Preliminary results 6 months to 30 June 2009
August 25 2009 - 2:10AM
UK Regulatory
TIDMLNG
RNS Number : 9345X
Leisure & Gaming plc
25 August 2009
25 August 2009
Leisure & Gaming plc
Unaudited interim results for the six months ended 30 June 2009
Leisure & Gaming plc ("L&G" or "the Group"), the online betting and gaming
group, today announces its unaudited interim results for the six months to 30
June 2009.
Financial highlights
* Amounts wagered up by 52% to EUR61.0m (2008: EUR40.2m) (see note below).
* Net win up by 17% to EUR13.9m (2008: EUR11.5m).
* Overall net win margin down to 22.8% (2008: 28.6%).
* Gross profit up to EUR4.0m (2008: EUR3.4m).
* Overheads stable at EUR2.1m (2008: EUR2.0m).
* EBIT up to EUR1.9m (2008: EUR1.4m).
* Diluted earnings per share up to 1.6c (2008: 1.5c).
* Net cash position improved to EUR2.4 (2008:EUR0.2m).
Accounting convention defines amounts wagered as sports betting volume, casino
and skill games net win and poker rake. The figure of amounts wagered in the
table above includes poker tournament fees which our customers have joined
instead of poker rake, as we believe this more clearly shows the level of
business generated by the Group.
Key business performance indicators
* Average number of active Italian "partners" in the six months was 520 (2008:
474).
* Cypriot partner network grew to 49 (2008:26).
* Greek online business grew from EUR4.7m to EUR9.0m.
* Poker gross tournament fees now account for nearly half of Italian business
volume.
* Focused approach to generate profits with a lower level of risk.
* Sponsorship deal with Serie A team Palermo announced.
Richard Creed, CEO of Leisure & Gaming plc said:
"Results for the first half showed good growth from last year and
diversification both in terms of geography, in Cyprus and online in Greece and
in terms of products with the launch of poker in Italy.
The enormous success of poker in Italy provides more secure earnings, albeit at
a lower margin than in sports betting and higher than expected volumes have
continued through the summer months.
We approach the new soccer season in good shape with a stable partner network
and sponsorship initiatives generating interest.
The capital reorganisation was approved by the Companies Court on 2 June 2009
and registered at Companies House on 14 July 2009, when it became effective. The
adjustment to reserves, which takes effect in the second half of the year, is
shown as an addendum to the Statement of Changes in Equity.
Current trading since 1 July, in the seasonally quiet third quarter, is ahead of
management's expectations with poker continuing at higher levels than expected
and as such, the Group is currently confident as regards trading in the second
half of the year."
For further information, please contact:
Richard Creed, Leisure & Gaming plc
Tel 020 8545 2190
Billy Clegg/Caroline Stewart, Financial Dynamics
Tel 020 7831 3113
Charles Cunningham/Rose Herbert, FinnCap
Tel 020 7600 1658
FINANCIAL RESULTS
6 months ended 30 June 2009
In total, the volume generated on all our products for the six months to 30th
June 2009 was EUR80.6m (2008: EUR59.4m), earning net win of EUR13.9m (2008: EUR11.5m).
Amounts wagered on sports betting, including horses, were EUR37.2m (2008: EUR39.3m),
generating a net win of EUR9.4m (2008: EUR10.6m) at a net win percentage of 25.3%
(2008: 26.9%).
Amounts played on casino products were EUR19.1m (2008: EUR18.7m), generating net win
of EUR0.6m (2008: EUR0.6m).
Amounts played on lotto and skill games were EUR1.4m (2008: EUR1.4m), generating net
win of EUR0.3m (2008: EUR0.3m).
In the period, the tournament fees for poker generated EUR22.9m with gross rake
earned of EUR3.6m.
Other income comprised advertising revenue generated on our results web site,
www.goalslive.com.
