Final Results
World Gaming PLC
29 March 2006
FOR IMMEDIATE RELEASE 29 MARCH 2006
WORLD GAMING PLC
(TIDM:WGP)
FINAL RESULTS FOR THE THREE MONTHS AND YEAR ENDED 31 DECEMBER 2005
The Board of World Gaming plc ('World Gaming'), whose subsidiary companies (the
'Group) operate internet gaming sites and also license software offering a
comprehensive suite of internet gaming products and services to operators, is
pleased to announce the Group's fourth quarter and full year results for the
three and twelve months ended 31 December 2005.
HIGHLIGHTS - THREE MONTHS ENDED 31 DECEMBER 2005
•Acquisition of the SPORTSBETTING.COM business effective 1 October 2005
for $81.8m in cash and shares.
•Pre-tax profit before goodwill amortisation and exceptional items for
the quarter of $4.4m compared to $0.4m for the fourth quarter of 2004.
•21,414 new customers added in the quarter representing a 35%
increase in growth rates compared to the fourth quarter of 2004*.
•New European white-label launched in the fourth quarter of 2005.
•Strong cross-sell with 37% of sports bettors expanding
their play to casino gaming and poker products in the quarter.
HIGHLIGHTS - YEAR ENDED 31 DECEMBER 2005
•Listing on AIM in May 2005 raising £2.5m before costs.
•Five new licensees launched in 2005.
•65,000 new customers added in the year representing a 30%
increase in growth rates compared to 2004*.
•Pre-tax profit before goodwill amortisation and exceptional
items for the year up 24% to $6.6m compared to $5.2m for 2004.
* Assuming that the SPORTSBETTING.COM business had been owned throughout 2004 for
comparative purposes.
World Gaming plc CEO, Daniel Moran said: 'The Group began the year with a clear
strategy of acquiring an industry leading brand in the internet gaming space. In
addition to leveraging the Group's exceptional software and infrastructure
resources, the acquisition of the SPORTSBETTING.COM business has increased the
scale of the Group significantly and forms a solid base for continued organic
and acquisitive growth. The Group enters 2006 with a resolve to continue in its
strategy of maintaining and developing a global internet gaming Group.'
--ENDS--
Enquiries:
WORLD GAMING PLC Tel: +1 888 883 0833
Daniel Moran, Chief Executive
David Naismith, Chief Financial Officer
BISHOPSGATE COMMUNICATIONS LIMITED Tel: 020 7430 1600
Maxine Barnes
Dominic Barretto
DANIEL STEWART & COMPANY PLC Tel: 020 7776 6550
Ruari McGirr
The Company's Ordinary Shares have not been and will not be registered under the
U.S. Securities Act of 1933 (the 'Securities Act') and may not be offered or
sold in the United States or to a U.S. person (as such term is defined in
Regulations S under the Securities Act) absent registration or an applicable
exemption from registration under the Securities Act.
FULL STATEMENT ATTACHED
CHIEF EXECUTIVE'S STATEMENT
Introduction
The year to 31 December 2005 has been an exciting and extremely rewarding year
for the Group.
In May, the Group listed on AIM of the London Stock Exchange raising £2.5m
before costs at 52.5p per share, but more importantly, with a strategy to
leverage its software, infrastructure and cash resources through acquisition of
an industry leading Internet gaming operator.
In October, the Group announced that it had signed a conditional agreement for
the purchase of the SPORTSBETTING.COM business. The Group completed this
acquisition in December after raising a further £6.0m before costs through the
placement of 4.8m new shares at 125p and $40m in loan facilities. In addition,
the Group secured a $5m revolving credit facility that to this date remains
unutilised.
The terms of the acquisition agreement for the SPORTSBETTING.COM business were
structured based on profit before tax ('PBT') expectations for the calendar year
ending 31 December 2005, with no earn-out or rights to future profits for the
vendors. While all key indicators including deposit levels, customer sign ups
and wagering volumes remained strong throughout the fourth quarter,
industry-wide sports margins were unusually low. As a result PBT for the
SPORTSBETTING.COM business fell short of the maximum consideration threshold of
$15m by $1.4m. This shortfall saved the Group $14.2m in cash and share
consideration that would have otherwise been payable to the vendor.
