January 15, 2009 / 8:37 PM / 11 years ago

Cryptologic CEO plans to open innovation centre

LONDON (Reuters) - Software developer Cryptologic plans to open a center to develop gaming technology beyond consoles and personal computers, the company told Reuters on Thursday.

A card dealer adjusts cards at the Paradise Walker-hill casino in Seoul September 17, 2007. REUTERS/Jo Yong-Hak

“We have partners and clients interested and we’re speaking to universities worldwide - it should throw up some interesting things,” Chief Executive Brian Hadfield said.

“It (will be) a place where customers, partners, universities and others can participate in defining and guiding the future of e-gaming,” he added.

Hadfield said he was keen to see what can be achieved by looking at the full extent of opportunities within mobile technology and social websites, as gaming evolves.

He was speaking after the company said its restructuring program, announced last October, is on track. Small cap Cryptologic’s shares gained 19.5 percent to 245 pence.

RESTRUCTURING

Cryptologic said it is on target to reduce total operating costs of approximately $13 million on an annualized basis by the end of second quarter 2009

The company also said the outsourcing of its poker network through strategic partnership with GTECH Corporation will be completed by the end of first quarter 2009.

“We looked at the business asked ourselves “what are we good at?” And we’re good at casino games and branded games,” Hadfield said.

Its partnership with GTECH, allows its customers to gamble on Boss Media’s International poker network with a wider customer base, a move which Cryptologic says reduced costs and turned its loss-making poker operation to profit.

Hadfield said he now sees a return to profitability and cash generation from the second quarter. He said organic growth will be difficult this year but the company’s strategy of adding new licensee revenue will help.

In the past few months Cryptologic has added 10 new licencees including 888.com, Partygaming and most recently GTS.

Cryptologic predicts full-year cash generation post restructuring of $11 million to $13 million and net profit in the range of $9 million to $10 million.

Hadfield said he prefers to be prudent and keeps expectations realistic, given the sharp downturn in the economy in the last quarter of 2008.

“In the current climate cash is king,” he said. Cryptologic has cash of between $42 million and $43 million, but Hadfield added if there is an acquisition that “adds-value and strengthens operations” then he would look at it.

Reporting by David Brett; Editing by Erica Billingham

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