Final Results
Paddy Power plc
25 February 2003
Paddy Power plc
2002 Preliminary Results Announcement
Record Results
Paddy Power plc, trading as Paddy Power Bookmaker, Ireland's leading off-course
bookmaker, today announced record turnover, operating profit and earnings per
share for the year ended 31 December 2002.
2002 2001 Change
€ € %
Turnover 673.8m 461.1m +46
Operating profit 17.1m 8.5m +101
Profit Before Tax 17.8m 9.1m +96
Profit After Tax 14.8m 7.5m +96
EPS 31.38c 16.03c +96
Cash Balance 36.4m 18.3m +99
Final Dividend 6.8c 3.4c +100
Total Dividend 10.2c 5.1c +100
Commenting on the results John O'Reilly, Chief Executive said:
'2002 has been a record year for Paddy Power with excellent progress achieved in
our strategic objectives. Driven by our focus on customer service and innovative
product, we have continued to see strong growth in all channels of our core
Irish business where there remain significant further opportunities for
expansion.
In the UK, encouraged by the success of our On-line, telephone and limited
betting office estate, we accelerated our shop expansion programme in 2002. We
enter 2003 with three Betting Offices already trading, three in various stages
of fit-out and six further licence hearings scheduled for April and May. A
strong pipeline is also in place for the remainder of 2003 and beyond. Our UK
telephone business established last year continues to grow rapidly with UK
customers now forming a significant part of the customer base. UK customers now
account for the majority of our On-line customers and we continue to expect this
division to break even for 2003.'
Commenting on the results Ross Ivers, Finance Director said: 'We are delighted
with the financial performance in 2002. Turnover grew by 46% representing our
15th consecutive year of turnover growth with total operating profits increasing
by 101% to €17.1m. Strong turnover growth combined with solid gross margins
resulted in operating profit growth of 15% in the betting shops. The Telephone
division has made excellent progress in the year in its new UK business while
continuing to see strong growth in its Irish business. The On-line division saw
excellent growth in both turnover and operating performance.'
25th February 2003
Issued on behalf of Paddy Power plc by Drury Communications
For reference:
John O'Reilly Ross Ivers
Chief Executive Finance Director
Paddy Power plc Paddy Power plc
Tel: + 353 1 4045936 Tel: + 353 1 4045912
Mobile: + 353 87 254 1688 Mobile: + 353 87 668 8772
Mark Cahalane/ Trevor Phillips
Maire-Therese Culligan Holborn
Drury Communications Ltd Tel: + 44 207 929 5599
Tel: + 353 1 260 5000
Mobile: + 353 87 230 2737
2002 Preliminary Results
Chairman's Statement
I am delighted to report record turnover, operating profit and earnings per
share for Paddy Power plc in 2002. Turnover grew by 46% to €673.8m from €461.1m
in 2001 while operating profits increased by 101% to €17.1m. This reflected the
strong underlying growth throughout the year in our betting shops together with
the impact of cancelled sporting events in the first half of 2001 due to the
foot and mouth crisis. Our On-line division continues to progress rapidly with
significant improvement in turnover and gross win percentage. We are also
delighted with the success of our UK phone business which generated over 16,000
new customers as it commenced its expansion into the UK in 2002. These results
are discussed in detail later in this report.
Throughout the year, Paddy Power's commitment to customer service remains
constant as we seek to offer innovative, entertaining and value betting
opportunities that enhance the enjoyment of sporting and cultural events. This
was clearly demonstrated during the World Cup in 2002 where our money-back
specials led the market. As Ireland's leading betting brand, we will continue to
focus on customer service and being different as the driver of future growth.
The impetus for legislative change in the United Kingdom has increased with
further deregulation being proposed. Paddy Power fully supports the deregulation
of the betting office market in the UK as the current regime clearly inhibits
competition and restricts customer choice. The Irish market has demonstrated
that open licensing leads to a competitive market where the customer is the
winner. In addition, the ability to bet on the National Lottery contributes to
its popularity and has helped support National Lottery sales in Ireland while
they have been in decline in the UK.
