* Sells loss-making Italian ops to local management team
* Sees 7.1 mln stg charge from sale of unit
* Sale to reduce co's cash balance by 1.6 mln stg
* Says positive momentum in Q4 continues
* Shares fall as much as 2.7 pct
(Adds analysts comments, updates share movement)
July 22 (Reuters) - British online gaming company Sportingbet Plc said on Wednesday it was confident of achieving full-year forecasts and that it expected a 7.1 million pounds ($11.7 million) charge from the sale of its loss-making Italian operations.
The positive start to the fourth quarter, as reported in June, has continued through this seasonally quieter period with good growth in gross gaming revenue and margins being maintained, the company said in a statement.
Sportingbet said it sold its Italian unit to the local management team for a nominal consideration, but did not give details of the deal.
The sale of Sportingbet Italia will reduce the company's cash balance by 1.6 million pounds, it said.
Brokerage Collins Stewart said Sportingbet was unable to gain scale on product restrictions due to a tightly regulated Italian market.
'We would see Sportingbet's decision as sensible in terms of managing profit, but perhaps questioning the company's ability to drive earnings quality in an increasingly regulating environment,' Collins Stewart analyst Paul Leyland said in a note to clients.
Leyland said there should be no surprise until October unless Sportingbet settled its issues with the U.S. Department of Justice (DoJ).
The company had said in June that it was in talks with the DoJ in relation to its activities in the United States before online betting was effectively outlawed by legislation passed in 2006.
'Sportingbet will settle with the U.S. Department of Justice, and merge with, or be acquired by, a competitor,' Evolution Securities analyst Ivor Jones said in a note.
He rates the stock at 'buy' with a 73 pence price target.
Collins Stewart's Leyland said Sportingbet's top-line had been broadly flat for the last six quarters, and saw few catalysts to drive significant growth into 2010.
Leyland maintained his 'hold' rating on the stock.
Sportingbet shares were down 1.8 percent at 54.4 pence at 0925 GMT on the London Stock Exchange. They touched a market low of 53.50 earlier in the session.
($1=.6095 Pound)
(Reporting by Shivani Singh in Bangalore; Editing by Gopakumar Warrier) Keywords: SPORTINGBET/ (shivani.singh@thomsonreuters.com; +91 80 4135 5800; Reuters Messaging: shivani.singh.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
* Sees 7.1 mln stg charge from sale of unit
* Sale to reduce co's cash balance by 1.6 mln stg
* Says positive momentum in Q4 continues
* Shares fall as much as 2.7 pct
(Adds analysts comments, updates share movement)
July 22 (Reuters) - British online gaming company Sportingbet Plc said on Wednesday it was confident of achieving full-year forecasts and that it expected a 7.1 million pounds ($11.7 million) charge from the sale of its loss-making Italian operations.
The positive start to the fourth quarter, as reported in June, has continued through this seasonally quieter period with good growth in gross gaming revenue and margins being maintained, the company said in a statement.
Sportingbet said it sold its Italian unit to the local management team for a nominal consideration, but did not give details of the deal.
The sale of Sportingbet Italia will reduce the company's cash balance by 1.6 million pounds, it said.
Brokerage Collins Stewart said Sportingbet was unable to gain scale on product restrictions due to a tightly regulated Italian market.
'We would see Sportingbet's decision as sensible in terms of managing profit, but perhaps questioning the company's ability to drive earnings quality in an increasingly regulating environment,' Collins Stewart analyst Paul Leyland said in a note to clients.
Leyland said there should be no surprise until October unless Sportingbet settled its issues with the U.S. Department of Justice (DoJ).
The company had said in June that it was in talks with the DoJ in relation to its activities in the United States before online betting was effectively outlawed by legislation passed in 2006.
'Sportingbet will settle with the U.S. Department of Justice, and merge with, or be acquired by, a competitor,' Evolution Securities analyst Ivor Jones said in a note.
He rates the stock at 'buy' with a 73 pence price target.
Collins Stewart's Leyland said Sportingbet's top-line had been broadly flat for the last six quarters, and saw few catalysts to drive significant growth into 2010.
Leyland maintained his 'hold' rating on the stock.
Sportingbet shares were down 1.8 percent at 54.4 pence at 0925 GMT on the London Stock Exchange. They touched a market low of 53.50 earlier in the session.
($1=.6095 Pound)
(Reporting by Shivani Singh in Bangalore; Editing by Gopakumar Warrier) Keywords: SPORTINGBET/ (shivani.singh@thomsonreuters.com; +91 80 4135 5800; Reuters Messaging: shivani.singh.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.