The SPORTSBETTING.COM business, now considered the Group's Operating division,
has demonstrated solid growth in the first quarter under the Group's
ownership. Unusually low U.S. sports margins experienced in the fourth quarter
of 2005 and reported throughout the industry have recovered strongly in the
first quarter of 2006.
With respect to the software licensing business, the Group integrated five new
licensees during the past year and developed further its infrastructure network
during the past summer in order to improve the support of these licensees in
addition to its now wholly-owned Operating division.
The Group enters the second quarter of 2006 well placed to strengthen its
organic revenue growth in both its newly acquired Operating division and its
robust licensing offerings.
Financial Results
Three and twelve months ending 31 December 2005
Turnover for the quarter ended 31 December 2005 increased by $96.4m to $99.1m
compared to $2.7m for the same period last year. For the year ended 31 December
2005 turnover increased by $90.2m to $106.5m compared to $16.3m for the same
period last year. The increase in turnover is wholly attributable to the
Sportsbetting Transaction effective 1 October 2005 at which time the Group
acquired all of the business and assets of its then largest licensee whose
leading brand is SPORTSBETTING.COM (herein after referred to the 'Operating
division'). (See 'Sportsbetting Transaction' below).
The Group now maintains two key revenue streams:
1. Royalties and fees which includes royalties charged to the Group's continuing
licensees plus hosting fees charged to Sportingbet plc ('Sportingbet') for
hosting services provided from its wholly-owned hosting infrastructure; and
2. Operations, representing revenue derived from its wholly-owned internet
gaming sites acquired through the Sportsbetting Transaction.
Both the Sportsbetting Transaction, effective 1 October 2005 and the joint
venture transaction with Sportingbet, effective 1 October 2004 have materially
changed the composition of the Group's income in the current and comparative
periods. The acquisition of the Sportsbetting business has added a new revenue
stream for the fourth quarter and future periods through operations. As a result
of the acquisition, the Group no longer receives royalty revenue from the
Sportsbetting business. The transaction with Sportingbet, which has been
previously reported on, eliminated royalty revenue in return for certain
consideration and other arrangements.
Royalty and fee income decreased by 40.5% or $1.1m to $1.6m for the quarter
ended 31 December 2005, compared to $2.7m for the same period last year. The
reduction is attributable to no longer receiving software royalties from the
SPORTSBETTING.COM business as a result of the acquisition. For the year ended 31
December 2005 royalty and fee revenue declined by 45.0% or $7.3m to $9.0m. Of
this decline in royalty and fee revenue, $0.7m was attributable to no longer
receiving royalties from SPORTSBETTING.COM, and $7.5m was the full year effect
of no longer receiving royalties from Sportingbet before taking into the account
the elimination of development costs as a result of this transaction. However,
revenues from new and continuing licensees grew by $0.9m to $3.2m representing a
38.8% growth in like-for-like licensing revenue.
Turnover from operations, representing gross sports and horse racing wagers and
net casino and poker win was $97.5m for both the quarter and year ended 31
December 2005, compared to $nil for the same periods in 2004. For comparative
purposes, the proforma growth in turnover in the Operating division was 42.1% or
$28.9m for the quarter ended 31 December 2005 and 50.8% or $79.4m for the year
ended 31 December 2005, assuming that SPORTSBETTING.COM had been owned for the
entire period.
Gross profit increased $7.4m to $9.1m for the quarter ended 31 December 2005
compared to $1.7m for the same quarter last year. The increase in the quarter
was attributable to a gross profit contribution from the Operating division of
$8.3m after deducting $0.5m of customer bonuses and jackpot transfers in the
quarter. For comparative purposes, the proforma gross profit contribution from
the Operating division for the quarter ended 31 December 2004 was $7.0m after
deducting $0.3m in customer bonuses and jackpot transfers, representing an 18.9%
increase in gross profit contribution, subdued by the lower than expected sports
margins experienced in the quarter.
For the year ended 31 December 2005, gross profit remained unchanged at $14.4m
compared with 2004. The increase in gross profit from the Operating division
described above was offset by the effect of no longer receiving royalties from
Sportingbet. On a proforma basis, the gross profit contribution from the
Operating division for the year ended 31 December 2005 was $27.1m after
deducting $2.0m in customer bonuses and jackpot transfers, representing a 55.1%
increase in gross profit for the Sportsbetting business for the 12 month period.
