I wrote this one up last week as a potentially risky trade and as I thought they might they have put out a trading update just after the quarter end as they did in Q1. This as it turns out, despite relatively subdued market activity, was positive with both revenue and profit in the quarter expected to be ahead of market expectations. EBITDA margins have also apparently continued to be strong, underpinned by increasing Average Revenue Per User (ARPU) and ongoing improvements in the efficiency and effectiveness of the Company's on line marketing efforts.
They also said that the above trends helped to offset slower customer acquisition trends driven by the summer and particularly during recent sporting events. Presumably the World Cup, as punters switch to betting on football matches instead of stocks perhaps. There was a less confident tone at the end of the statement as they said it was too early to predict the out come for the full year (which is fair enough) but they did say that with the benefit of ongoing initiatives to improve the Company's customer acquisition, retention and revenue generation the Board looks ahead with confidence.
So another reasonable quarter by the looks of things in the circumstances, but we will have to see how the second half pans out and if the recent slower trends continues or if a return to more volatile conditions will help them to make further progress as tougher comparisons kick in.
The shares have continued to trade in a volatile fashion and have bounced initially this morning on the back of this positive update, but they remain sub 500 pence at the moment. I'm not sure if there is enough in this statement for the market to get excited about so they may not race away from here, although they are coming off of an over sold situation. Equally it doesn't look at this stage as though there is any ammo for the bears in here so I don't think the downside target or gap is in any danger of closing at the moment either. So on balance probably one still to watch or, given the volatility, day trade it if you are into that sort of thing, although that is not my cup of tea - cheers.