2002 saw significant changes for our customers and the Company. The introduction
of the euro in January 2002 was smoothly implemented to the benefit of both the
customer and Paddy Power while the tax changes in the United Kingdom at the end
of 2001 gave rise to tax-free telephone betting service in Ireland in 2002.
Irish punters and Paddy Power also welcomed the reduction in Irish betting taxes
and charges paid by the customer from 5% to 3% (2% betting tax and 1% British
Horse Racing Board bookmaker levy). The reduction in betting taxes from 5% to 2%
introduced by the Minister For Finance from 1 May 2002 is not only popular with
the customer but helps safeguard the employment levels within the industry.
Lastly, the 5-year deal for British horse racing data and picture rights was
finally agreed and implemented in May 2002. Unfortunately, given the very high
cost of this deal we have had no choice but to pass most of this on to our
customers via the 1% levy with Paddy Power paying a proportion of the overall
cost.
I would like to acknowledge the important contribution of Mr John Corcoran who
acted as Chairman from 3 August 1988 until 20 June 2002 when I took over the
position. John has contributed immensely to the growth of the business. His long
term vision and enthusiasm have energised and hugely encouraged management
during the fourteen years that he served as Chairman and I am delighted that he
has agreed to stay on the Board as a non-executive director.
Two non-executive directors, Mr Peter O'Grady Walshe and Mr Michael Quinn, left
the Board during the course of the year and the Board wishes to acknowledge
their efforts during their tenure.
I would like to take this opportunity to welcome Mr Steve Thomas and Mr Fintan
Drury who joined the Board. In their short time with us they have already made a
significant contribution to the Board and I have no doubt that they will
continue to be a tremendous asset to the company.
The Board is recommending a final dividend of 6.8 cent per share payable on 6
June 2003 to shareholders on the register at the close of business on 7 March
2003. This is a 100% increase on 2001 and brings the total 2002 dividend to 10.2
cent.
We remain positive about the prospects for Paddy Power as we continue to further
expand our Irish operations while significantly increasing our operations in the
United Kingdom.
Operating Review
Paddy Power plc remains a small stake fixed odds bookmaker. Distribution is
through our 129 Irish betting offices, three United Kingdom betting offices, our
telephone betting service and our internet and interactive television services.
Betting Offices
The Group operates 132 betting offices throughout Ireland and the UK. (2001:
126). Five new offices were opened in Ireland in 2002 (2001:7) with 2
relocations (2001:2) and 1 extension (2001:nil). The Group continues to operate
four racecourse outlets as well as a shop in Lansdowne Road, home of the Irish
Rugby Football Union and home ground of the Football Association of Ireland. In
addition to the opening, relocation and extensions of outlets the Group has also
increased its level of maintenance across the estate in 2002. It is intended
that every office that is not scheduled to be relocated or extended will undergo
a degree of refurbishment by the end of 2004. In addition, the pipeline of new
units, relocations, and extensions is at record levels.
In the UK the Group opened one new office (2001: 1). While only in operation
three weeks by the year-end, it is already trading strongly. We have also been
awarded licences for three further shops which are in various stages of fit out
and will open in the first half of 2003. A further six licence applications have
been made and will be heard in April and May 2003. The Group is actively
developing a strong pipeline of properties for which licence applications will
be made in 2003 and beyond. The Group will establish a UK based operational
infrastructure in 2003 to support growth in 2003 and beyond.
At the year-end, the Group has no surplus property leases.
The Group has yet to install an EPOS system. Notwithstanding the administrative
benefits of an EPOS system, one will only be installed when we are satisfied
that it will not impact the flexibility of our trading ethos but add value to
the customer.
We continue to improve our in shop broadcasting systems during 2002 so that
Paddy Power now offers increased levels of live sports coverage throughout the
estate.
Average stake per slip for the year was €15.29 (2001: €13.70) an increase of
12%.
