Report on Interim Results
October 18 2007 - 12:05PM
UK Regulatory
RNS Number:9794F
Leisure & Gaming plc
18 October 2007
18 October 2007
Leisure & Gaming plc
Report on Interim Results for the six months ended 30 June 2007
Leisure & Gaming plc ("L&G" or "the Company"), the online betting and gaming
group, announced its interim results for the six months to 30 June 2007 on 27
September 2007. At the time the Company was considered to be in an offer period
under the City Code on Takeovers and Mergers ("the Code") and was required under
Rule 28 of the Code to report upon any profit forecast or estimate, which
includes any unaudited interim or preliminary figures. The Company today
re-releases the Company's interim results which have been subject to a review by
the Company's auditors.
The Company has taken the decision that, given the performance of its subsidiary
Betshop Group Europe Limited in the first six months of the year, that the 2007
earn-out target for this business is unlikely to be met and have accordingly
released the associated provision of Euro6.0m. This released provision is the only
material change to the unaudited interim results that the Company announced on
27 September 2007.
For further information, please contact:
Henry Birch, Chief Executive, Leisure & Gaming plc
Tel: 020 8150 5718
Jonathon Brill/Billy Clegg, Financial Dynamics
Tel: 020 7831 3113
William Vandyk, Blue Oar Securities
Tel: 020 7448 4400
Condensed Consolidated Income Statement
6 months 6 months Year ended
ended ended 31 Dec
30 June 30 June
2007 2006 2006
Notes Eurom Eurom Eurom
Gross takings 65.4 3.2 58.8
Net win 13.9 1.1 14.3
Other income 0.2 - 0.1
14.1 1.1 14.4
Cost of sales (12.9) (1.2) (12.8)
Gross profit / (loss) 1.2 (0.1) 1.6
Share option charge - (0.7) (0.4)
Exceptional restructuring costs - - (2.8)
Impairment of goodwill - - (2.9)
Other administrative expenses (2.6) (1.9) (5.4)
Operating (loss) (1.4) (2.7) (9.9)
Net interest and similar income / (costs) (0.1) 0.3 (0.4)
(Loss) before tax (1.5) (2.4) (10.3)
Tax 0.6 - (0.2)
(Loss) from continuing operations (0.9) (2.4) (10.5)
Profit (loss) attributable to - 7.8 (72.4)
discontinued
operations
(Loss) / Profit for the period (0.9) 5.4 (82.9)
attributable to
equity holders of the parent
Earnings per share (cents)
Basic (1.2c) 8.8c (132.1c)
Diluted (1.2c) 8.6c (132.1c)
From continuing operations
Basic (1.2c) (4.0c) (16.6c)
Diluted (1.2c) (4.0c) (16.6c)
Condensed Consolidated Income Statement* - with pro forma comparatives
6 months Pro forma* Pro forma*
ended 6 months Year ended
30 June 2007 ended 31 Dec 2006
30 June 2006
Notes Eurom Eurom Eurom
Gross takings 65.4 37.4 95.5
Net win 13.9 9.6 23.3
Other income 0.2 0.1 0.2
14.1 9.7 23.5
Cost of sales (12.9) (8.0) (20.0)
Gross profit 1.2 1.7 3.5
Share option charge - (0.7) (0.4)
Exceptional restructuring costs - - (2.8)
Impairment of goodwill - - (2.9)
Other administrative expenses (2.6) (3.8) (7.3)
Operating (loss) (1.4) (2.8) (9.9)
Net interest and similar income / (costs) (0.1) 0.3 (0.4)
(Loss) before tax (1.5) (2.5) (10.3)
Tax 0.6 - (0.2)
(Loss) from continuing operations (0.9) (2.5) (10.5)
* the pro forma income statement shows 2006 as though Betshop were acquired
on 1 January 2006. In the period from 1 January 2006 to the date of
acquisition Betshop incurred a net loss of Euros 0.1 million which increases
the reported losses from continuing operations for the comparative periods.
Thus the pro forma continuing operations includes Betshop, Grouse and
Leisure & Gaming central costs. These proformas have not been subject to
review.