The cost of sales was EUR10.2m (2008: EUR8.2m) which includes commissions payable to
our partner network, betting duties, IT software provider commissions, bonuses
given to customers and the cost of processing payments to and from customers.
Administrative expenses were EUR2.1m (2008: EUR2.0m) which include salaries of EUR0.7m
(2008:EUR0.8m), IT hosting and servicing costs of EUR0.6m (2008:EUR0.5m), risk
management costs of EUR0.3m (2008: EUR0.2m) and legal and professional fees of EUR0.1m
(2008:EUR0.2m). The other costs of EUR0.4m (2008: EUR0.4m) represent rent of premises,
telephone, insurance, depreciation and other operational costs.
In this period the cost was not affected by exchange gains or losses (2008: gain
of EUR0.1m included within other costs).
The balance sheet shows fixed assets movements from 1 January 2009 as follows:
* Property, plant and equipment increasing by EUR0.1m in respect of web site
development of Goalslive, against which depreciation of EUR0.1m was charged.
* The goodwill book value increased due to the movement in exchange rates.
* Other intangible assets comprise the gaming licences and software development of
our proprietary betting software which increased by EUR0.1m through the ongoing
development.
Cash in escrow is held by Monte dei Paschi di Siena Bank ("MPS") in support of
guarantees issued to the Italian Government for gaming licences. Discussions are
taking place with AAMS to reduce the amount held in escrow and with MPS and
other financial institutions to finance the guarantee with less than a 100% cash
backing.
The net cash position was comprised of the
+------------------+----------+----------+----------+
| | 30 June | 30 June | 31 |
| | 2009 | 2008 | December |
| | EURm | EURm | 2008 |
| | | | EURm |
+------------------+----------+----------+----------+
| Bank borrowings | (1.0) | (1.6) | (1.2) |
+------------------+----------+----------+----------+
| Client funds | (0.5) | (1.0) | (2.3) |
+------------------+----------+----------+----------+
| Total | (1.5) | (2.6) | (3.5) |
+------------------+----------+----------+----------+
| Cash at bank | 1.7 | 0.6 | 1.5 |
+------------------+----------+----------+----------+
| Cash held in | 2.2 | 2.2 | 2.2 |
| escrow | | | |
+------------------+----------+----------+----------+
| Total | 3.9 | 2.8 | 3.7 |
+------------------+----------+----------+----------+
| Net cash | 2.4 | 0.2 | 0.2 |
| position | | | |
+------------------+----------+----------+----------+
Taxation
The Group overprovided for tax at 31 December 2008 by EUR0.2m and estimates a tax
charge of 30% should be applicable in future periods.
As at 31 December 2008, the Group has UK trading losses of EUR3.3m and capital
losses of EUR35.4m available to set off against future UK profits and capital
gains respectively. The availability of any future relief from these tax losses
does not expire.
Dividend
Having completed the capital reorganisation, the Directors have considered the
declaration and payment of a dividend and intend to announce a dividend policy
in the near future. The matters that remain unresolved which may affect the cash
reserves of the Group are:
* Release of guarantees (cash held in escrow on the balance sheet), which is being
renegotiated with AAMS and various Banks;
* Further guarantees which may be needed in respect of casino products when they
are permitted in Italy;
* Costs of completion of the software development of the proprietary betting
software;
* Costs of planned geographic expansion.
The Directors are assessing the effect of these items on cash flow and the
payment of a dividend.
Investigation of Employee Benefit Trust
Following a request from shareholders at the Company's 2009 Annual General
Meeting, a review of the establishment and allocation of shares made by the
Employee Benefit Trust which holds 7m ordinary shares, has been commissioned
from Mishcon de Reya.
Board
We are planning to strengthen our Board in the near future with the appointment
of a further non executive Director. We are well progressed with our search for
a new Chairman who will take over from Philip Parker, when, as previously
announced, he steps down at the end of the year.