Telephone Betting
The telephone betting service, which operates under the name Paddy Power
Dial-a-Bet, has seen significant expansion in 2002. This has been driven by the
expansion into the UK, marketed through both national print advertising and the
use of teletext services. The profile of this new UK customer base clearly shows
the appeal of the service and Paddy Power brand outside of an Irish customer
base in the UK. The switch to tax-free betting in October 2001 has also driven
significant growth in our Irish turnover.
We have continued to drive new product through the phone service offering
increased levels of 'betting in running' in 2002. Dial-a-Bet now offers separate
racing and sports pages on teletext and is testing a 'live shows' and results
service. In addition, in response to customer demand, opening hours have also
been extended to 10pm daily to provide facilities to bet on US sports and
racing. We also regularly introduce extended hours to cater for key events. In
2002 this included the Breeders Cup where opening hours were extended to 11pm
and the FIFA World Cup finals where operations commenced from 6am.
We have continued to see strong growth in the numbers of active and registered
customers in 2002 in both markets.
Registered Active^
2002 2001 2002 2001
UK 17,460 1,043 5,974 1,043
Ireland 28,530 24,539 8,600 8,184
Total 45,990 25,582 14,574 9,227
^(active customers are those that have placed a bet at least once in the last
3 months)
Average stake per call was €92.89 (2001: €87.64) an increase of 6%.
In December 2002, Dial-a-Bet switched its telephone betting systems to the same
software platform as the internet systems. Following a commissioning period this
will allow the Group to make significant improvements to both customer service
and to internal operations though the provision of a single customer account for
both the On-line and Telephone channels. In addition, new call forecasting
systems were also installed in late 2002 the benefits of which will be seen in
2003.
On-line
The On-line division contains both the Internet and Interactive TV channels.
This division has seen excellent growth in customer numbers and activity in
2002.
Registered Active^
2002 2001 2002 2001
UK 72,838 15,302 19,159 7,077
Ireland/other 48,489 27,129 10,501 7,681
Total 121,327 42,431 29,660 14,758
^(active customers are those that have placed a bet at least once in the last
3 months)
Average stake per bet was €26.63 (2001: €28.20) a decrease of 6%. The On-line
channel is our largest distribution channel in the UK and continues to spearhead
awareness of the Paddy Power brand in the UK. As with the Dial-a-Bet business
the customer profile indicates a broad acceptance of the brand well beyond those
with an Irish connection. Our unusual brand approach continues to win customers
and awards with our unique view on Iain Duncan Smith's job prospects for 2003
judged one of the top 10 press advertisements in the UK in 2002.
The FIFA World Cup finals generated significant new registrations particularly
through our award-winning free fantasy soccer game. The site has also continued
to receive accolades for both content and usability, winning awards from both
the Sunday Times and Web User magazine in 2002.
Growth in the product range continues to be a key element of this channel given
the inherent diversity of its target market. The nature of the channel makes it
easier to promote a wide variety of betting opportunities and the paddyPower.com
product offering remains first class. For example, paddypower.com now offers
markets on 50 Football leagues from around the world and in excess of 25
sub-markets on televised football games.
An average active customer bets 13 times a month (2001:9).
Within this channel, interactive TV performance has disappointed as market
penetration by the operators, together with systems usability issues, failed to
meet expectations. We continue to review the potential of this channel.
As noted earlier, with Dial-a-Bet now being on the same software platform, it
offers a number of opportunities for improved customer service and operational
efficiency in 2003.
Financial Review
Turnover
Turnover for the year ended 31 December 2002 was €673.8m (2001: €461.1m) an
increase of 46% driven by excellent growth across all channels.
Betting office turnover grew by a total of 21% with like for like growth of
15.4% for the year as a whole. Cancellation of events in the early part of 2001
due to the foot and mouth crisis clearly impacted the like for like growth rates
of 22.5% in the first half of the year making direct comparisons difficult.
However, the Group continued to see like for like growth of 9% for the second
half of the year.
Incremental growth was generated through the six new betting offices, two
relocations, and one extension undertaken during the year together with the
carry forward impact of new units opened part way through 2001.