Condensed Consolidated Balance Sheet
30 June 2007 30 June 2006 31 Dec 2006
Notes Eurom Eurom Eurom
ASSETS
Non-current assets
Property, plant and 0.1 1.0 0.1
equipment
Goodwill 3 25.1 117.6 31.2
Other intangibles 2.0 6.0 0.2
27.2 124.6 31.5
Current assets
Trade and other receivables 2.5 9.3 1.9
Cash and cash equivalents 2.6 28.9 4.9
5.1 38.2 6.8
Total assets 32.3 162.8 38.3
LIABILITIES
Current liabilities
Borrowings 4 (1.4) (8.0) (1.8)
Trade and other payables (4.6) (23.1) (5.2)
Client funds (1.2) - (1.2)
Loan notes (0.5) - -
Current tax liabilities (0.2) (0.6) (0.3)
(7.9) (31.7) (8.5)
Non-current liabilities
Deferred and contingent 5 (4.8) (17.1) (10.8)
consideration
Borrowings 4 - (6.5) (0.5)
Loan notes - - (0.5)
(4.8) (23.6) (11.8)
Total liabilities (12.7) (55.3) (20.3)
Net Assets 19.6 107.5 18.0
EQUITY
Share capital 6 27.1 23.3 23.4
Share premium 77.6 76.2 76.2
Share option reserve 0.5 1.7 0.5
Shares to be issued 0.6 3.0 3.2
Foreign exchange (5.6) (5.8) (5.6)
transalation
Retained earnings (80.6) 9.1 (79.7)
Equity attributable to 19.6 107.5 18.0
equity holders of the parent
Condensed Consolidated Statement of Changes in Equity
Share Share Share Shares to Foreign Retained Total
Capital Premium Option be issued exchange earnings
Reserve translation
Eurom Eurom Eurom Eurom Eurom Eurom Eurom
Balance as at 31 December 2005 21.6 67.8 - 3.8 (0.2) 4.7 97.7
Profit for the period - - - - 5.4 5.4
Foreign exchange movements - - - - (5.6) - (5.6)
Total recognised income and - - - - (5.6) 5.4 (0.2)
expense
Issue of ordinary shares 1.7 8.4 - (1.5) - - 8.6
Share option charge - - 1.7 - - (1.0) 0.7
Future issue of ordinary shares - - - 0.7 - - 0.7
Net change directly in equity 1.7 8.4 1.7 (0.8) - (1.0) 10.0
Balance as at 30 June 2006 23.3 76.2 1.7 3.0 (5.8) 9.1 107.5
Loss for the period - - - - - (88.3) (88.3)
Foreign exchange movements - - - - 0.2 - 0.2
Total recognised income and - - - - 0.2 (88.3) (88.1)
expense
Issue of ordinary shares 0.1 - - - - - 0.1
Release from future share issue - - - (2.4) - - (2.4)
commitments
Share option charge - - (1.2) - - 0.9 (0.3)
Fair value adjustment to - - - - - (1.4) (1.4)
management incentive shares
Future issue of ordinary shares - - - 2.6 - - 2.6
Net change directly in equity 0.1 - (1.2) 0.2 - (0.5) (1.4)
Balance as at 31 December 2006 23.4 76.2 0.5 3.2 (5.6) (79.7) 18.0
Loss for the period - - - - - (0.9) (0.9)
Foreign exchange movements - - - - - - -
Total recognised income and - - - - - (0.9) (0.9)
expense
Issue of ordinary shares 3.7 1.6 - (2.6) - - 2.7
Costs attributable to share - (0.2) - - - - (0.2)
issue
Net change directly in equity 3.7 1.4 - (2.6) - - 2.5
Balance as at 30 June 2007 27.1 77.6 0.5 0.6 (5.6) (80.6) 19.6
Condensed Consolidated Cashflow Statements
Year ended
6 months ended 6 months ended 31 Dec 2006
30 June 2007 30 June 2006 Total
Notes Eurom Eurom Eurom Eurom Eurom Eurom
Operating (loss) / profit - continuing (1.4) (2.7) (9.9)
Adjustments for:
Profit atributable to discontinued - 7.8 -
operations
Decrease / (Increase) in trade and other 0.1 0.3 6.7
receivables
(Decrease) / Increase in trade and other (0.7) (1.0) 1.3
payables
Impairment of investment in subsidiary - - 2.8
Management incentive shares - - 1.3
Other costs settled in shares - - 0.2
Depreciation and amortisation 0.1 0.6 0.1
Share option charge - 0.7 0.4
Net cash from operating activities (1.9) 5.7 2.9
Tax paid (0.1) (0.1) (0.3)
Investing activities
Purchases of subsidiary undertakings (net of - (8.7) (8.7)
cash acquired)
Settlement of deferred consideration - (1.1) (4.2)
Sale of US facing businesses (net of cash - - (4.8)
