TIDMLNG
RNS Number : 6031K
Leisure & Gaming plc
22 April 2010
Leisure & Gaming plc
("L&G" the "Company" or the "Group")
Unaudited preliminary results for the year ended 31 December 2009
Leisure & Gaming plc (AIM:LNG) the European betting and gaming group, today
announces its unaudited preliminary results for the year ended 31 December 2009.
Financial highlights
· Amounts staked EUR81.1m (2008: EUR76.9m)
· Net win EUR24.7m (2008: EUR20.6m)
· Net win margin 30.5% (2008: 26.8%)
· Gross profit EUR6.8m (2008: EUR6.2m)
· Operating profit before interest, foreign exchange (loss)/gain, tax and
depreciation & amortisation EUR2.5m (2008: EUR1.5m)
· Cash held at banks, excluding borrowings, EUR1.6m (2008: EUR1.5m)
· Cash held as security for guarantees for Italian licenses EUR1.6m (2008:
EUR2.2m)
Operational Highlights
· Italian active partner network increased by 45 to 529 (2008: 484).
· Cyprus partner network increased to 49 (2008:47)
· Betshop poker has gained 13,500 customers since launch in November 2008
· New Greek online marketing partner appointed
· Expanded call centre capacity securing hub in Reggio, Calabria
· Continued development of proprietary IT platform for the B2B market
Richard Creed, CEO of Leisure & Gaming plc, commented: "Figures published by the
Italian regulator show that the Italian gaming market is growing by 20%. In
addition, the imminent regulation of casino and cash poker games, (announced by
the Italian regulator to occur in July 2010) is expected to provide significant
growth opportunities.
The Group continues to diversify its product offerings in order to reduce its
dependence on sports betting. The development of our B2B offering, using
proprietary betting software, is generating many leads and the fees earned
through the use of existing assets will serve to reduce the risks associated
with sports betting.
We are also looking at expanding into other European markets and continue to
monitor opportunities. Going forward the Group aims to enhance its position as a
major European gaming operator and views 2010 as a year of investment, the
benefits of which are expected from 2011 onwards."
Enquiries:
+----------------------------------+--------------------------------------+
| Leisure & Gaming plc | Tel: 020 8545 2190 |
+----------------------------------+--------------------------------------+
| Richard Creed | |
+----------------------------------+--------------------------------------+
| | |
+----------------------------------+--------------------------------------+
| FinnCap (Nominated adviser and | Tel: 020 7600 1658 |
| broker) | |
+----------------------------------+--------------------------------------+
| Geoff Nash (Corporate Finance) | |
+----------------------------------+--------------------------------------+
| Charlotte Stranner (Corporate | |
| Finance) | |
+----------------------------------+--------------------------------------+
| Simon Starr (Corporate Broking) | |
+----------------------------------+--------------------------------------+
| | |
+----------------------------------+--------------------------------------+
| Walbrook PR (Financial Public | Tel: 020 7933 8780 |
| Relations) | |
+----------------------------------+--------------------------------------+
| Paul McManus | Mob: 07980 541 893 or |
| | paul.mcmanus@walbrookpr.com |
+----------------------------------+--------------------------------------+
| Bob Huxford | Mob: 07747 635 908 or |
| | bob.huxford@walbrookpr.com |
+----------------------------------+--------------------------------------+
CHAIRMAN'S STATEMENT
Since joining the L&G board in September 2009 I have taken the opportunity to
review the business and discuss strategies with the senior management. The
over-riding impression I have gained from these visits is the enthusiasm and
commitment of everyone, they all want to do well. Much of the credit for this
positivity is down to Gabriel Chaleplis, the founder of Betshop, the trading
subsidiary of the Group. Not only has he built up a loyal and dedicated team,
but he has also built up both a profitable business and a wide number of
contacts in the markets in which we operate. It is a testament to him that the
relationships which he developed in the early days of Betshop remain
cornerstones of the business. Assisting Gabriel is Richard Creed, the CEO of the
Group, who in 2009 not only had to focus on the day to day operations of the
business and the strategy to further grow the business in a sound and controlled
manner, but he has also had to deal with a number of legacy issues; these issues
are discussed in more detail later in this statement. I thank both men, and the
rest of the team, for tackling their many tasks with determination and in a
positive manner.