REVIEW OF OPERATIONS
Overall strategy
The Group continues to seek to diversify activities both geographically and in
terms of products, moving from more volatile sports betting, to the provision of
online games.
Geographically, in the 6 months to 30 June, the volume of business generated in
Cyprus increased from EUR1.7m in 2008 to EUR6.2m in 2009 and online in Greece from
EUR4.7m in 2008 to EUR9.0m in 2009.
In terms of diversification of products, the introduction of poker in Italy
resulted in half the Italian betting and gaming volume deriving from poker in
2009 as opposed to 96% of betting being on sports in 2008.
Sports betting
The amounts wagered on sports betting, including horses, in the 6 month period
was EUR37.2m (2008:EUR39.3m). The two contributory factors to the decline are that
customers in Italy decided to spend part of their funds on poker tournaments
rather than betting on sports events. In 2008, the Euro competition attracted
EUR2.5m volune in bets and generated a net win of EUR0.6m.
In the 6 months to 30 June 2009, the number of sports bets placed by customers
was 3.1m (2008:3.9m) at an average bets size of EUR10.9 (2008: EUR9.6). This
reflects the larger bet size of Cypriot and Greek customers. 72% of bets were
multiples, being over two propositions as compared to 76% in 2008.
The majority of bets were placed on soccer and covered the major European
leagues, with a preference for the Italian leagues, followed by English,
Spanish, French and German matches in order of preference.
Betting on horse races amounted to EUR1.6m (2008:EUR1.9m) with fewer horse racing
events in Italy contributing to the reduction.
The net win margin of 25.3% (2008: 26.9%) was achieved despite well publicised
lower margins in May as a result of the majority of favourites winning across
the European football leagues at the end of their seasons.
Online casino
The volume of business in the online casino products remained static at EUR19.1m
in plays (2008 EUR18.7m). In 2008, the Acropolis casino contributed EUR6.2m in
plays. The acroplis casino was closed at the end of 2008 and this business has
been replaced by the development of the online Greek offering.
Casino products are not permitted in the Italian market at present, however, the
Italian Regulator, AAMS, have srongly indicated that they will be passing
regulations by the end of the year to permit casino products.
Online lotto and skill games
This offering is mainly in Italy and the amounts played remained constant at
EUR1.4m (2008: EUR1.4m) with a net win of EUR0.3m (2008: EUR0.3m). The Group has
recently been selected to distribute Superenallotto and with the current
sizeable jackpot prize, is generating considerable interest from both partners
and customers.
Poker
The growth of poker in Italy since the launch in November 2008, has fuelled an
increase in customers and the amount spent by customers. In the 6 months to 30
June 2009, over 6,000 players spent EUR22.9m in joining tournaments. This
generated a gross rake of EUR3.6m.
The poker offering has attracted a regular and loyal customer base that enjoys
the chat facilities as well as the numerous tournaments.
Italy
The number of partners increased to 520, with fewer moving because of the costs
and general disruption of transferring between operators.
Our marketing thrust for new customers in Italy focuses on football clubs and
particularly the Palermo sponsorship deal signed in April. A wide variety of
activities are planned involving the fans and supporters, in stadium activites
on match days, the players and with our partners throughout Italy.
Cyprus
We have increased the number of partners to 49, (2008:26) and continue to look
at opportunities to grow the group.
Greece
The online offering in Greece has attracted just over 3,000 customers and
generated over EUR9m in activity (2008:EUR4.7m), particularly through the Gold Chip
Lounge suite of casino products. We await clarity on the consent to land based
operations and have reached an agrement with a local partner to open a
significant number of outlets as soon as permitted.
Further geographic expansion
We continue to monitor progress in a number of countries and are in early stage
discussions to create further partner networks.
Regulatory developments
The Italian Regulator, AAMS, has indicated that further gaming products will be
permitted, in particular casino games.