disposed)
Purchases of intangible assets (1.8) (2.5) (2.9)
Purchases of property, plant and equipment - (0.1) (0.2)
Net cash used in investing activities (1.8) (12.4) (20.8)
Financing activities
Proceeds from issue of ordinary shares 2.5 - -
Bank loan - 14.8 16.8
Repayment of bank loan (0.9) (14.4)
Net interest paid (0.1) - (0.2)
Net cash from financing activities 1.5 14.8 2.2
Cash and cash equivalents at beginning of 4.9 20.9 20.9
period
Cash and cash equivalents at end of period 2.6 28.9 4.9
Notes to the condensed financial information
1. Summary of significant accounting policies
Basis of preparation
The form and content of the interim report complies with the requirements of IAS
34.
Unless stated otherwise the interim financial statements are unaudited and do
not comprise full financial statements within the meaning of the Companies Act
1985.
The interim financial statements have been prepared using policies consistent
with those in the annual report and accounts for the period ended 31 December
2006 on which the auditors gave an unqualified report and did not contain a
statement under Sec 237 (2) or (3) of the Companies Act 1985. However, the
report of the auditor drew attention to the ability of the Group to continue as
a going concern and the related uncertainties.
The following standards and interpretations are effective for the first time or
the financial year ending 31 December 2007 and have been adopted by the Group
with no significant impact on its consolidated results or financial position for
the period:
* IFRS 7 - Financial instruments: disclosures (effective for annual periods
beginning on or after 1 January 2007).
* IFRIC 7 - Applying the restatement approach under lAS 29 - Financial
reporting in hyperinflationary economies (effective for annual periods
beginning on or after 1 March 2006).
* IFRIC 8 - Scope of IFRS 2 - Accounting for share-based payments
(effective for annual periods beginning on or after 1 May 2006).
* IFRIC 9 - Reassessment of embedded derivatives (effective for annual periods
beginning on or after 1 June 2006).
* IFRIC 10 - Interim financial reporting and impairment (effective for annual
periods beginning on or after 1 November 2006).
The following standards and interpretations are not yet extant and have not been
adopted by the Group; however, it is not considered that these standards and
interpretations will have a material impact on the reported results.
* IFRS 8 - Operating segments (effective for annual periods beginning on or
after 1 January 2009).
* IFRIC 11 - Group and treasury share transactions (effective for annual
periods beginning on or after 1 March 2007).
* IFRIC 12 - Service concession arrangements (effective for annual periods
beginning on or after 1 January 2008).
The annual report and accounts for the period ended 31 December 2006 have been
delivered to Companies House and copies are available on-line at www.lngplc.com
or by post from the Company's registered office.
The financial statements have been prepared on the historical cost basis.
Going concern
The Directors have considered the business projections for the coming 12 months.
In the context of significant revenue growth of its main subsidiary in 2007,
current trading and external funding available to the Group, the Directors
consider that the going concern basis of accounting is appropriate.
The achievement of the projections is dependent on the Group achieving forecast
net win and gross profit, and expected levels of gross takings. The margins are
dependent on the outcome of sporting fixtures, which by their nature are
uncertain.
