their mobile phones, a market in its infancy but growing fast.

Probability was first set up as a mobile lottery game, dubbed Mlotto, in 2004, before changing its name the following year. It listed on AIM in August 2006 at 82p after launching its casino suite. The shares rose for about a week, before declining sharply in the wake of the UIGEA and mass pullout from the USA by many listed gambling companies. Five months later, its value had more than halved, coming to rest at 39.5p in line with the rest of the sector, hit by the devastating changes in America, where financial transactions with online gambling companies were prohibited.

CEO Charles Cohen recalls those dark days, saying: "We were an unproven, loss-making business in a sector that was all heat and no light. No one knew the correct valuation of these companies."

Recently the group has raised its profile with several landmark deals (see previous InfoPowa reports). In September, it announced a white labelling contract with Rank Group, to provide mobile gaming for its database of customers. This was followed two months later by a deal with The Sun newspaper and a further tie-up with Orange, part of France Telecom. It has followed this with news that it has developed the first gambling game for the iPhone.

In early December, Probability revealed that its first-half pre-tax losses had narrowed to GBP 600 000 from GBP 2.1 million last year. It hit operating profitability for the first time in September 2007.

Since then, the shares have leapt 26p. Probability released its third-quarter numbers last week, in which net gaming revenues rose 38 percent quarter-on-quarter to GBP 930 198. The market still expects it to make a loss this year, but the predictions for 2008 are for the company to turn a profit of about GBP 700 000, all things being equal.

The group's latest game is called Crazy Camels, a variation on the electronic horse-racing games. Probability has themed the stand at the ICE exhibition accordingly, and even has a real palm tree, although no camels, because – as Cohen said – the smell would clear Earls Court.

Online Casino News courtesy of InfoPowa