The gross margin percentage for the quarter ended 31 December 2005 was 9.2%
compared to 63.8% for the same period last year. For the year ended 31 December
2005 gross margin percentage was 13.5% compared to 88.8% in 2004. The decrease
resulted from the significant change in revenue mix as a result of the
acquisition of SPORTSBETTING.COM. On a proforma basis the gross margin
percentage for the Operating division for the quarter ended 31 December 2005 was
8.5% compared to 10.1% for the quarter ended 31 December 2004. The reduction is
attributable to lower than expected win margins on sports in the quarter. The
proforma gross margin percentage for the Operating division for the 12 months
ended 31 December 2005 was 11.5% compared to 11.2% in 2004.
Operating expenses before goodwill amortisation increased by $3.3m to $4.7m
during the quarter ended 31 December 2005 compared to $1.4m for the same period
last year. The increase occurred primarily due to the inclusion of the Operating
division effective 1 October 2005. Costs associated with operations, primarily
consisting of transaction processing, customer service and marketing,
contributed $3.2m to total operating expenses in the quarter. Operating expenses
for the year decreased by $1.2m to $8.1m compared to $9.3m in 2004. The
reduction was the result of no longer paying for development costs as a result
of the Sportingbet Transaction, partially offset by including the cost base of
the Operating division in the fourth quarter.
Operating profit before goodwill amortisation and exceptional items for the
quarter ended 31 December 2005 increased by $4.1 to $4.4 compared to $0.4m for
the comparative period in 2004. For the year ended 31 December 2005, operating
profit before goodwill amortisation and exceptional items increased by $1.5m to
$6.6m compared to $5.1m for the same period last year.
Goodwill amortisation for the three and twelve months ended 31 December 2005 was
$0.9m compared to $nil for the comparative periods in 2004. Finance costs,
representing interest and loan cost amortisation, was $0.2m for the three and
twelve months ended 31 December 2005 compared to $nil for the comparative
periods in 2004.
Profit after tax and exceptional items for the three months ended 31 December
2005 was $3.5m, a reduction of 9.0m. Profit after tax and exceptional items for
the year ended 31 December 2005 decreased by $11.7m to $5.7m. The reduction in
both periods is entirely attributable to the extraordinary gain of $12.2m
relating to the Sportingbet Transaction included in 2004.
Basic earnings per share before goodwill amortisation and exceptional items per
participating ordinary share for the quarter ended 31 December 2005 was 10.5
cents (8.4 cents after goodwill amortisation and exceptional items) compared to
1.1 cents (38.6 cents after goodwill amortisation and exceptional items) for the
same quarter in 2004. Basic earnings per share before goodwill amortisation and
exceptional items per participating ordinary share for the year ended 31
December 2005 was 15.6 cents (13.5 cents after goodwill amortisation and
exceptional items) compared to 15.9 cents (53.4 cents after goodwill
amortisation and exceptional items) in 2004. Participating ordinary shares
include those shares that have voting and economic rights and exclude those
shares held by Sportingbet in accordance with the transaction effective 1
October 2004.
On a fully diluted basis earnings per share before goodwill amortisation and
exceptional items per participating ordinary share for the quarter ended 31
December 2005 was 9.4 cents (7.5 cents after goodwill amortisation and
exceptional items) compared to 0.9 cents (33.6 cents after goodwill amortisation
and exceptional items) for the same quarter in 2004. Fully diluted earnings per
share before goodwill amortisation and exceptional items per participating
ordinary share for the year ended 31 December 2005 was 14.0 cents (12.0 cents
after goodwill amortisation and exceptional items) compared to 13.9 cents (46.5
cents after goodwill amortisation and exceptional items) in 2004.
Review of Operations
The acquisition of SPORTSBETTING.COM has added a new dimension to the Group's
business. The scale of the business has increased dramatically and our income
stream is now more diversified. Apart from the well documented pressure on
industry-wide U.S. sports margins in the fourth quarter of 2005, all other key
indicators remained strong in the Operating division and these indicators have
continued into 2006.