Presentational currency
The presentational currency adopted for the interim financial statements is
Euros; previously the presentational currency adopted was US dollars. Prior to
the disposal of the US facing businesses in 2006, the majority of the Group's
income, expenditure and assets and liabilities were US dollar denominated and
thus the US dollar was adopted as the presentational currency. The majority of
the Group's income, expenditure and assets and liabilities are now Euro
denominated and therefore the presentational currency has been changed to the
Euro.
Key assumptions and estimations
There have been no changes in estimation techniques adopted in preparing the
interim financial statements as compared to the financial statements for the
year ended 31 December 2006. The key assumptions and estimations that could have
a material impact on the carrying value of the Group's assets and liabilities in
future accounting periods are those relating to contingent consideration payable
in respect of past acquisitions and those relating to the impairment reviews of
goodwill.
Seasonality of results
The results are effected by the timing of the Italian football season, such that
40% of the Group's annual revenues are expected to be achieved in the first six
months of the financial year, and 60% in the second six months.
Cash and cash equivalents
Cash and cash equivalents, including amounts held in escrow are carried at cost.
For the purposes of the statement of cash flows, cash and cash equivalents
comprise balances less than 90 days to maturity from the date of acquisition and
include cash on hand, current account balances and amounts at call with banks
and other unrestricted short-term deposits with original maturities of three
months or less. Cash and cash equivalents also include bank deposits held in
escrow.
Gross takings
Gross takings represent the total amount placed by the customers in respect of
bets on sports events, the net amount held by the house for casino products and
commission (rake) taken from poker.
Net win
Net win represents the net amount won (or lost) by the house in respect to bets
placed on sports events, the net amount held by the house for casino products
and commission (rake) taken from poker.
Note 2
Segmental information - continuing operations
Net win
6 months ended 6 months ended Year ended
30 June 2007 30 June 2006 31 Dec 2006
Eurom Eurom Eurom
Sports book 10.9 0.3 11.6
Horses 1.3 0.1 0.9
Gaming 1.7 0.7 1.8
13.9 1.1 14.3
Other income 0.2 0.0 0.1
14.1 1.1 14.4
6 months ended 6 months ended Year ended
30 June 2007 30 June 2006 31 De 2006
Eurom Eurom Eurom
Gross profit
Sports book 0.2 0 0.5
Horses 0.2 0 0.8
Gaming 0.8 -0.1 0.3
1.2 -0.1 1.6
Central admininstration costs -2.4 -0.7 -3.7
Impairment of goodwill (gaming) 0.0 0.0 -2.9
Operating profit of segments -1.2 -0.8 -5.0
Share option charge 0.0 -0.7 -0.4
Exceptional restructuring costs 0.0 0.0 -2.8
Unallocated central costs -0.2 -1.2 -1.7
-1.4 -2.7 -9.9
It is not possible to allocate the assets and liabilities of the Group between
the differing business segments as all activities are run on common systems and
use common wallets. Similarly, any allocation of central administrattion costs
would be arbitary.
Note 3
Goodwill
Eurom
At cost
At 31 December 2005 90.1
Additions 30.5
Further acquisition costs 0.5
Foreign exchange movements (3.5)
At 30 June 2006 117.6
Disposals (81.3)
Foreign exchange movements (2.2)
At 31 December 2006 34.1
Release of 2007 earnout (6.0)
Foreign exchange movements (0.1)
At 30 June 2007 28.0
Impairment
Eurom
At 31 December 2005 -
At 30 June 2006 -
Impairment in period (2.9)
At 31 December 2006 (2.9)
At 30 June 2007 (2.9)
Net book value at 30 June 2006 117.6
Net book value at 31 December 2006 31.2
Net book value at 30 June 2007 25.1
Given the performance of the Betshop business in the first half of the year, the
Directors believe it unlikely that the 2007 earnout targets will be met. As a
result of this the 2007 earnout provision has been released.
Note 4
Borrowings
30 June 2007 30 June 2006 31 Dec 2006
Eurom Eurom Eurom
Current liabilities 1.4 8.0 1.8
Non-current liabilities - 6.5 0.5
1.4 14.5 2.3
In November 2006 the Company negotiated a $3 million loan facility with Barclays
Bank plc. The loan is fully repayable by 31 March 2008.