In terms of financial performance, 2009 was a successful year with increases
being recorded in both turnover and profits over the previous financial year. To
highlight the progress of the Group over the last three years, we show below the
gross profit and operating profit before impairment for the financial years 2007
to 2009:
+-----------------------+----------+----------+----------+
| | 2009 | 2008 | 2007 |
| | EUR'm | EUR'm | EUR'm |
+-----------------------+----------+----------+----------+
| | | | |
+-----------------------+----------+----------+----------+
| Gross profit | 6.8 | 6.2 | 3.5 |
+-----------------------+----------+----------+----------+
| Operating profit | 2.1 | 1.2 | (1.7) |
| before impairment | | | |
+-----------------------+----------+----------+----------+
Profits would have been enhanced in 2009 if bad weather in Italy had not
disrupted the football fixtures in Serie A & B at the end of the financial year
and costs had not been incurred in dealing with legacy issues. It is worth
pointing out that our results from sports betting fluctuate from week to week,
bad weather or not, but over the longer term we can calculate within reasonable
parameters our average net win margin from sports betting.
In contrast to the short-term variations we see in our net win margins on sports
betting, the earnings from other gaming products in particular poker, provide us
with a constant income stream each week.
The combination of sports betting and skill games is attractive to many of our
customers. Looking ahead we are seeking to leverage our expertise in these
areas in our chosen markets to provide a range of B2B services which will
generate fee income. This strategy to reduce our exposure to the fluctuating
returns from sports betting is requiring continuing investment, and as a result
we are not proposing a dividend for the financial year 2009. Further details on
investment to date and proposed is set out in the Chief Executive's report.
Turning to legacy issues: as requested by shareholders at the 2009 Annual
General Meeting, the directors put in motion a review of the issue of 7million
shares to the Employee Benefit Trust and the subsequent allocation of shares by
the Employee Benefit Trust. There are currently some 6.4million shares held by
the Trustee of the Employee Benefit Trust. It is no doubt frustrating for
shareholders to read many months later that the investigations are continuing. I
can reassure shareholders that the investigation is being carried out in a
methodical and diligent manner. The process has taken longer than expected,
primarily due to the need to obtain a considerable number of documents from a
variety of third parties.
Based on the evidence and legal advice obtained by the Company to date, it is
anticipated that the Company will make an application to Court to seek
rectification of its register in respect of the shares currently held by the
Trustee. We have had to devote a considerable amount of time and resources to
this serious issue, and we intend to continue to devote time and resources until
we can resolve the matter in a satisfactory manner.
With regard to the American-facing subsidiary companies ("American
subsidiaries") which were sold and completely separated from the Group prior to
the passing of the UIGEA in October 2006, the Group has taken a proactive
approach to dealing with the US Department of Justice. A considerable amount of
time and energy was expended in the latter part of 2009 in producing files which
summarised the legal and financial advice taken prior to these acquisitions,
their operations and subsequent disposal of the American subsidiaries, we
therefore have a fuller picture of what happened before the current board was in
place and we are now in a position where we do not need to expend energies on
further fact finding. We remain hopeful that we can reach an agreement with the
US Department of Justice which will provide us clarity on this matter
It is disappointing to report that we have been recently named in legal
proceedings with other defendants, in the United States in connection with a
purported breach of patented web software used by the American Subsidiaries sold
in October 2006. L&G has never used this software, it is not included in the
current software used in Europe; in the opinion of the Board any claims lie
solely with the purchasers of these businesses.
Looking forward, we are excited about the future because we believe we can
leverage on what we perceive to be our strengths:
- Our entrepreneurial spirit, we can react very quickly to any changes of
circumstances, an important attribute in the fast-changing world of online and
land-based betting and gaming opportunities.
- The quality of our partner and agency networks.
- The in-depth knowledge we have built up in the markets that we operate.
- The experience we have of operating both sports-betting and skill games
activities.
With the above-mentioned strengths and with the investment that we are
expending, we anticipate that we can achieve a step change in our financial
performance going forward but it would be remiss of us to highlight only the
possible rewards. Industry and other risks that we face include:
- Regulatory: a characteristic of land-based and online gambling is that
the legislation which governs these activities continues to evolve as
governments attempt to achieve a balance between making legal gambling an
attractive proposition to both operators and customers and at the same time
achieving a reasonable return for the state with suitable consumer protections.
As mentioned above, we can react quickly to any changes required by governments.
- Systems: we now live in a digital age where customers expect an instant
response to their requirements. Competition to provide gambling services to
customers in all the markets we operate in is fierce and notwithstanding the
loyalty of our partner and agent network, we need to continue to focus on making
our expanding systems adaptable, robust and compliant with future requirements.
This is one of the priorities for the current financial year.
- Cash: the last two years of profitable trading has allowed us to invest
in our plans to bring on stream lower margin but more predictable earnings. We
are still of a size where weekly sports betting margins impact on our free cash
float. We will therefore have to balance our aspirations with ensuring that the
current business can operate with a margin of safety.