In addition, the Group is continuing in its licensing activities which
successfully licensed or white-labelled five new licensees in 2005.
Planned hardware and software upgrades that took place in the second quarter
have established increases in processing speeds experienced by licensees'
customers and greater volume and storage capacity.
Operating Division (SPORTSBETTING.COM)
The Operating division added 21,414 new customers in the fourth quarter compared
to 15,907 new customers for the fourth quarter of 2004, a 35% increase in growth
rates than the comparative quarter of 2004. Of these new customers 51% were
converted to new active betting customers at an unchanged total marketing spend
when compared to the same period last year. For the year, 65,000 new customers
were added to the database, 30% more than in 2004.
Active customer acquisition costs were $101 for the year compared to $108 in
2004.
The average loss per active customer, being the total margin divided by active
customers over the quarter, was $240; across the year the average quarterly loss
per active customer was $266. The average life of a customer as at 31 December
2005 was approximately 472 days or 16 months compared to 440 days or 15 months
for as at 31 December 2004. The average lifetime value of a customer at 31
December 2005 was therefore approximately $1,397.
Sports margins including horse racing in the quarter were 4.0% (2004: 5.8%)
representing lower than expected margins on sports due to unusual results across
the industry. For the full year, sports margins including horse racing were 6.9%
(2004: 6.4%)
Gaming margins in the fourth quarter were 2.2% (2004: 2.4%).
SPORTSBETTING.COM's poker product was launched in the middle of 2005 and yielded
revenue before commissions of $1.4m (2004: $nil) for the quarter and $2.4m for
the year. The growth in poker, derived primarily from cross-selling the sports
betting product, continues to strengthen.
The Operating division delivered exceptional cross-sell from sports betting
players with an average 37.4% (2004: 36.3%) in the quarter of players placing a
sports wager going on to place a bet on a gaming product or poker. This yielded
$3.6m (2004: $3.0m) of gaming revenue and $0.8m (2004: $nil) of poker revenue
for the Group in the quarter. The cross-sell of products within the database is
enhanced by the Group's single player account status across all products.
Licensing Division
During the year, the Group added five new licensees. In addition, one new
licensee has been signed so far this year and is expected to go live in the
second quarter of 2006. In the fourth quarter of 2005, the Group launched its
first European white-label site. No material revenue is yet being generated by
these new licensees, however growth has been encouraging through the winter
sports seasons and the Group continues to monitor further licensing and
white-label opportunities.
Regulatory Developments
Over the past few years, authorities in certain jurisdictions, such as the
United States, have taken indirect steps to restrict online gaming by seeking to
prevent or deter banks, payment processors, media providers and other suppliers
from transacting with and providing services to online gaming operators, even
though many of these online gaming operators are legally licensed in the
jurisdiction in which they operate. The application or enforcement (or threat of
enforcement) of restrictive laws or regulations, or a change in sentiment by
regulatory authorities or the enactment of new legislation prohibiting or
restricting online gaming or services used by online gaming businesses or the
taking of certain indirect steps, may severely and adversely impact the business
and financial position of online gaming companies such as ours. Presently,
there are two pieces of proposed legislation being considered in the US House of
Representatives (one introduced by Congressman Leach and the other by
Congressman Goodlatte), with the likelihood of a third being introduced in the
US Senate by US Senator Kyl, as an amendment to other proposed legislation
presently being considered or, in the future, as proposed stand-alone
legislation. Each of these bills will need, in the ordinary course, to be
passed by both Houses of Congress, probably before October 2006 when the 109th
Congress is expected to adjourn, ahead of the mid-term 2006 elections. In
addition, the proposed bills offer 'carve-outs' to certain US domestic groups
that undertake US domestic gaming activities and the insertion of such
carve-outs by special interests in the past undoubtedly had an impact on the
failure of such legislation in the past. Obviously, we will continue to monitor
developments closely.
