Bwin's revenue drops as EU VAT charges weigh on results

Online gaming group Bwin. Party Digital Entertainment reported a decline in revenue in the first nine months of the year, as the impact of VAT charges from the European Union weighed on its results.

In the three quarters to the end of September, the FTSE 250 group, which last month agreed to be taken over by smaller rival GVC Holdings, posted an 8% year-on-year decline in total revenue to €429.9m, which it attributed to the impact of EU VAT and the sale of its non-core businesses.

The absence of a major football tournament also had negative impact on the results, as the group lacked the boost that was provided by the football World Cup in the corresponding period in 2014.

However, earnings before interest, tax, depreciation and amortisation rose 5% year-on-year to €79.8m and, excluding the EU VAT charges, they would have increased by 26%.

In a trading update released on Wednesday, Bwin indicated sports margin remained lower than in 2014, although it had recovered from the first half of this year, and it expects to meet its €15m cost savings target at the end of the current 12 months.

Despite the decline in revenue, the company said it remained upbeat about its outlook.

"Current trading has been strong, despite the impact of EU VAT and further declines in poker,” said group chief executive Norbert Teufelberger.

“With solid progress on expanding our mobile footprint and the full-year benefit of the cost savings already made, we remain confident about the outlook.”

Bwin shares were up 2.64% to 109.00p at 0859 BST on Wednesday.