Telephone betting saw extremely strong growth in the year with total turnover of
€122.9m (2001: €55.5m) an increase of 121.3%. This growth has been fuelled by
the decision to offer tax-free betting to our Irish phone business following
changes to the UK betting tax regime in 2001. In addition, the penetration of
the UK market which commenced in late 2001 was expanded in 2002 as the Group
undertook a year long advertising campaign as well as making its prices
available on teletext in the UK. Turnover from the UK contributed 31% of
turnover for the Telephone channel during the year and is continuing to grow
each month as a percentage of total business.
The On-line division grew by 195.1% with turnover for the year reaching €102.8m
(2001: €34.8m). This business is now significantly larger in the UK than in
Ireland with 58% of its turnover coming from the UK. It is the Group's largest
single source of UK revenue.
Average slip values by channel
2002 2001 Change
€ € %
Betting Offices 15.29 13.70 12
Telephones 92.89 87.64 6
On-line 26.63 28.20 (6)
Total slip volumes by channel (000's)
2002 2001 Change
€ € %
Betting Offices 29,313 27,064 8
Telephones 1,323 634 109
On-line 3,861 1,238 212%
Gross Margin
Gross Margin, measured as the amount staked (excluding betting tax) less
winnings returned to customers, increased by 36.5% to €77.0m (2001: €56.4m). The
gross margin percentage fluctuated throughout the year within its normal ranges.
However, margins for the year overall were near the mid-point of their normal
trading ranges for each channel.
Total gross margin for the Group was 11.43% (2001:12.24%) reflecting a change in
mix by channel as well as changes within each channel. The betting offices saw
a slight decrease in gross margin percentage averaging 13.14% (2001: 13.36%) The
telephone gross margin percentage of 7.93% (2001: 8.42%) also saw a decrease.
However, a significant element of this was due to the lower margin obtained on
the UK telephone business as it seeks to reach critical mass. The On-line
division at 8.18 % (2001: 6.42%) improved its gross margin percentage as it made
further inroads into the mass market.
Gross Margin % Year to 31/12/02 Year to 31/12/01
% %
Betting offices 13.14 13.36
Telephone 7.93 8.42
On-line 8.18 6.42
Betting Taxes and Levies
2002 saw a number of changes to the betting tax regime. In Ireland, betting tax
was reduced from 5% to 2% effective from 1 May 2002. In the UK the 15% gross
profits betting tax which was introduced in October 2001 was in force for the
full year. In addition, the British Horse Racing Boards (BHB) new data rights
charge was implemented from 1 May 2002 under which 10% of gross profits on
British horse racing must be paid to the BHB. This has been recharged to the
customer via the 1% betting levy in the Irish betting offices and is likely to
result in a small cost to the Group.
Operating Profit
Operating profit increased by 101 % to €17.1m from €8.5m in 2001 reflecting the
strong turnover growth together with an overall increase in the Group's absolute
gross margin.
Year ended 31/12/2002 Year ended 31/12/2001
€m €m
Betting Offices 19.2 16.6
Telephones 0.3 1.0
On-line (2.4) (9.1)
Total 17.1 8.5
Operating profit leverage on the higher gross margin differed for each channel
due to their different fixed and variable cost structures. The betting offices
grew gross margin by €9.3m (19%) to €58.9m notwithstanding a decrease in their
gross margin percentage. Given the largely fixed operating cost base and the
level of new shop openings, profit grew by €2.5m (15.1%) to €19.2m. Telephone
gross margin increased by €5.1m (108%) to €9.7m. However operating profit fell
by €0.7m to €0.3m due to start-up costs associated with the UK operation, the
lower gross margin achieved on the new UK accounts and the new gross profits
taxes and BHB costs. The On-line division increased its gross margin by €6.2m
(276%) to €8.4m. Given its relatively low, fixed cost base and the level of
discretionary marketing expenditure, operating performance improved by €6.7m in
the period.
Tax Rate
The corporation tax charge for the year was €3.0m (2001: €1.5m restated)
representing an effective tax rate of 17% (2001:17% restated).