In November 2004, the World Trade Organisation ('WTO') held that the US was in
violation of its commitments under international trade laws by not allowing
operators of Internet Gaming services licensed in Antigua and Barbuda to access
US markets. The decision was appealed and the WTO ruled that the US had shown
that its laws prohibiting gambling are 'necessary to protect public morals or
maintain public order' but had failed to demonstrate, in light of its laws in
respect of on-line gambling on horseracing, that such prohibitions are applied
equally to both foreign and domestic providers of on-line gambling services for
horseracing. Consequently, the WTO recommended that the US bring its laws into
conformity with its obligations under international trade rules. Pursuant to
the report of the arbitrator circulated in August 2005, the US has been given
until 3 April 2006 to clarify its policies on Internet gambling and the
purported extraterritorial application of its laws. It remains to be seen what
legislative proposals, if any, will be adopted in the US in relation to Internet
gambling and whether this will lead to a change in US Internet Gaming policy or
what effect this issue will have on the current proposed legislation in the US
House of Representatives.
Trading Outlook
The Group has recorded strong performance to date in the first quarter of 2006.
Sports margins for the Operating division have been relatively strong throughout
the first quarter after the lower than expected margins experienced in the
fourth quarter of 2005.
The Group experienced a successful NFL Superbowl both in volume of transactions
processed on and the trading result for the day.
During the first quarter of 2006, the Board has concentrated on migrating
SPORTSBETTING.COM's marketing function to within the Group. This is on schedule
to be completed during the third quarter of 2006. Throughout this period, the
vendors of the SPORTSBETTING.COM business remain involved in day-to-day
operations. The remaining elements of the business were already managed or
controlled by the Group and therefore will require no further integration.
In 2006 the Group will launch further software and infrastructure upgrades
including a new casino software release scheduled for the third quarter of 2006.
In March 2006, the Group launched a 3-card poker product to further enhance its
casino offering.
As a result of seasonality, the second quarter is historically the quietest
quarter in terms of sports wagering volume. The Group expects to mitigate this
in part through continued strong growth in non-event reliant products such as
poker and casino.
Sportsbetting Transaction
On October 25, 2005 the Group announced that it had entered into a conditional
agreement to acquire certain assets of Real Entertainment Ltd. and the entire
issued capital of DNI Holdings Ltd. (together the 'SPORTSBETTING.COM group'),
which was then the Group's largest licensee. The transaction subsequently
completed on December 13, 2005.
The original terms of the acquisition were for a maximum consideration of up to
$96m payable 75 percent in cash and 25 percent in new ordinary shares of the
Company. On completion in December, $54m was paid in cash to the Vendors with
the outstanding balance depending on the final agreed profit before tax ('PBT')
for the twelve months ending 31 December 2005.
In March 2006, the Group and the vendors of the SPORTSBETTING.COM business
agreed the final PBT for the twelve months ended 31 December 2005 of $13.6m.
Under the terms of the acquisition agreement this meant that total consideration
of $81.8m would be payable, being 6 times the PBT for the period. During the
period between completion and agreement of the final PBT, the Group had paid a
further $10.8m into escrow. On agreement of the final PBT the Group recovered
$3.5m of these escrow funds and $1.2m was released to the vendors. The remaining
$6.1m remains in escrow subject to warranty caveats and will be released to the
vendors on 1 October 2006 subject to no warranties having been breached.
In addition, on agreement of the PBT, the company issued $20.4m in new ordinary
shares of the Company issued at 125 pence to the vendor subject to agreed
lock-up arrangements. $2.0m of these shares remain in escrow subject to the same
warranty covenants mentioned above.
Financing of the cash portion of consideration was through the Group's existing
cash reserves, plus a $40m loan facility arranged through Barclays PLC. The term
of the loan is 27 months from the drawdown date of December 12, 2005. Repayments
are due quarterly throughout the term of the loan. In addition, the Group has an
unutilised revolving facility with Barclays for $5m. Further cash for the
purpose of the Transaction was raised through the Placing of 4.8m new ordinary
shares of the Company raising £6m for the Transaction before expenses.
The transaction had an effective date of 1 October 2005. The effective date,
which is earlier than the completion date is the date from which all of
SPORTSBETTING.COM's revenues and costs accrue to the Group. The business was
acquired on a cash-free, debt-free basis as at the effective date.
Daniel Moran
Chief Executive
The information contained herein is not for publication or distribution to
persons in the United States of America. The securities referred to herein
have not been and will not be registered under the US Securities Act 1933, as
amended, and may not be offered or sold without registration thereunder or
pursuant to an available exemption therefrom.
