32Red Plc Floats with Capitalisation of £60 Million – September 23rd, 2005
32Red Plc is a UK-focused online gaming business predominantly comprising two distinct activities: casino and poker. The Company offers customers over 200 online casino games (including roulette, blackjack and slot machines), played against the house. The Company also operates a multiplayer online poker room.
Application has been made to the London Stock Exchange for the Ordinary Shares to be admitted to trading on AIM. Admission will take place and dealings in the Ordinary Shares on AIM will commence at 8.00 a.m. today. On Admission the Company will have 47,335,500 Ordinary Shares in issue and a market capitalisation of approximately £60 million.
Ed Ware, CEO of 32Red said:
“32Red has built a strong reputation in the UK for delivering one of the best gaming experiences available online. Our investment in software, fast payment processing, customer service and marketing has paid off and delivered strong revenue growth in a competitive market. Admission to AIM takes us forward to the next stage. It will give us greater flexibility in this fast moving market and the option to raise funds at the appropriate time.”
The Company’s principal activity (by revenue) is the operation and promotion of the online casino website 32red.com. 32Red offers a wide range of online casino games, including blackjack, roulette, baccarat and slots, some of which have several variations.
32Red has won various awards including “Best Online Casino” in 2003 and 2004 from Casinomeister, an independent body recognised in the online gaming industry as an advocate for players. In its review of 2004, Casinomeister described 32Red’s support as “exceptional customer service” and claims 32Red should “serve as a template for their peers and competitors as the epitome of a well-run casino.”
Customers are brought to the Company’s website through online and offline marketing and advertising and through affiliate programmes. Once logged onto the 32red.com website, new customers are able to either download casino software or use a Flash format to access casino tables. Following verification of their identity, customers are then asked to make a deposit into their own 32Red account to enable them to gamble for real money. Customers are also offered the option of playing for fun, without gambling real money.
The Directors consider that the 32red.com casino website has distinctive characteristics which make it particularly attractive to UK online casino players. 32red.com features an on-screen livery which contrasts with Las-Vegas style graphics favoured by some rival online casinos. 32Red also gives players the opportunity to enjoy UK celebrity Patsy Kensit as the voice of their croupier for casino games.
The Company generates net gaming revenue from its casino operations by taking a margin, also referred to as gross win. This is calculated as the difference between the value of bets placed and the value of bets paid out. For example, in the twelve months ended 30 June 2005, 32Red received a margin of approximately 2.65 per cent of all sterling bets placed on the 32red.com website.
The Company also offers certain other games under a section of the Company’s website known as Trafalgar Park. The revenue from Trafalgar Park represents less than 0.01 per cent. of the Company’s casino revenue and is included within the Company’s casino gross win for the purposes of this document.
The Company operates under a software agreement with MicroGaming for the provision of all the games offered by 32Red. This agreement includes a player tracking system which provides the Company with comprehensive data on its players and operations.
The Company generated net gaming revenue of approximately £5.68 million from casino operations in the year to 31 December 2004 and approximately £3.94 million in the six months to 30 June 2005.
In the six months to 30 June 2005, 32Red achieved an average yield per player per month of approximately £326. In the six months to 30 June 2005, 32Red had an average number of real money casino players per month of approximately 2,026 of which an average of approximately 30 per cent per month were new real money players.
