Andrew Flynn
Canadian Press
TORONTO (CP) - CryptoLogic Inc.'s move to capitalize on the demand for online poker has "paid off in spades," the Internet casino and poker software firm said Friday as it posted a 25 per cent fourth-quarter profit gain, revenues up by a third and saw its stock rise more than seven per cent.
"Cryptologic saw the large, untapped market opportunity of online poker and we leveraged our reputation for innovation and strong brand-name licensees to establish a very significant position in online poker," said Lewis Rose, CryptoLogic's president and CEO.
"This approach has paid off in spades."
The Toronto-based online gambling company, which reports its results in U.S. dollars, said it made $3.8 million, or 27 cents per share, in the three-month period ended Dec. 31. CryptoLogic (TSX:CRY) made $3 million, or 23 cents per share, in the same 2003 period.
After the announcement, made before the opening of financial markets, shares in Cryptologic rose $2.29, or 7.36 per cent, to $33.39 on the Toronto Stock Exchange.
For all of 2004, the company made $13.7 million, or $1.01 per share. It made $9.4 million, or 75 cents per share, in 2003.
Calling 2004 a "blue-chip year," Rose said told a conference call with analysts that the results stemmed from the company's strategy to diversify internationally, provide market-oriented products and regulatory leadership.
"We succeeded in 2004 by sticking to these strategies and remaining disciplined in our execution."
Quarterly revenue jumped to $17.9 million from $13.5 million the year before, helped by a 20 per cent rise in online poker fees of more than 165 per cent over the previous-year period. Internet casino revenue was also up, by 15 per cent over the fourth quarter of 2003.
"Traffic at our central poker room has increased to more than 5,300 players online simultaneously," Rose said.
"New versions of Cryptologic's online poker software, delivering multi-table and satellite tournament capabilities, a huge marketing draw for players has fuelled this growth."
Last month, the company renewed a multi-year exclusive agreement with the Ritz Club London Online for the use of its online casino and poker software.
Other key drivers of the company's improving results were publicity from its first live poker tournament in December, the televised Caribbean Poker Classic, and an expanded casino game portfolio, particularly in the popular slot category, which helped growth in Internet casino revenue.
Annual revenue increased to $63.7 million from $44.2 million.
CryptoLogic estimated that its traditionally strong first quarter should result in revenue ranging between $19 million and $19.4 million, with earnings of between $4.1 million and $4.3 million or 29 to 30 cents per share.
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