RNS Number:4387Q
Global Gaming Technologies PLC
31 January 2007
31 January 2007
GLOBAL GAMING TECHNOLOGIES PLC
Preliminary Results for the Year ended 31 July 2006
Chairman's Statement
Results
The Board of Global Gaming Technologies plc ("GGT" or "the Company") announces
today the Group's audited results for the year ended 31 July 2006. In the
period under review the Group recorded a loss before tax and impairment of
goodwill of #1,363,992. Following the reorganisation of the Company announced
on 27 June, the Board has reviewed the carrying value of goodwill resulting from
the acquisition of Event Data Correlation Limited in 2005 and decided to apply a
non-cash impairment adjustment of #10.54m, which is charged to the profit and
loss account for the year. As a result there is a loss before tax and after
goodwill impairment adjustment of #11.90 million. There is a loss per share of
6.37p (2005: loss per share: 0.84p). No dividend is proposed.
On 27 June the Board announced that Paul Pullinger, Chief Executive of the
Company and Chris Cleverly, a Non-executive director, the two principal
shareholders, had resigned from the Board with immediate effect and that I had
assumed an executive role on the Board for an interim period until a new CEO is
appointed. In addition, Corvus Capital Inc, the international investment
company headed by Andrew Regan, had acquired shares from Paul Pullinger, Chris
Cleverly and a former GGT director giving it a total holding of 48,750,874
ordinary shares, equating to 26.0 per cent of GGT's issued share capital.
The initial board changes I refer to above and, the arrival of Corvus Capital as
a strategic shareholder in the Company, were the first steps in our primary
objective to re-establish GGT's strategy to build a business providing enabling
data and media technologies to the gaming industry. It is our intention to
acquire complementary businesses in the origination and supply of critical data
and content to the gaming industry in order to build a cash generative and
profitable business. In becoming a significant shareholder in GGT, Corvus
Capital fully endorses this strategy and GGT can, in turn, benefit from the
range of resources available within Corvus Capital to pursue this strategy.
We have commenced the dual process of sourcing potential acquisitions and
finding a new Chief Executive for the business, neither of which are mutually
exclusive. In addition, costs within the business have been stringently cut
back and, as I refer to earlier in this statement, the Board has decided to take
a very prudent view regarding the treatment of goodwill.
Outlook
I am pleased to say that we are currently reviewing a number of businesses which
have met with our initial investment criteria and whilst we are still at an
early stage with each, I am encouraged by the progress made to date and will
report further progress to shareholders as and when it is appropriate to do so.
Ron Trenter
Chairman
31 January 2007
Enquiries: John Bick tel: 07917 649362
GLOBAL GAMING TECHNOLOGIES PLC
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JULY 2006
2006 2005
Notes # #
Net trading margin (11,646) (302)
Administrative expenses:
Impairment of goodwill (10,539,668) -
Other administrative expenses (1,401,908) (377,972)
(11,941,576) (377,972)
Other operating income 35,585 19,839
Operating loss 3 (11,917,637) (358,435)
Other income 6 13,977 13,392
Loss on ordinary activities
before (11,903,660) (345,043)
taxation
Tax on loss on ordinary 7 - -
activities
Loss on ordinary activities
after 8 & 18 (11,903,660) (345,043)
taxation
Loss per share
- Basic and diluted 9 #(0.0637) #(0.0084)
The profit and loss account has been prepared on the basis that all operations are
continuing operations.
There are no recognised gains and losses other than those passing through the
profit and loss account.
The comparatives cover the period from incorporation to 31 July 2005.
GLOBAL GAMING TECHNOLOGIES PLC
BALANCE SHEETS
AS AT 31 JULY 2006
Group Company
2006 2005 2006 2005
Notes # # # #
Fixed assets
Intangible assets 10 100,000 11,248,205 - -
Tangible assets 11 - 1,844 - -
Investments 12 - - 100,000 10,989,540
100,000 11,250,049 100,000 10,989,540
Current assets
Debtors 13 23,799 55,742 11,666 1,110,402
Cash at bank and in
hand 56,941 750,578 - -
80,740 806,320 11,666 1,110,402
Creditors: amounts
falling due within
one year 14 (90,037) (115,392) (48,266) (19,954)
Net current assets (9,297) 690,928 (36,600) 1,090,448
Total assets less
current liabilities 90,703 11,940,977 63,400 12,079,988
Capital and reserves
Called up share
capital 17 471,673 465,146 471,673 465,146
Share premium account 18 1,364,673 1,370,990 1,364,673 1,370,990
Merger reserve 18 - 10,397,916 - 10,397,916
Profit and loss
account 18 (1,745,643) (293,075) (1,772,946) (154,064)
Shareholders' funds -
equity interests 19 90,703 11,940,977 63,400 12,079,988
GLOBAL GAMING TECHNOLOGIES PLC
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 JULY 2006
2006 2005
Notes # #
Net cash outflow from operating 20 (743,745) (534,215)
activities
Returns on investments and servicing
of finance
Interest received 13,977 13,392
Net cash inflow from returns on
13,977 13,392
investments
and servicing of finance
Capital expenditure
Receipts from sales of tangible 380 -
fixed assets
Net cash inflow from capital expenditure
380 -
and
financial investment
Acquisitions and disposals
Purchase of subsidiary 10 35,541 (256,207)
undertakings
Cash acquired with subsidiary - 26,889
undertakings
Net cash inflow/(outflow) on acquisitions
35,541 (229,318)
and
disposals
Net cash outflow before financing (693,847) (750,141)
Financing
Issue of ordinary share capital 210 1,675,000
Cost of share issue - (174,281)
Net cash inflow from financing 210 1,500,719
(Decrease)/increase in cash (693,637) 750,578
GLOBAL GAMING TECHNOLOGIES PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 JULY 2006
1 Accounting policies
1.1 Basis of preparation
The accounts have been prepared under the historical cost convention and on a going
concern basis.