The Group has commenced discussions on clarifying its position with regard to
gaming activities undertaken by former subsidiary companies in the US between
June 2005 and October 2006.
OUTLOOK
Current trading since 1 July, in the seasonally quiet third quarter, is ahead of
management's expectations with poker continuing at higher levels than expected
and as such, the Group is currently confident as regards trading in the second
half of the year.
Condensed Consolidated Income Statement
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | Unaudited | Unaudited | | Audited |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | 6 months | 6 months | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | ended | ended | | Year ended |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | 30 June 2009 | 30 June | | 31 Dec 2008 |
| | | | 2008 | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | Notes | EURm | EURm | | EURm |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Amounts wagered | 6 | 41.7 | 40.2 | | 76.9 |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Net win | 6 | 13.9 | 11.5 | | 20.6 |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Other income | | 0.3 | 0.1 | | 0.9 |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Net win and other income | | 14.2 | 11.6 | | 21.5 |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Cost of sales | 6 | (10.2) | (8.2) | | (15.3) |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Gross profit | 6 | 4.0 | 3.4 | | 6.2 |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Impairment charge | | - | - | | (0.2) |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Administrative expenses | | (2.1) | (2.0) | | (4.5) |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Operating profit/(loss) | | 1.9 | 1.4 | | 1.5 |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Net interest | | (0.1) | (0.1) | | (0.2) |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Profit /(Loss) before tax | | 1.8 | 1.3 | | 1.3 |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Tax | | (0.3) | 0.0 | | (0.7) |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Profit / (Loss) for the period | | 1.5 | 1.3 | | 0.6 |
| attributable to equity holders | | | | | |
| of the parent | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Earnings per share (cents) | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| Basic and diluted | 7 | 1.6c | 1.5c | | 0.7c |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
| | | | | | |
+----------------------------------+-------+--------------+-------------+--+-------------+
Amounts staked do not represent the Group's statutory revenue and comprises the
total amount staked by customers on sports and horse betting and the net win on
gaming activities.
Condensed Consolidated Balance Sheet
+--------------------------------+-------+-------------+--------------+--+------------+
| | | Unaudited | Unaudited | | Audited |
+--------------------------------+-------+-------------+--------------+--+------------+
| | | 30 June | 30 June 2008 | | 31 Dec |
| | | 2009 | | | 2008 |
+--------------------------------+-------+-------------+--------------+--+------------+
| | Notes | EURm | EURm | | EURm |
+--------------------------------+-------+-------------+--------------+--+------------+
| ASSETS | | | | | |
+--------------------------------+-------+-------------+--------------+--+------------+
| Non-current assets | | | | | |
+--------------------------------+-------+-------------+--------------+--+------------+
| Property, plant and equipment | | 0.2 | 0.1 | | 0.2 |
+--------------------------------+-------+-------------+--------------+--+------------+
| Goodwill | 8 | 15.9 | 17.4 | | 13.9 |
+--------------------------------+-------+-------------+--------------+--+------------+
| Other intangibles | | 1.9 | 2.1 | | 1.9 |
+--------------------------------+-------+-------------+--------------+--+------------+
| | | 18.0 | 19.6 | | 16.0 |
+--------------------------------+-------+-------------+--------------+--+------------+
| Current assets | | | | | |
+--------------------------------+-------+-------------+--------------+--+------------+
| Trade and other receivables | | 0.6 | 1.3 | | 2.0 |
+--------------------------------+-------+-------------+--------------+--+------------+
| Cash held in escrow | | 2.2 | 2.2 | | 2.2 |
+--------------------------------+-------+-------------+--------------+--+------------+
| Cash and cash equivalents | | 1.7 | 0.6 | | 1.5 |
+--------------------------------+-------+-------------+--------------+--+------------+
| | | 4.5 | 4.1 | | 5.7 |
+--------------------------------+-------+-------------+--------------+--+------------+
| | | | | | |
+--------------------------------+-------+-------------+--------------+--+------------+
| Total assets | | 22.5 | 23.7 | | 21.7 |
+--------------------------------+-------+-------------+--------------+--+------------+
| | | | | | |
+--------------------------------+-------+-------------+--------------+--+------------+
| LIABILITIES | | | | | |
+--------------------------------+-------+-------------+--------------+--+------------+
| Current liabilities | | | | | |
