May 30, 2012 / 6:57 AM / 5 years ago

UPDATE 1-Sportingbet hit by Spanish woes

LONDON, May 30 (Reuters) - British online gaming firm Sportingbet said it would cut costs in Europe after tough markets in Greece and Spain contributed to a 33 percent fall in underlying quarterly profit.

Operations outside of Australia were currently operating around breakeven, the company said as it reported third-quarter results on Wednesday.

Australia accounted for over 90 percent of its profits, it said.

“The group will continue to adjust the European cost base to mitigate both recessionary forces and the impact of new taxes,” Sportingbet said.

It has cut its annual fixed cost base by 15 million pounds ($23.5 million) since selling its Turkish-language business in November 2011.

Greece and Spain are Sportingbet’s two largest markets in Europe, but its Spanish business has been suspended since March 27 because of a legal injunction.

The company recently settled a tax bill for 14 million euros ($17.6 million) plus interest and is hoping to be awarded a new Spanish gaming licence early in June. It will apply to have the injunction lifted once a licence is obtained.

Sportingbet EBITDA in the quarter ended April 30 was 10.8 million pounds compared to 16.1 million a year ago, while net gaming revenue fell to 43.4 million pounds from 54.7 million.

In a separate statement, online gaming company said it would invest $50 million over the next two years to fund an expansion in social gaming.

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