First quarter revenues at Cryptologic Ltd (LON:CRP) fell by 23% to $7.6m compared to the previous three months as the Internet casino and branded gaming software group suffered from subdued wagering activity and a lower contribution from a key customer. Despite the slump, the company said it was encouraged by the outlook for the rest of the year which it said would be underpinned by a strong backlog of new business.

CryptoLogic saw sales of its branded games rise slightly to $1.3m, marking the fifth sequential quarter of growth. However, revenue from fully hosted virtual casino rooms fell to $5.1m from $8.7m between the two quarters, which was compounded by news last year that a key customer was switching hosted services away from CryptoLogic. Elsewhere, operating costs were slashed by 36% to $8.1m, with general and administrative expenses down by 12% to $2.2m. Overall, the company posted a loss of $3.4m against $24.8m in the last quarter, which included an exceptional $19.9m asset impairment charge.

Looking ahead, CryptoLogic said revenues were expected to gradually improve through 2010, driven by recent improvement in wagering activity and new licensees. Second quarter revenue to date is understood to be ahead of the same period in the previous quarter. CryptoLogic noted that branded games revenue was anticipated to gain momentum as new games come on stream. In turn, the number of new branded games launched by licensees to date and generating revenues currently stands at 108, with a backlog of approximately 92 games.

Brian Hadfield, CryptoLogic's president and chief executive, said: “While subdued wagering activity impacted our revenues in the first quarter, the outlook for 2010 as a whole remains encouraging. Operating costs have declined further while our revenue base is showing signs of improvement in the second quarter. The start of the World Cup soccer tournament in June provides short term uncertainty, however with a strong backlog of new business we expect our results to improve gradually as the year unfolds. As would be expected, the company continues to assess its revenue streams, costs, and strategic direction as it moves towards profitability.”

Separately today, the company has appointed Huw Spiers, aged 46, as its new chief financial officer with effect from August 15, 2010. He will succeed Stephen Taylor, who is leaving the company after five years to return to Canada.…

Unlock the rest of this article with a 14 day trial

Unlock with Email
Unlock with Google

Already have an account?
Login here