Online gaming firm Sportingbet saw its first quarter profits soar by almost a third as it exceeded expectations in its European business.
Pre-tax profit rose 31 per cent to £8.5m, compared with £6.5m last year. Net gaming revenue grew five per cent to £51.1m.
Sportingbet, which has customers across Europe, Australia, Canada, South America and South Africa, said trading since the start of the second quarter remained robust with margins in line with their historic average.
Michael Campbell, analyst with Daniel Stewart, said he believes the firm is undervalued by at least 20p a share excluding M&A activity. With expected deals coming up he set a target price of 130p, more than double the shares’ current 61p.
He said: “The business continues to deliver improved results despite ongoing grey regulatory issues across Europe.”
Last week, the company said its Swedish rival Unibet withdrew from merger talks, but Sportingbet remained in discussions with several other parties over potential deals.
Last week the company also announced a five-year joint venture with Russia’s First International Bookmakers, which trades under the Liga Stavok brand, to establish an online sports betting service in the country. Chief executive Andrew McIver said: “Entry into new geographic markets, such as our recently announced Russian joint venture, demonstrate the additional opportunities that are available to the group.”
Sportingbet shares have lost nearly a quarter of their value since the chief executive last month said the company was not up for sale.