Loan repayments were made on 31 December 2006, 31 March 2007 and 30 June 2007.
Note 5
Deferred and contingent liabilities
30 June 2007 30 June 2006 31 Dec 2006
Eurom Eurom Eurom
Non-current liabilities 4.8 17.1 10.8
Given the performance of the Betshop business in the first half of the year, the
Directors believe it unlikely that the 2007 earnout targets will be met. As a
result of this the 2007 earnout provision (Euro6.0 million) has been released.
Note 6
Share Capital
As at As at As at
30 June 2007 30 June 2006 31 December 2006
Authorised: No. Eurom No. Eurom No. Eurom
Ordinary shares 714,219,392 52.7 - - - -
of 5p each
Ordinary shares 0 0.0 100,000,000 36.9 100,000,000 36.9
of 25p each
Deferred shares 71,445,152 21.1 - - - -
of 20p each
By special resolution passed on 30 May 2007, the ordinary shares of 25 pence
each were subdivided into 5p ordinary shares and 20p deferred shares. The
deferred shares do not entitle the holder to any dividends and, on a return of
capital, the holders are entitled to the nominal value of the shares only after
each ordinary shareholder has received #1 million per share. On 30 May 2007,
the authorised share capital was also increased from #25 million (Euros 36.9
million) to #50 million (Euros 73.7 million).
No. Eurom
Alloted, issued and fully paid:
As at 31 December 2005 59,332,689 21.6
Deferred consideration to vendors of English 798,950 0.3
Harbour
Issued to vendors of BSG 3,788,639 1.4
As at 30 June 2006 63,920,278 23.3
Exercise of option 24,874 0.0
Issued to brokers in settlement of inviuced fees 500,000 0.1
As at 31 December 2006 64,445,152 23.4
Management incentive shares 7,000,000 2.7
Placing on AIM - 13 June 13,461,540 1.0
As at 30 June 2007 84,906,692 27.1
The management incentive shares were issued to the employee benefit trust; no
proceeds were received and the expense was booked in the year ended 31 December
2006.
The placing on AIM was at 13 pence per share cash.
INDEPENDENT REVIEW REPORT TO LEISURE AND GAMING PLC
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the interim financial report for the six months ended 30 June 2007
which comprises the condensed consolidated income statement, the condensed
consolidated balance sheet, the condensed consolidated statement of changes in
equity, the condensed consolidated cash flow statement and the related notes. We
have read the other information contained in the interim financial report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
This report, including the conclusion, has been prepared for and only for the
Company for the purpose of meeting the requirements of the AIM Rules for
Companies and for no other purpose. We do not, therefore, in producing this
report, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Directors' Responsibilities
The interim financial report, is the responsibility of, and has been approved by
the directors. The directors are responsible for preparing and presenting the
interim financial report in accordance with the AIM Rules for Companies.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with International Financial Reporting Standards and
International Financial Reporting Interpretations Committee ("IFRIC")
pronouncements as adopted by the European Union. The condensed set of financial
statements included in this interim financial report has been prepared in
accordance with International Accounting Standard 34, "Interim Financial
Reporting" as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the interim financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the interim financial report
for the six months ended 30 June 2007 is not prepared, in all material respects,
in accordance with International Accounting Standard 34 as adopted by the
European Union, and the AIM Rules for Companies.
Emphasis of matter - going concern
In forming our review conclusion, which is not qualified, we have considered the
adequacy of, and draw attention to, the disclosures made in note 1 to the
condensed financial information concerning the ability of the Group to continue
as a going concern and the related uncertainties.
Baker Tilly UK Audit LLP
Chartered Accountants
2 Bloomsbury Street
London
WC1B 3ST
18 October 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCEVLFFDBBEFBQ
Leisure & Gaming (LSE:LNG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Leisure & Gaming (LSE:LNG)
Historical Stock Chart
From Jul 2023 to Jul 2024