The accounts have been prepared in accordance with United Kingdom applicable
accounting standards (United Kingdom Generally Accepted Accounting Practice), which is
applied consistently (except as otherwise stated).
1.2 Going concern
The financial statements have been prepared on a going concern basis on the basis that
the directors have secured sufficient funds to ensure that the company can continue to
meet its liabilities as and when they fall due and are actively reviewing future
funding requirements. The directors have considered the cash requirements for 12
months from the balance sheet date. The accounts do not contain any adjustments that
would be necessary should this basis not be appropriate.
1.3 Basis of consolidation
The consolidated profit and loss account and balance sheet include the accounts of the
company and its subsidiary undertaking, Event Data Correlation Limited, made up to 31
July 2006. The results of subsidiaries sold or acquired are included in the profit and
loss account up to, or from the date control passes. Intra-group sales and profits are
eliminated fully on consolidation. A separate profit and loss accounting dealing with
the results of the company only has not been presented as permitted by Section 230 of
the Companies Act 1985.
1.4 Net trading margin
Net trading margin represents the net results of trades placed in the betting markets
as the outcome of the bet is settled. The directors consider that for the group's
operations during the period, net trading margin is a better description of its
generation of income from its principal activity than turnover and hence have used net
trading margin as an equivalent for turnover in these accounts.
1.5 Goodwill
Goodwill is amortised over its useful economic life, which is considered for each
acquisition separately. It is reviewed for impairment at the end of its first full
financial year following the acquisition and in other periods if events or changes in
circumstances indicate that the carrying value may not be recoverable. Goodwill
relating to Event Data Correlation Limited is estimated to have a life of 20 years.
1.6 Software development licence
The software development licence is stated at cost less amortisation. Amortisation is
provided over the two year term of the licence.
1.7 Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided
on all tangible fixed assets at rates calculated to write off the cost less estimated
residual value of each asset over its expected useful life, as follows:
Fixtures, fittings & equipment 33.33% Straight line
1.8 Deferred taxation
Deferred tax is provided in full on timing differences which result in an obligation
at the balance sheet date to pay more tax, or a right to pay less tax, at a future
date, at rates expected to apply when they crystallise based on current tax rates and
law. Timing differences arise from the inclusion of items of income and expenditure in
taxation computations in periods different from those in which they are included in
the accounts. Deferred tax is not provided on timing differences arising from the
revaluation of fixed assets where there is no commitment to sell the assets. Deferred
tax assets are recognised to the extent that it is regarded as more likely than not
that they will be recovered. Deferred tax assets and liabilities are not discounted.
GLOBAL GAMING TECHNOLOGIES PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 JULY 2006
2 Net trading margin
The net trading margin of the group for the year has been derived from its
principal activity wholly undertaken in the United Kingdom.
3 Operating loss 2006 2005
# #
Operating loss is stated after charging:
Amortisation of intangible assets 572,996 59,750
Depreciation of owned tangible assets 624 52
Auditors' remuneration 9,750 7,500
Impairment of goodwill (see note 10) 10,539,668 -
4 Directors' emoluments 2006 2005
# #
Aggregate emoluments 142,892 60,209
The 2005 costs include one month of ownership of the company's subsidary so the
figures are not directly comparable.
5 Employees
Number of employees
The average weekly number of employees during the year was:
2006 2005
Number Number
Production/ development 4 4
Administration 5 5
9 9
Employment costs
# #
Wages and salaries 416,469 105,499
Social security costs 12,736 12,575
429,205 118,074
As noted above, the 2005 costs only include one month of ownership of the
company's subsidary so the figures are not directly comparable.