World Gaming plc
Unaudited Consolidated Profit and Loss Account
Three and twelve months ended the 31 December 2005 and 2004
Note 3 months 3 months 12 months 12 months
31 December 31 December 31 December 31 December
2005 2004 2005 2004
$'000 $'000 $'000 $'000
TURNOVER 2 99,143 2,738 106,471 16,288
Cost of sales (90,021) (991) (92,057) (1,871)
-------- -------- -------- -------
GROSS PROFIT 9,122 1,747 14,414 14,417
-------- -------- -------- -------
Goodwill amortisation (882) - (882) -
Other
administration expenses (4,687) (1,405) (8,110) (9,337)
-------- -------- -------- -------
Total administration expenses (5,569) (1,405) (8,992) (9,337)
-------- -------- -------- -------
Operating profit
before goodwill amortisation 4,435 342 6,304 5,080
Goodwill amortisation (882) - (882) -
-------- -------- -------- -------
Operating profit
before finance costs and
extraordinary items 3,553 342 5,422 5,080
Finance costs 5 (4) 23 269 103
-------- -------- -------- -------
Profit before taxation and
extraordinary items 3,549 365 5,691 5,183
Extraordinary item - 12,187 - 12,187
-------- -------- -------- -------
Profit before tax 3,549 12,552 5,691 17,370
-------- -------- -------- -------
Taxation - - - -
Profit for the
financial period 3,549 12,552 5,691 17,370
======== ======== ======== =======
Earnings per ordinary share (cents)3
Basic 9.1 38.6 14.6 53.4
Diluted 8.0 33.6 12.8 46.5
Earnings per share adjusted (cents)3
Basic 11.4 1.1 16.8 15.9
Diluted 10.0 0.9 14.8 13.9
World Gaming plc
Consolidated Balance Sheets
As at 31 December 2005 and 2004
31 December 31 December
2005 2004
Note (unaudited)
$'000 $'000
FIXED ASSETS
Intangible assets - goodwill 85,662 -
Tangible assets 1,231 1,419
---------- ---------
86,893 1,419
CURRENT ASSETS
Debtors 9,601 13,672
Prepayments and accrued income 989 344
Consideration recoverable 3,481 -
Cash at bank and in hand 7,605 7,944
---------- ---------
21,676 21,960
CREDITORS: Amounts falling due within one year
Bank loans 5 14,711 -
Other creditors and accruals 9,659 7,094
Deferred consideration 3,600 -
---------- ---------
27,970 7,094
---------- ---------
NET CURRENT (LIABILITIES)/ASSETS (6,294) 14,866
---------- ---------
TOTAL ASSETS LESS CURRENT LIABILITIES 80,599 16,285
CREDITORS: Amounts falling due after more than
one year
Bank loans 5 24,396 -
PROVISION FOR LIABILITIES AND CHARGES - 257
---------- ---------
NET ASSETS 56,203 16,028
========== =========
CAPITAL AND RESERVES
Called up share capital 197 134
Share premium account 27,793 1,675
Shares to be issued 8,440 -
Deferred compensation reserve 567 567
Merger reserve 23,528 23,528
Profit and loss account (4,322) (9,876)
---------- ---------
SHAREHOLDERS' FUNDS 56,203 16,028
========== =========
World Gaming plc
Unaudited Consolidated Cash Flow statement
Year to 31 December 2005 and 2004
12 months ended 12 months ended
31 December 31 December
2005 2004
$'000 $'000
Net cash inflow from operating activities 4,898 6,374
Returns on investment and servicing of
finance 438 103
Acquisitions (65,244) -
Capital expenditure (605) (1,065)
Consideration received - Sportingbet 7,000 2,032
--------- ---------
CASH INFLOW/(OUTFLOW) BEFORE FINANCING (53,513) 7,444
Financing 39,068 (2,243)
Issue of shares 14,181 62
Net (DECREASE)/INCREASE IN CASH IN THE
PERIOD (264) 5,263
========= =========
RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN
NET FUNDS
(Decrease)/Increase in cash in the period (264) 5,263
Cash (inflow)/outflow from
(increase)/decrease in debt (40,000) 2,243
--------- ---------
MOVEMENT IN NET FUNDS RESULTING FROM CASH
FLOWS IN PERIOD (40,264) 7,506
--------- ---------
Currency translation differences (75) (189)
Finance Lease paid 14 -
Non-cash movements 893 900
--------- ---------
Movement in net funds in period (39,432) 8,217
--------- ---------
--------- ---------
Net funds/(debt) at start of period 7,930 (287)