+--------------------------------+-------+-------------+--------------+--+------------+
| Borrowings | | (1.0) | (1.6) | | (1.2) |
+--------------------------------+-------+-------------+--------------+--+------------+
| Trade and other payables | | (1.8) | (2.1) | | (2.3) |
+--------------------------------+-------+-------------+--------------+--+------------+
| Deferred income | | (1.1) | (1.4) | | (1.1) |
+--------------------------------+-------+-------------+--------------+--+------------+
| Client funds | | (0.5) | (1.0) | | (2.3) |
+--------------------------------+-------+-------------+--------------+--+------------+
| Loan notes | | (0.3) | (0.5) | | (0.4) |
+--------------------------------+-------+-------------+--------------+--+------------+
| Current tax liabilities | | (0.5) | - | | (0.6) |
+--------------------------------+-------+-------------+--------------+--+------------+
| | | | | | |
+--------------------------------+-------+-------------+--------------+--+------------+
| | | (5.2) | (6.6) | | (7.9) |
+--------------------------------+-------+-------------+--------------+--+------------+
| | | | | | |
+--------------------------------+-------+-------------+--------------+--+------------+
| Net Assets | | 17.3 | 17.1 | | 13.8 |
+--------------------------------+-------+-------------+--------------+--+------------+
| | | | | | |
+--------------------------------+-------+-------------+--------------+--+------------+
| EQUITY | | | | | |
+--------------------------------+-------+-------------+--------------+--+------------+
| Share capital | | 27.6 | 27.1 | | 27.6 |
+--------------------------------+-------+-------------+--------------+--+------------+
| Share premium | | 77.7 | 77.6 | | 77.7 |
+--------------------------------+-------+-------------+--------------+--+------------+
| Share option reserve | | 0.6 | 0.6 | | 0.6 |
+--------------------------------+-------+-------------+--------------+--+------------+
| Shares to be issued | | 0.6 | 0.6 | | 0.6 |
+--------------------------------+-------+-------------+--------------+--+------------+
| Foreign exchange reserve | | (9.5) | (8.3) | | (11.5) |
+--------------------------------+-------+-------------+--------------+--+------------+
| Retained earnings | | (79.7) | (80.5) | | (81.2) |
+--------------------------------+-------+-------------+--------------+--+------------+
| Equity attributable to equity | | 17.3 | 17.1 | | 13.8 |
| holders of the parent | | | | | |
+--------------------------------+-------+-------------+--------------+--+------------+
Consolidated Statement of Changes in Equity
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| | Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Unaudited |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| | Share | Share | Share | Shares | Foreign | Retained | Total |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| | Capital | Premium | Option | to be | exchange | earnings | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| | | | Reserve | issued | reserve | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| | EURm | EURm | EURm | EURm | EURm | EURm | EURm |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Balance as at 1 | 27.1 | 77.6 | 0.6 | 0.6 | (7.4) | (81.8) | 16.7 |
| January 2008 | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Foreign exchange | - | - | - | - | (0.9) | - | (0.9) |
| movements | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Net gains/(Losses) | - | - | - | - | (0.9) | - | (0.9) |
| recognised directly | | | | | | | |
| in equity | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Profit for the period | - | - | - | - | - | 1.3 | 1.3 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Total recognised | - | - | - | - | - | - | 0.4 |
| income and expenses | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Balance as at 30 June | 27.1 | 77.6 | 0.6 | 0.6 | (8.3) | (80.5) | 17.1 |
| 2008 | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Foreign exchange | - | - | - | - | (3.2) | - | (3.2) |
| movements | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Net gains/(Losses) | - | - | - | - | (3.2) | - | (3.2) |
| recognised directly | | | | | | | |
| in equity | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Loss for the period | - | - | - | - | - | (0.7) | (0.7) |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Total recognised | - | - | - | - | (3.2) | (0.7) | (3.9) |
| income and expenses | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Issue of ordinary | 0.5 | 0.1 | | | | | |
| shares | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Balance as at 31 | 27.6 | 77.7 | 0.6 | 0.6 | (11.5) | (81.2) | 13.8 |
| December 2008 | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Foreign exchange | - | - | - | - | 2.0 | - | 2.0 |
| movements | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Net gains/(Losses) | - | - | - | - | 2.0 | - | 2.0 |
| recognised directly | | | | | | | |
| in equity | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Profit for the period | - | - | - | - | - | 1.6 | 1.6 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Total recognised | - | - | - | - | 2.0 | 1.6 | 3.6 |
