Q&A: Martin Weigold, FD of Partygaming

Take us through the year-end results.

The numbers that the market are really interested in are the continuing
operations and I’m pleased to say that we’ve seen some very strong progress on
that front. Our revenues are up 112% to $325m (£168m). We saw clean EBITDA up by
158% to $50.9m. And on sign-ups we saw a very strong performance there as well ­
a 133% increase to over 527,000 sign-ups.

What has been the effect of the withdrawal from the US on the

We lost a substantial part of the revenue overnight; around three-quarters of
the revenue. So we had to restructure the cost base accordingly and we did that
in a three month period. We rationalised over 40% of the workforce and it
resulted in us taking, with a number of other items, a reorganisation charge of
$250m. There were other ways in which the business was impacted as well. We lost
some of our higher-yielding players to sites who continue to take US players
after the introduction of the Unlawful Internet Gaming Enforcement Act. I think
that can clearly be evidenced in our numbers where we had a 31% reduction in the
consolidated yield per active player day.

Earlier you mentioned the one-off charge of $250m for the
reorganisation post UIGEA. Can you give us a little more detail on this?

The $250m reorganisation charge was very much in line with the initial estimate
that we gave back in October when we released our third quarter key performance

The major components of it was a write-down of intangible fixed assets,
primarily relating to the acquisition of the business and assets of Empire Poker
earlier on in the year ­ that was around $115m.

We had payment processes issues that lead to an impairment charge of $64m. We
also had to write off some committed marketing expenditures of $34m. We are not
planning any further redundancies at this point.

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