- People: one of major strengths is the longevity of our relationships
with key individuals in the land based and online gambling industry principally
in Italy, Greece and Cyprus. It is important to create similar relationships in
new markets and with product suppliers.
The relationship between risk and reward has improved over the last 24 months, a
period where L&G has demonstrated that it can trade profitably during a period
of worldwide recession.
We are now looking to build on what we have achieved in the recent past; the key
individuals are excited about the future. One of the tasks of the non-executives
this year will be to ensure that management are appropriately incentivised to
achieve significant and sustained improvements in the underlying financial
performance of the Group and that there is a strong alignment between the
interests of shareholders and management.
We look to make continued progress in the coming year.
Colin Eastaugh
Interim Chairman
22nd April 2010
CHIEF EXECUTIVE'S REVIEW
The diversification of the Group's business, in terms of geographic coverage and
additional products, showed significant progress in 2009 and remains a key
objective. This progress is shown by:
· Cyprus, Greece and other EU countries contributing 38.2% of amounts
staked on sports in 2009 as compared with 24.5% in 2008;
· Other products, particularly poker, contributing 33.2% of net win in 2009
in comparison with 12.1% of total net win in 2008.
This strategy reduces the risks of relying on any one geographic market or
product while taking advantage of growth opportunities and utilising the
technology and business capabilities of the Group.
Our business model of offering land based and online services ("bricks and
clicks") is complimentary because the land based operations supply customer
loyalty and visibility, whilst the online activities allow for volume and a
lower cost base. When coupled with our proprietary betting software and our
growing reputation for good service, this has led us to introduce a Business to
Business ("B2B") offering which we believe will further enhance our growth.
We have experienced solidly increasing profits in 2009 against a backdrop of a
difficult wider economic environment. In addition, the Italian gaming market,
still the main geographic location of the Group's business, has developed during
this time into a well regulated and operated gaming environment which is now
recognised as a leading example to other European countries.
To capitalise further on the increasing growth opportunities we are seeing in
the European gaming market we have invested into securing the ownership of a
call centre and server hub in Reggio, Calabria, and have expanded our risk
management centre in Cyprus to provide additional call centre capacity. We have
also continued to make significant investment into adapting our proprietary
betting software for the white label (B2B) market.
Geographic review
Italy
The Group's largest market is Italy where Betshopitalia srl, its wholly owned
Italian subsidiary company, operates a network of partners offering betting and
gaming products under various licenses. These licences are issued by the Italian
Regulator, AAMS ("Administrazione Autonoma dei Monopoli di Stato") to registered
customers in Italy, where 5% betting duties are paid monthly based on turnover.
This network averaged 529 active partners in 2009 (2008: 484). An active partner
is deemed to have undertaken business in the last month and we believe the
number of active partners better reflects the size of our customer base than the
absolute number of customers, some of which may not be conducting business.
During the summer months, many partners close their businesses for holidays, and
the number of active partners, excluding the off season running from May to
August, was 554 (2008: 498). The Group has over 118,000 registered customers but
the software does not allow for the number of active customers to be accessed
without considerable manual analysis.
In 2009, 80% of the amounts staked on sports arose from 21% of the current
partners. Of these partners, 66% have been with the Group for longer than 2
years, which demonstrates the loyalty and stability of the network.
In addition, the Betshopitalia brand has become recognised and respected and has
an excellent reputation for prompt payment, good service and reliability.
Betshop poker has established a growing following of regular customers and it is
estimated that it now has over 13,500 regular players. Of these, 11,500 players
are also active in sports betting, but importantly, 2,000 are pure poker
players, all of which were recruited following the launch of the Group's play
for money poker tournaments in November 2008. Whilst poker activity has reduced
sports betting volumes, poker tournament fees provide stable income, albeit at a
lower margin. This has resulted in more predictable results and greater
stability.
In September 2009, online Superenalotto sub licenses were granted to ten
companies and the Group has been successful in securing one of these sub
licenses.
Casino products and poker cash games are expected to be permitted in the summer
of 2010 in accordance with the June 2009 decree which set out plans to raise
further funds to reconstruct the Abruzzo region following the disaster created
by the earthquakes. The Group is ready to provide these further offerings to
existing and new customers.
Regulations covering the introduction of bingo games have also been passed and
the Group is in discussion with providers to supply the game to customers.
Cyprus
The Cyprus network of 49 partners (2008: 47) has traded profitably in the year
and its increasingly efficient operations form a good base for future growth.
The Group intends to expand the network in 2010.
The risk management function of the Group is undertaken from Cyprus where the
odds are compiled and amended as necessary for every market. We are looking to
expand this operation with live betting. We will also be taking additional call
centre facilities to cater for calls for the B2B operations, which are operated
by our licensed Malta subsidiary.