| income and expenses | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Balance as at 30 June | 27.6 | 77.7 | 0.6 | 0.6 | (9.5) | (79.6) | 17.4 |
| 2009 | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| FOR INFORMATION | | | | | | | |
| PURPOSES ONLY | | | | | | | |
| | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Reorganisation of | (14.3) | (67.8) | - | - | | 82.1 | |
| capital | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
| Revised balances | 13.3 | 9.9 | 0.6 | 0.6 | (9.5) | 2.5 | 17.4 |
| following | | | | | | | |
| reorganization of | | | | | | | |
| capital effective | | | | | | | |
| subsequent to 30 June | | | | | | | |
| 2009 | | | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+-----------+-----------+
Condensed Consolidated Cashflow Statements
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| | | Unaudited | Unaudited | | Audited |
+----------------------------------------+-------+----------------+---------------+--+---------------+
| | | 6 months | 6 months | | |
+----------------------------------------+-------+----------------+---------------+--+---------------+
| | | ended | ended | | Year ended |
+----------------------------------------+-------+----------------+---------------+--+---------------+
| | | 30 June | 30 June | | 31 Dec 2008 |
+----------------------------------------+-------+----------------+---------------+--+---------------+
| | | 2009 | 2008 | | Total |
+----------------------------------------+-------+----------------+---------------+--+---------------+
| | | EURm | EURm | EURm | EURm | | EURm | EURm |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Profit/(Loss) before tax | | | 1.8 | | 1.3 | | | 1.3 |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Adjustments for: | | | | | | | | |
| | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Amortisation | | | 0.2 | | 0.2 | | | 0.3 |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Impairment of intangible assets | | | - | | - | | | 0.2 |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Foreign exchange loss | | | - | | - | | | 0.4 |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Interest expense | | | 0.1 | | 0.1 | | | 0.2 |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Decrease/ (Increase) in trade and | | | 1.4 | | (0.5) | | | (1.2) |
| other receivables | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| (Decrease) / Increase in trade and | | | (0.5) | | (0.1) | | | 0.1 |
| other payables | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| (Decrease) / Increase in deferred | | | - | | (0.4) | | | (0.7) |
| income | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| (Decrease) / Increase in client funds | | | (1.8) | | (0.1) | | | 1.2 |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Cash generated from operating | | | 1.2 | | 0.5 | | | 1.8 |
| activities | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Tax paid | | | (0.2) | | (0.2) | | | (0.3) |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Net cash from operating activities | | | 1.0 | | 0.3 | | | 1.5 |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Investing activities | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Purchases of intangible assets | | (0.1) | | (0.1) | | | (0.4) | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Purchases of property, plant and | | (0.1) | | - | | | (0.1) | |
| equipment | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Net cash used in investing activities | | | (0.2) | | (0.1) | | | (0.5) |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Financing activities | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Proceeds from issue of ordinary shares | | - | | - | | | 0.6 | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Proceeds from new loan | | - | | - | | | 0.2 | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Repayment of bank loan | | (0.2) | | (0.1) | | | (0.7) | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Repayment of loan note | | (0.1) | | - | | | - | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Net interest received / (paid) | | (0.1) | | (0.1) | | | (0.2) | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Net cash from financing activities | | | (0.4) | | (0.2) | | | (0.1) |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Net increase in cash and cash | | | 0.2 | | 0 | | | 0.9 |
| equivalents | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Cash and cash equivalents at beginning | | | 1.5 | | 0.6 | | | 0.6 |
| of period | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
| Cash and cash equivalents at end of | | | 1.7 | | 0.6 | | | 1.5 |
| period | | | | | | | | |
+----------------------------------------+-------+-------+--------+-------+-------+--+-------+-------+
Notes to the condensed financial information
1. Basis of preparation
The form and content of the interim report comply 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 year ended 31 December 2008
on which the auditors gave their unqualified report and did not contain a
statement under Sec 237 (2) or (3) of the Companies Act 1985.