During the year, the Group adopted FRS-19 'Deferred tax' and thereby changed its
accounting policy for deferred tax to a full provision basis. This had no effect
on the current year tax charge. The effect on the prior year tax charge was a
decrease of €226k. The effect on net assets, by way of a prior year adjustment,
was a reduction at 31 December 2001 and 2000 of €571k and €797k respectively.
Cash Flow and Liquid Resources
Net cashflow from operating activities was €30.4m (2001: €11.5m). This includes
net cash inflow on customer account balances which totalled €0.6m (2001: €2.6m).
Fixed asset investments were €8.1m (2001: €6.4m) including freehold premises and
lease acquisition costs of €3.7m together with fit out costs for the betting
office estate and additional computer hardware and software for the Telephone
and On-line divisions.
Net cash balances at 31 December 2002 totalled €36.4m (2001:€18.3m) of which €
3.4m (2001:€2.8m) were customer balances. These were substantially invested in
short-term bank deposits, all of which mature in less than six months.
The Group has no borrowings.
Employees
The average number of persons employed by the Group during 2002 was 856 (2001:
757). At the year-end, the total number of employees was 904 (2001: 799).
Share Price
The Group's shares traded in the range of €4.05 to €6.0 (Stg£2.57 to Stg£3.78)
with the year high reached on 23 May 2002. The share price at 31 December 2002
was €5.08/Stg£3.23 (2001: €4.00/stg£2.55) giving a market capitalisation of
€240m /Stg£152m (2001: €189m/stg£120m). The year-end free float (shares not
held by the Board or their connected parties) is 68% (2001:42%).
Risk Management
The Group manages its betting risk through a central risk management team whose
role is to compile the initial odds and subsequently manage the odds throughout
the life of an event. The Group does not offer credit betting.
The Group's functional currency is the euro. Foreign exchange risk is small as
the majority of foreign currency transactions revenues and expenses provide a
natural hedge. The Group does not use any derivative financial instruments.
Dividend
The 2002 interim and proposed final dividend totals €4.8m an increase of 100% on
2001 (€2.4m). This reflects the Board's continuing optimism for the business
while being mindful of the Group's expansion plans.
Outlook
The outlook remains positive. Trading since the year-end has been strong with
margins well within normal trading ranges.
The Irish betting office market remains our core business and we are confident
it will continue to grow through a programme of new shop openings, relocations
and extensions together with underlying organic growth. The UK LBO estate, while
still in its infancy, will grow in 2003 and beyond to become a significant part
of Group operations.
Further growth in our Telephone business is expected in both Ireland and the UK
and we continue to expect our On-line business to break even for 2003.
As awareness of the Paddy Power brand continues to grow within the UK we expect
our UK distribution channels to become an increasingly important part of the
Group.
We will continue to review new product opportunities in the betting industry as
appropriate.
Stewart Kenny
Chairman
Paddy Power plc
25 February 2003
Consolidated Profit and Loss Account
Year ended 31 December 2002
Year ended Year ended
31/12/2002 31/12/2001
€'000 €'000
(Restated)
Turnover 673,788 461,075
Cost of winning bets paid (596,779) (404,624)
Gross profit 77,009 56,451
Operating expenses (59,926) (47,944)
Operating profit 17,083 8,507
Interest payable and similar charges (156) (71)
Interest receivable and similar income 895 656
Profit on ordinary activities before taxation 17,822 9,092
Tax on profit on ordinary activities (3,029) (1,537)
Profit on ordinary activities after taxation 14,793 7,555
Dividends (4,809) (2,404)
Retained profit for the year 9,984 5,151
Profit and loss account, start of year
As originally stated 21,792 16,867
Prior year adjustment (571) (797)
Restated 21,221 16,070
Profit and loss account, end of year 31,205 21,221
Earnings per Share
Basic €0.3138 €0.1603
Diluted €0.2900 €0.1482
The turnover and operating profit for the year is generated from continuing
operations.
The company has no recognised gains or losses in the financial year or the
preceding financial year other than those dealt with in the profit and loss
account.