GLOBAL GAMING TECHNOLOGIES PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 JULY 2006
6 Other income 2006 2005
# #
Interest receivable and similar income 13,977 13,392
7 Tax on loss on ordinary activities
# #
Current tax
Factors affecting the tax charge for the year
Loss on ordinary activities before taxation (11,903,660) (345,043)
Loss on ordinary activities before taxation (3,571,098) (65,558)
multiplied by standard rate of UK
corporation tax of 30.00% (2005: 19.00%)
Effects of:
Expenses not deductible for tax purposes 3,350,228 36,448
Depreciation for period in excess of 3,439 485
capital allowances
Consolidation adjustments - 10,878
Movement in tax losses 235,916 17,747
Share option provision adjustments (18,485) -
Current tax charge - -
The group has estimated losses of #2,044,726 (2005: #1,258,338) which are
available to carry forward against future trading profits. No provision has been
made for corporation tax on this basis.
8 Loss for the financial year
As permitted by section 230 of the Companies Act 1985, the holding company's
profit and loss account has not been included in these accounts. The loss for
the financial year is made up as follows:
2006 2005
# #
Holding company's loss for the financial year (12,069,974) (206,032)
9 Loss per share
The calculation of the basic loss per share is based on the loss of ordinary
activities after taxation of #11,903,660 and on a weighted average number of
186,808,822 Ordinary Shares in issue during the period.
There was no dilutive effect from the share options outstanding during the year.
GLOBAL GAMING TECHNOLOGIES PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 JULY 2006
10 Intangible fixed assets
Group
Goodwill Software Total
development
licence
# # #
Cost
At 1 August 2005 11,295,455 60,000 11,355,455
Adjustments (35,541) - (35,541)
At 31 July 2006 11,259,914 60,000 11,319,914
Amortisation
At 1 August 2005 57,250 50,000 107,250
Charge for year 562,996 10,000 572,996
Impairment 10,539,668 - 10,539,668
At 31 July 2006 11,159,914 60,000 11,219,914
Net book value
At 31 July 2006 100,000 - 100,000
At 31 July 2005 11,238,205 10,000 11,248,205
The goodwill brought forward arose on the acquisition of Event Data Correlation
Limited on 27 June 2005.
The adjustment relates to VAT on professional fees incurred in respect of the
acquisition of Event Data Correlation Limited which was recovered in the year.
The directors have undertaken an impairment review of the goodwill arising on the
acquisition of Event Data Correlation Limited due to the lack of significant
trading in the year and the continuing losses incurred. As a result an impairment
provision of #10,539,668 has been recorded in the financial statements. Based on
their review, the directors consider that the remaining value represents the
recoverable amount of the goodwill at 31 July 2006.
GLOBAL GAMING TECHNOLOGIES PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 JULY 2006
11 Tangible fixed assets
Group
Fixtures,
fittings &
equipment
#
Cost
At 1 August 2005 2,000
Disposals (2,000)
At 31 July 2006 -
Depreciation
At 1 August 2005 156
On disposals (780)
Charge for the year 624
At 31 July 2006 -
Net book value
At 31 July 2006 -
At 31 July 2005 1,844
GLOBAL GAMING TECHNOLOGIES PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 JULY 2006
12 Fixed Asset Investments
Company
Shares in
subsidiary
undertaking
#
Cost
At 1 August 2005 10,989,540
Adjustment (see note 10) (35,541)
Impairment (10,853,999)
At 31 July 2006 100,000
At 31 July 2005 10,989,540
Holdings of more than 20%
The company holds more than 20% of the share capital of the following companies:
Company Country of registration Class Shares held %
or incorporation
Subsidiary undertakings
Event Data Correlation Limited United Kingdom Ordinary 100
The principal activity of these undertakings for the last relevant financial year was as
follows:
Principal activity
Event Data Correlation Limited Software development to exploit real-time statistical
data in the online sports betting markets
As a result of the impairment review undertaken in the year, which is referred to in Note
10, the directors consider that the carrying value of the investment in Event Data
Correlation Limited has been impaired and consequently the carrying value has been written
down to #100,000, which the directors consider to be the recoverable amount of the
investment at 31 July 2006.
13 Debtors
Group Company
2006 2005 2006 2005
# # # #
Trade debtors 6,275 16,285 - -
Amounts owed by group undertakings - - - 1,075,640
Other debtors 10,459 24,714 4,999 20,362
Prepayments and accrued income 7,065 14,743 6,667 14,400
23,799 55,742 11,666 1,110,402
GLOBAL GAMING TECHNOLOGIES PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 JULY 2006
14 Creditors : amounts falling due within one year
Group Company
2006 2005 2006 2005
# # # #
Trade creditors 54,238 22,244 33,402 2,322
Taxes and social security costs 10,714 22,418 282 -
Other creditors 573 - - -
Accruals and deferred income 24,512 70,730 14,582 17,632
90,037 115,392 48,266 19,954
15 Provisions for liabilities
Deferred tax is calculated at 19% over the following
timing differences:
Group
2006 2005
# #
Accelerated capital allowances 1,339 (1,870)
Short term timing differences 80,885 -
Tax losses available 613,418 239,084
695,642 237,214
Company
2006 2005
# #
Tax losses available 32,795 2,910
Deferred tax assets of #695,642 (2005: #237,214 - group) and #32,795 (2005:
#2,910 - company) have not been recognised in these accounts because there is
insufficient certainty over their recoverability.