The annual report and accounts for the year ended 31 December 2008 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.
2. Going concern
The Directors have considered the detailed business projections to 31 December
2010 and general business expectations into the foreseeable future.
The achievement of the projections is dependent on two main assumptions:
* Achieving the volume of business which assumes the present portfolio of shops
and partners, and
* Achieving forecast margins which, for sports' betting is highly dependent on the
outcome of sporting fixtures. In view of the diversification of the business both in terms of geography and
products which are not dependent on the outcome of events, the Directors
consider the business is more stable and forecasting is more accurate, and they
consider the going concern basis is appropriate.
3. Foreign currency
The interim financial statements are presented in Euro (EUR), which is the Group's
functional and presentational currency.
4. 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 2008. 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 relate to the impairment reviews of goodwill.
5. Seasonality of results
The results are affected by the timing of the European football seasons,
particularly the Italian leagues, where the fourth quarter of every year is
seasonally the busiest, followed by the first quarter. The third quarter is the
least busy as it includes the football off season, however the introduction of
poker in November 2008, has provided a product that is played through the summer
months.
6. Segmental information
The Directors review the business activities by products offered.
+------------------------------------+------------+-------------+-------------+
| | Unaudited | Unaudited | Audited |
+------------------------------------+------------+-------------+-------------+
| Amounts wagered | 6 months | 6 months | Year ended |
| | ended 30 | ended 30 | 31 December |
| | June 2009. | June 2008. | 2008. |
+------------------------------------+------------+-------------+-------------+
| | EURm | EURm | EURm |
+------------------------------------+------------+-------------+-------------+
| Sports book | 35.6 | 37.4 | 71.3 |
+------------------------------------+------------+-------------+-------------+
| Horses | 1.6 | 1.9 | 3.1 |
+------------------------------------+------------+-------------+-------------+
| Casino | 0.6 | 0.6 | 1.3 |
+------------------------------------+------------+-------------+-------------+
| Lotto and skill games | 0.3 | 0.3 | 0.7 |
+------------------------------------+------------+-------------+-------------+
| Poker | 3.6 | | 0.5 |
+------------------------------------+------------+-------------+-------------+
| | 41.7 | 40.2 | 76.9 |
+------------------------------------+------------+-------------+-------------+
+------------------------------------+-------------+------------+--------------+
| Net win, other income and gross | 6 months | 6 months | Year ended |
| profit | ended 30 | ended 30 | 31 December |
| | June 2009. | June 2008. | 2008. |
+------------------------------------+-------------+------------+--------------+
| | EURm | EURm | EURm |
+------------------------------------+-------------+------------+--------------+
| Sports book | 8.9 | 10.0 | 17.1 |
+------------------------------------+-------------+------------+--------------+
| Horses | 0.5 | 0.6 | 1.0 |
+------------------------------------+-------------+------------+--------------+
| Casino | 0.6 | 0.6 | 1.3 |
+------------------------------------+-------------+------------+--------------+
| Lotto and skill games | 0.3 | 0.3 | 0.7 |
+------------------------------------+-------------+------------+--------------+
| Poker | 3.6 | | 0.5 |
+------------------------------------+-------------+------------+--------------+
| | 13.9 | 11.5 | 20.6 |
+------------------------------------+-------------+------------+--------------+
| Other income | 0.3 | 0.1 | 0.9 |