--------- ---------
NET (DEBT)/ FUNDS AT END OF PERIOD (31,502) 7,930
========= =========
1. Consolidated statement of total recognised gains and losses
3 months 3 months 12 months 12 months
31 Dec 31 Dec 31 Dec 31 Dec
2005 2004 2005 2004
$'000 $'000 $'000 $'000
Profit for the financial period 3,549 12,552 5,691 17,370
Currency translation difference
on foreign currency net
investment (157) 32 (142) 168
-------- -------- -------- --------
Total recognised gains relating
to the year 3,392 12,584 5,549 17,538
======== ======== ======== ========
2. Analysis of turnover
3 months 3 months 12 months 12 months
31 Dec 31 Dec 31 Dec 31 Dec
2005 2004 2005 2004
$'000 $'000 $'000 $'000
Analysis of revenue by activity:
Sports betting & racing 91,847 - 91,847 -
Casino and gaming 4,239 - 4,239 -
Poker rake 1,427 - 1,427 -
Royalty and fee income 1,630 2,738 8,958 16,288
-------- -------- --------- --------
99,143 2,738 106,471 16,288
======== ======== ========= ========
3. Earnings per share
Turnover represents the amount staked in respect of bets placed on sporting and
horse racing events and net win in respect of bets placed on casino games and
rake for poker games that have concluded in the period.
The calculation of basic earnings per share for the year is based on the profit
after tax at 31 December 2005 of $5.7m (2004: $17.4m) and on the weighted
average number of ordinary shares in issue of 39,017,629 (2004: 32,475,203).
The calculation of diluted earnings per share for the year is based on the
profit after tax at 31 December 2005 of $5.7m (2004: $17.4m) and on the weighted
average number of ordinary shares in issue adjusted to assume the exercise of
options over shares and the dilutive effect of shares to be issued in respect of
the acquisition in the year of 44,372,787 (2004: 37,383,953).
Adjusted basic and diluted earnings per share before goodwill and exceptional
items for the year excludes amortisation of goodwill of $0.9m (2004: $nil) and
exceptional items of $12.2m in 2004.
The calculation of basic earnings per share for the quarter is based on the
profit after tax at 31 December 2005 of $3.5m (2004: $12.6m) and on the weighted
average number of ordinary shares in issue of 39,017,629 (2004: 32,475,203).
The calculation of diluted earnings per share for the quarter is based on the
profit after tax at 31 December 2005 of $3.5m (2004: $12.2m) and on the weighted
average number of ordinary shares in issue adjusted to assume the exercise of
options over shares and the dilutive effect of shares to be issued in respect of
the acquisition in the quarter of 44,372,787 (2004: 37,383,953).
Adjusted basic and diluted earnings per share before goodwill and exceptional
items for the quarter excludes amortisation of goodwill of $0.9m (2004: $nil)
and exceptional items of $12.2m in the quarter 2004.
Earnings per share excludes shares with no voting or economic rights in respect
of the 13,506,204 shares held by Sportingbet PLC and its affiliates that have
been set aside as a result of the Transaction with Sportingbet PLC and may be
repurchased by the Company for an aggregate $1 when the Company has retained
earnings to do so.
4. Basis of preparation
There have been no material changes to the accounting policies of the Group as
set out in 31 December 2004 consolidated financial statements.
5. Finance costs
3 months 3 months 12 months 12 months
31 Dec 31 Dec 31 Dec 31 Dec
2005 2004 2005 2004
$'000 $'000 $'000 $'000
Interest receivable 165 23 438 111
Interest payable (145) - (145) (8)
Amortisation of loan agreement
fees (24) - (24) -
-------- -------- --------- --------
(4) 23 269 103-
======== ======== ========= ========
Deferred finance costs of $1,256, netted against the loan balances outstanding
at 31 December 2005 are being amortised over the period of the loan agreement.
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