Consolidated Balance Sheet
Year ended 31 December 2002
Year ended Year ended
31/12/2002 31/12/2001
€'000 €'000
(Restated)
Fixed assets
Tangible assets 24,994 22,749
Intangible assets 1,025 1,146
26,019 23,895
Current assets
Debtors 1,570 1,110
Cash at bank and in hand 36,373 18,307
37,943 19,417
Creditors (amounts falling due within one year) (22,159) (10,755)
Net current assets 15,784 8,662
Total assets less current liabilities 41,803 32,557
Creditors (amounts falling due after one year) (480) (793)
Provision for liabilities and charges (1,177) (1,602)
Net Assets 40,146 30,162
Capital and reserves
Called up share capital 4,714 4,714
Share premium 3,305 3,305
Capital redemption reserve fund 662 662
Capital conversion reserve fund 260 260
Profit and loss account 31,205 21,221
Shareholders' funds - all equity interests 40,146 30,162
Consolidated Cash Flow Statement
Year ended 31 December 2002
Year ended Year ended
31/12/2002 31/12/2001
€'000 €'000
Net cash inflow from operating activities 30,435 11,461
Returns on investments and servicing of finance
Interest received 717 656
Interest element of finance lease payments (149) (71)
568 585
Taxation
Corporation tax paid (1,466) (2,840)
Capital expenditure and financial investments
Acquisition of tangible fixed assets (8,083) (6,398)
Sale proceeds on disposal of fixed assets 31 70
(8,052) (6,328)
Equity dividends paid (3,206) (1,351)
Net cash inflow before financing 18,279 1,527
Financing
Capital element of finance lease payments (213) 1,006
Issue of new shares - (280)
Net cash inflow 18,066 2,253
Accounting Policies
Year ended 31 December 2002
These are the Group's accounting policies, in dealing with items which are
considered material in relation to the Company's financial statements, all of
which have been applied consistently in dealing with items considered material
in relation to the company's financial statements save for the adoption of
FRS-19 Deferred tax in 2002.
Basis of Preparation
The financial statements have been prepared in euro in accordance with generally
accepted accountancy principles under historic cost convention and comply with
financial reporting standards of the Accountancy Standards Boards as promulgated
by the Institute of Chartered Accountants in Ireland.
Basis of Consolidation
The Group financial statements consolidate the financial statements of the
Company and all its subsidiary undertakings made up to 31 December.
Turnover
Turnover, which is exclusive of betting tax, represents amounts received in
respect of bets placed on events which occurred during the year.
Intangible Assets - Goodwill
Goodwill arising on the acquisition of subsidiary undertakings, representing the
excess of cost over the fair value of the Group share of the identifiable assets
and liabilities acquired, is capitalised and amortised by equal annual
instalments against profit over its expected useful life, currently 20 years.
Provision is made for any impairment.
Tangible Fixed Assets and Depreciation
Tangible fixed assets are stated at original cost less accumulated depreciation.
Depreciation is calculated so as to write off the cost of tangible fixed assets
on a straight line basis over their estimated useful lives, as follows:
• Freehold property - 50 years
• Leasehold property and improvements - unexpired term of the lease, except
for leases with an initial term of ten or less years, which are
depreciated over the unexpired term of the lease plus the renewal length
of the lease, if there is a right of renewal.
• Fixtures, fittings and equipment - 5/7 years
• Computer equipment - 3 years
• Motor vehicles - 5 years
• Equipment screens - 5 years
• Leased equipment screens - 3 years
Leases
Assets held under finance leases are included in the balance sheet at their
capital value and are depreciated over the term of the lease. The corresponding
liabilities are recorded as a creditor and the interest element of the finance
lease rentals is charged to the profit and loss account over the term of the
lease to produce a constant rate of charge on the balance of capital repayment
outstanding.
Operating lease rentals are charged to the profit and loss account on a straight
line basis over the lease term.
Pensions
The Group operates a number of defined contribution schemes for certain
employees and executive directors. Contributions are charged to the profit and
loss account as incurred.
