Expansion strategy, appointme

RNS Number : 1736G

Gaming VC Holdings S.A.

27 January 2010

 



Press Release

27 January 2010

Gaming VC Holdings S.A.

("Gaming VC" or "the Group")

Expansion of CasinoClub and additional sportsbook offering

Appointment of key industry management 

Intended special dividend

Trading update

Gaming VC Holdings S.A. (AIM: GVC), a leading European online gaming company, today announces a significant expansion of the CasinoClub brand and an additional sportsbook offering expanding into new territories. This is in line with the Group's continued strategy of geographic diversification which is being supported by the key appointment of two industry veterans reporting to Chief Executive Kenneth Alexander and, who will manage the international expansion plans for both the casino and sportsbook offerings respectively.

CasinoClub will be expanded outside its core German market and into certain other markets. The expanded CasinoClub brand will be headed by Jon Salmon, the former Chief Marketing Officer for PartyGaming Plc and founder and former managing director of Ads Dot Com. Jon has a successful track record of building teams and launching gaming specific marketing programmes and brings in-depth gaming experience to the Group. Jon will also be responsible for additional marketing spend to maintain the existing German business.  

Additionally, Gaming VC is launching a number of new language versions of its sportsbook, for coverage in Southern Europe and elsewhere. This launch will be headed up by Jim Humberstone, formerly Head of Sportsbook at Sportingbet plc where he built up their European sportsbook product, regarded as one of the industry's most successful sportsbooks.

These two new management appointments further strengthen the senior team at Gaming VC and will enable the Group to continue its aggressive expansion into new products and territories. In total, the Group expects to invest up to €7 million during 2010 to build the new businesses. Both businesses are expected to be loss making in 2010 but make a contribution to earnings in 2011 and beyond.

The Group's strategy has enabled Gaming VC to have a much broader portfolio of products than it had a year ago. For example, the acquisition of Betboo in Latin America, the expansion of a sportsbook into wider geographic regions, the move towards more slots-orientated casino products, and also the usage of different software platforms. This changing mix has enabled diversification from the Group's historical bias on German customers, and allows Gaming VC to market to a wider customer demographic.

Intended Special Dividend

Gaming VC today also announces that following the Group's proposed redomiciliation to the Isle of Man and in the absence of unforeseen circumstances, the Group expects to declare a special dividend, in lieu of its normal 2009 final dividend, of not less than €0.50 cents per share. For the fiscal year 2008, Gaming VC paid a total dividend of €0.40 cents per share. In relation to the 2009 fiscal year, Gaming VC has already paid an interim dividend €0.20 cents per share to shareholders, and it is the intention of the Board to pay at least another €0.50 cents per share via this special dividend.

Current Isle of Man tax legislation means that such a dividend should attract no withholding tax, as opposed to the current rate of 15% deductable on dividends paid by the Group's current Luxembourg holding company. Any special dividend is expected to be paid in late May 2010, in line with the traditional payment date for final dividends.

The level of Gaming VC's future dividends will be affected by the Group's new investments as profits in 2010 are expected to be materially lower than in 2009. However, the Group's policy will remain that approximately 75% of net cash generated should be returned to shareholders by way of dividend each year, and, will be paid in two instalments, an interim dividend in mid Q4, and a final dividend in mid Q2 of the following year. 

A circular on the redomiciliation is being prepared and will be dispatched to shareholders in due course.

  Close of year and current trading 

Gaming VC also announces an update on the close of year trading as well as current trading.  

Net Gaming Revenues for 2009 were around €53.7 million, up 7.2% (2008: €50.1 million). Revenues from sport were €8.7 million up 38% (2008: €6.3 million), and revenues from gaming were €45.0 million, up 3% (2008: €43.8 million).

Total average daily revenues in 2009 were €142k, with €118 from gaming and €24k from sports. The margin on the sports book for 2009 was 15.8% (2008: 11.4%). Revenues from Betboo averaged €12k per day from 2 July to 31 December 2009.  

For the first 24 days in January 2010, Gaming revenues, averaging €139k per day, are 15% higher than the same period for 2009 (€120k). Sports wagers for the first 24 days in January 2010 were 31% higher than the same period in 2009. Following a number of unfavourable sports results in this 24 day period, the hold was 8.9% (24 days to 24 January 2009: 15.7%).  

The total cash position, including customer funds, at the close of business on Friday, 22 January 2010 was €19.0 million (31 December 2009: €19.2 million), of which Gaming VC's own funds represented around €17.6 million or €0.56.5 cents per share.

Kenneth Alexander, Chief Executive of Gaming VC, commented: "Despite challenging trading conditions within the sector throughout 2009, Gaming VC has successfully continued to deliver strategic growth in terms of enhanced product and geographic expansion outside its core German business. The Group welcomes Jon Salmon and Jim Humberstone to its management team, both of whom are very well respected executives in the e-gaming sector. Between them they have a wealth of experience as well as proven track records of delivering profitable growth in both casino and sportsbook. The Group's stronger management team in Europe and South America is well placed to continue delivering on its diversification strategy.

"We acknowledge the importance that investors attach to their income and are committed to paying dividends. The Board believes that its increased marketing investment and growth plans offer shareholders the best opportunity to protect and enhance their longer-term income while the expected Special Dividend should offset the short-term impact of these plans."

- Ends -

For further information:

Gaming VC Holdings S.A.
Kenneth Alexander, Chief Executive Officer	Tel: [phone]
Richard Cooper, Group Finance Director	www.gamingvc.com

Arbuthnot Securities Limited	Tel: [phone]
James Steel / Edward Gay, Corporate Finance	www.arbuthnotsecurities.co.uk

Media enquiries:

Abchurch
Henry Harrison-Topham / Nick Probert	Tel: [phone]
[e-mail]	www.abchurch-group.com

About GVC

Gaming VC is a leading European online gaming company. The Group is headquartered in Luxembourg and is licensed in Malta and the Netherlands Antilles.  

Gaming VC's management team has a wealth of experience in the gaming industry and has a significant track record in successfully identifying and penetrating new markets. The Group is focused on delivering an innovative product offering and is dedicated to providing sophisticated Customer Relationship Management (CRM) to ensure high levels of customer satisfaction.  

Gaming VC uses Internet marketing and affiliate networks for customer acquisition and customer retention purposes.

In December 2004, Gaming VC's shares were admitted to the AIM market of the London Stock Exchange. Gaming VC has not and has never transacted wagering activity by players in the US.  

Further information on the Group is available at www.gamingvc.com.

 

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