+------------------------------------+-------------+------------+--------------+
| Total income | 14.2 | 11.6 | 21.5 |
+------------------------------------+-------------+------------+--------------+
| Cost of sales (mainly commissions | (10.2) | (8.2) | (15.3) |
| and duties) | | | |
+------------------------------------+-------------+------------+--------------+
| Gross profit | 4.0 | 3.4 | 6.2 |
+------------------------------------+-------------+------------+--------------+
7. Earnings per share
+------------------------------------+-------------+------------+-------------+
| | Unaudited | Unaudited | Audited |
+------------------------------------+-------------+------------+-------------+
| | 6 months | 6 months | Year ended |
| | ended 30 | ended 30 | 31 December |
| | June 2009. | June 2008. | 2008. |
+------------------------------------+-------------+------------+-------------+
| Profit / (Loss) attributable to | EUR1.5m | EUR1.3m | EUR0.6m |
| equity holders of the Company | | | |
+------------------------------------+-------------+------------+-------------+
| Weighted average number of | 94,122,692 | 84,906,692 | 89,340,451 |
| ordinary shares | | | |
+------------------------------------+-------------+------------+-------------+
| Basic and diluted earnings per | 1.6c | 1.5c | 0.7c |
| share | | | |
+------------------------------------+-------------+------------+-------------+
8. Goodwill
+--------------------------------------------------------+------------------+
| At cost or valuation | EURm |
+--------------------------------------------------------+------------------+
| At 1 January 2008 | 21.1 |
+--------------------------------------------------------+------------------+
| Foreign exchange movement | (1.3) |
+--------------------------------------------------------+------------------+
| At 30 June 2008 | 19.8 |
+--------------------------------------------------------+------------------+
| Foreign exchange movement | (3.5) |
+--------------------------------------------------------+------------------+
| At 31 December 2008 | 16.3 |
+--------------------------------------------------------+------------------+
| Foreign exchange movement | 2.0 |
+--------------------------------------------------------+------------------+
| At 30 June 2009 | 18.3 |
+--------------------------------------------------------+------------------+
+--------------------------------------------------------+------------------+
| Impairment | EURm |
+--------------------------------------------------------+------------------+
| At 1 January 2008, 30 June 2008, 31 December 2008 and | 2.4 |
| 30 June 2009 | |
+--------------------------------------------------------+------------------+
+--------------------------------------------------------+------------------+
| Net book value | EURm |
+--------------------------------------------------------+------------------+
| At 30 June 2008 | 17.4 |
+--------------------------------------------------------+------------------+
| At 31 December 2008 | 13.9 |
+--------------------------------------------------------+------------------+
| At 30 June 2009 | 15.9 |
+--------------------------------------------------------+------------------+
9. Subsequent events
The capital reorganisation was approved by the Companies Court on 2 June 2009
and registered at Companies House on 14 July 2009, when it became effective. The
adjustment to reserves is shown in the Statement of Changes in Equity.
Under the terms of the purchase of the Betshop Group from Gabriel Chaleplis, the
Group retained 306,955 ordinary shares from the consideration pending any claims
under the warranties and indemnities. Following two annual audits, the Group has
confirmed that it has no claims and will be issuing these share on 1 October.
The shares are recorded as "Shares to be issued "under the Equity and reserves
in the balance sheet.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR IFFELTEISFIA
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