Foreign Currency
Transactions denominated in foreign currencies are translated at the exchange
rates ruling at the transaction date. Monetary assets and liabilities
denominated in foreign currencies are translated into Euro at the rates of
exchange ruling at the balance sheet date. The resulting profits and losses are
dealt with in the profit and loss account.
Taxation
The charge for taxation is based on the results for the year.
Corporation tax is calculated based on the taxable profits for the year.
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more, or a right to pay less tax in
the future have occurred at the balance sheet date.
Deferred tax is measured on a non-discounted basis at the tax rates that are
expected to apply in the periods in which timing differences reverse, based on
tax rates and laws enacted or substantively enacted at the balance sheet date.
Statutory Financial Statements
The financial information set out above does not constitute the statutory
financial statements of the Company for the year to 31 December 2002. The
statutory financial statement will be finalised on the basis of the above
information and together with the auditors' report thereon will be delivered to
the Registrar of Companies.
Notes to the Financial Statements
Year ended 31 December 2002
1. Turnover and Segmental Information
The turnover, operating profit and net assets of the Group relate to the
provision of betting services, substantially all of which are conducted in the
Republic of Ireland and Great Britain.
Turnover by Delivery Channel
Year ended Year ended
31/12/2002 31/12/2001
€'000 €'000
Licensed betting offices 448,096 370,698
Telephone betting 122,892 55,544
On-line betting 102,800 34,833
673,788 461,075
Turnover by Region
Year ended Year ended
31/12/2002 31/12/2001
€'000 €'000
Ireland & other 570,564 437,003
UK 103,224 24,072
673,788 461,075
Gross Profit by Delivery Channel
Year ended Year ended
31/12/2002 31/12/2001
€'000 €'000
Licensed betting offices 58,859 49,539
Telephone betting 9,743 4,677
On-line betting 8,407 2,235
77,009 56,451
Operating Profit/(Loss) by Delivery Channel Year ended Year ended
31/12/2002 31/12/2001
€'000 €'000
Licensed betting offices 19,167 16,649
Telephone betting 312 961
On-line betting (2,396) (9,103)
17,083 8,507
2. Prior year adjustment
During the year, the Company adopted FRS 19 - Deferred Tax, and thereby changed
its accounting policy in relation to accounting for deferred taxation. The
effect of the adjustments required on the profit and loss account was to
increase the deferred taxation charge in the year ended 31 December 2000 and
decrease the deferred taxation charge in the year ended 31 December 2001 by
€797,746 and €226,380 respectively.
The effect on the balance sheet at 31 December 2001 and at 31 December 2000 was
to increase the deferred taxation provision by €571,366 and €797,746
respectively. Equity shareholders' funds have also been re-stated resulting in a
reduction at 31 December 2001 and 31 December 2000 of €571,366 and €797,746.
3. Earnings per Share
Year ended Year ended
31/12/2002 31/12/2001
€'000 €'000
(Restated)
Profit for financial year 14,793 7,555
'000 '000
Weighted average number of shares in issue 47,144 47,144
Dilutive effect of options outstanding 3,856 3,848
Diluted weighted average number of shares 51,000 50,992
Basic earnings per share €0.3138 €0.1603
Diluted earnings per share €0.2900 €0.1482
4. Cash Flows
(a) Reconciliation of Operating Profit to Net Cash Inflow from
Operating Activities
Year ended Year ended
31/12/2002 31/12/2001
€'000 €'000
Operating profit 17,083 8,507
Depreciation 5,805 4,911
Amortisation of goodwill 121 121
Increase in debtors (282) (440)
Increase/(decrease) in creditors 7,706 (1,642)
Loss on disposal of fixed assets 2 4
Net cash inflow from operating activities 30,435 11,461
(b) Analysis of Changes in Cash During the Year
Year ended Year ended
31/12/2002 31/12/2001
€'000 €'000
Balance at 1 January 2001 18,307 16,054
Net cash inflow 18,066 2,253
Balance at 31 December 2002 36,373 18,307
(c) Analysis of the Balances of Cash as Shown in the Balance Sheet
2002 2001 Change
€'000 €'000 in period
€'000
Balance at 31 December 36,373 18,307 18,066
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