16 Financial Instruments
The group's financial instruments arise directly from its operations. The group does
not operate in foreign currencies and is not directly exposed to foreign exchange
risk, or interest rate risk.
The directors consider that there is no significant difference between the book value
and fair value of the group's financial assets and liabilities.
GLOBAL GAMING TECHNOLOGIES PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 JULY 2006
17 Share capital 2006 2005
# #
Authorised
4,000,000,000 Ordinary Shares of .25p each 10,000,000 10,000,000
Allotted, called up and fully paid
188,669,301 (2005: 186,058,334) Ordinary Shares of 471,673 465,146
.25p each
At 1 August 2005, 12,980,257 share options were outstanding. These share
options replaced equivalent options which had been granted to directors and
certain employees in Event Data Correlation Limited on 27 June 2005, when the
company issued its own shares in return for shares in that company. The options
are exercisable at .25p per Ordinary Share up to 3 March 2015. The options vest
in three-monthly tranches. Exercise of the options is not subject to
performance criteria.
Because of the difference in the par values of the original Event Data
Correlation Limited shares, and the Global Gaming Technologies Plc shares, the
exercise of each of the options now comprises the issue of Global Gaming
Technologies Plc option shares at par to the value of the subscription price
that would have been payable had the option holder exercised the options over
Event Data Correlation Limited shares, supplemented by the issue of additional
bonus shares by application of part of the share premium account of Global
Gaming Technologies Plc on a non-pre-emptive basis.
During the year options were satisfied by the issue of 84,000 shares at par and
the bonus issue of a further 2,526,967 shares.
During the period 5,644,675 of the share options have lapsed and 2,610,967 have
been exercised at .25p, leaving 4,724,615 outstanding at 31 July 2006.
GLOBAL GAMING TECHNOLOGIES PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 JULY 2006
18 Statement of movements on reserves
Group and Group and Group Company
company company
Share Merger Profit and Profit and
premium reserve loss account loss account
account
# # # #
Balance at 1 August 2005 1,370,990 10,397,916 (293,075) (154,064)
Retained loss for the year - - (11,903,660) (12,069,974)
Share option charge adjustment - - 53,176 53,176
Premium on shares issued during (6,317) - - -
the year
Transfer - (10,397,916) 10,397,916 10,397,916
Balance at 31 July 2006 1,364,673 - (1,745,643) (1,772,946)
The merger reserve arose on the issue of 134,166,667 shares in return for the entire
issued share capital of Event Data Correlation Limited. Under s131 of the Companies
Act 1985 the company is exempt from the requirement to establish a statutory share
premium account to reflect to excess of the value received for these share above
their nominal value, the amount has however been recognised in this non-statutory
reserve.
The transfer from the merger reserve to the profit and loss reserve represents the
utilisation of the merger reserve which arises as a result of the write down of the
goodwill for the group, and the investment for the company, which originally arose on
the acquisition of Event Data Correlation Limited as described in notes 10 and 12.
19 Reconciliation of movements in shareholders' funds 2006 2005
Group # #
Loss for the financial period (11,903,660) (345,043)
New share capital subscribed 210 1,500,719
Shares issued as consideration for subsidiary - 10,733,333
Share option charge adjustment 53,176 51,968
Net (depletion in)/addition to shareholders' funds (11,850,274) 11,940,977
Opening shareholders' funds 11,940,977 -
Closing shareholders' funds 90,703 11,940,977
GLOBAL GAMING TECHNOLOGIES PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 JULY 2006
20 Net cash outflow from operating activities 2006 2005
# #
Reconciliation to operating loss:
Operating loss (11,917,637) (358,435)
Depreciation of tangible fixed assets 624 52
Amortisation of intangible fixed assets 572,996 59,750
Impairment 10,539,668 -
Share option charge 53,176 51,968
Profit on disposal of tangible fixed assets 840 -
Decrease/(increase) in debtors 31,943 (30,117)
Decrease in creditors (25,355) (257,433)
(743,745) (534,215)
21 Transactions with directors
#35,585 (2005: #4,839) is included in other operating income in the year
relating to the group provision of office services and sale of equipment to
Sweet China plc, a company registered in England and Wales and a business in
which C. Cleverly is also a director. At 31 July 2006 #5,828 (2005: #2,843)
was owed to the group by Sweet China plc.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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