Greece
This business is purely online as land based gaming operations are not regulated
with the exception of the state monopoly, OPAP. In this initial phase the Group
has promoted the Betshop name to gain both credibility and a good reputation
before launching the second phase in 2010 which includes marketing to generate
further customers.
The Group is now working with a local marketing partner who is contracted to
grow the betting volumes by a minimum of 25%. Despite the well publicised
economic problems in the country, gaming is very popular in Greece and the Group
believes that this market will significantly increase income.
The Group is prepared for land based operations when they become regulated.
Goalslive
The Goalslive website, www.goalslive.com, contains full results and league
tables for over 12 seasons. Our in-house research has shown that users
appreciate the simplicity of the lay out and accessibility of this service.
Options to improve the structure of the site and incorporate live sports content
have recently been considered. However, with advertising rates at a low level,
the Group's cost/benefit study has shown this development to be uneconomic at
the present time. The Group will continue to monitor the feasibility of
undertaking this work and continue to use the website as a customer acquisition
tool.
Product review
Sports betting
Sports betting in Italy accounted for the vast majority of the business of the
Group until November 2008, when play for money tournament poker was permitted in
Italy. In Italy, the growth of poker has been at the detriment of sports
betting, where about a third of our customers now play poker as well as bet on
sporting events.
Overall, the volume of sports betting generated by the Group was EUR70.2m (2008:
EUR71.3m) with the fall in Italy to EUR43.4m (2008: EUR53.9m) being compensated by
growth in Cyprus to EUR17.5m (2008: EUR14.6m) and Greece to EUR8.9m (2008: EUR2.5m).
It is also worth noting that our Italian customers spent EUR47.0m in the year
(2008: EUR2.7m) on joining poker tournaments.
The net win margin is dependent on the outcome of sports events and taken over a
lengthy period, they are stable, however, over short periods they can vary
significantly.
In 2009, the Group achieved a net win on its sports book of EUR15.6m (2008:
EUR17.1m) at a net win margin of 22.2% (2008: EUR24.0m). The slight drop in margin
is because margins are generally lower in the new territories (Cyprus and
particularly Greece) where betting patterns are different and more single bets
prevail.
Following an exceptional first quarter, where unexpected results of soccer
matches occurred frequently and a net win margin of 31.4% (2008: 27.2%) arose,
the second and quiet third quarter showed margins of around only 17%. However,
the fourth quarter margin reverted back to the annual average of 22%. This shows
the variable nature of sports margins.
Poker
The introduction of tournaments to Italian customers has been a success with
quarterly fees being EUR10.7m; EUR11.8m; EUR10.1m and EUR14.4m. After allowing for the
holiday period in July and August these results demonstrate steady growth.
Poker contributed EUR6.6m (2008: EUR0.5m) of net win or 27% (2008: 2%) of total net
win and continues to perform strongly, with cash games scheduled to be
introduced in 2010 bringing further gaming options.
Casino
Casino products are not yet permitted in Italy so the majority of the volume is
generated through Greek customers. In 2009, this amounted to EUR27.4m (2008:
EUR39.1m) earning a net win of EUR0.9m (2008: EUR1.3m). The drop in volume was due to
a change of casino offering and platform.
Online lotto and skill games
Lotto and skill games generated volumes of EUR2.7m (2008: EUR3.0m) earning a net win
of EUR0.7m (2008: EUR0.7m).The Group successfully tendered in late 2009, to
distribute Superannalotto products, where activity levels increase as the
jackpot becomes larger.
Regulatory position
The Group holds a variety of licenses in Italy covering the land based and
online operations and has lodged, in Italy, a guarantee of EUR2.2m from Monte dei
Paschi di Siena with AAMS of which EUR1.6m is backed by cash deposits.
Regular compliance checks and monitoring where every bet is passed through the
treasury arm, SOGEI, means this is well regulated and monitored industry.
The Group has recently obtained a gaming license in Malta to cover all other
online activities in Europe, where gaming activities are permitted.
Palermo sponsorship
The Group entered into a sponsorship agreement with Societa U.S. Citta di
Palermo S.p.A. ("Palermo") on 3 April 2009, which provided for sponsorship and
other marketing and advertising at Palermo football club for the 2009/10 season
and an option for 2010/11 season.
This agreement was terminated by the company in December 2009 when an
arbitration tribunal was officially formed. The first meeting at which documents
and evidence was exchanged was held on 1 March 2010.
A maximum liability of EUR300,000 would arise if the arbitration tribunal finds
against the company.
Outlook
Richard Creed, CEO of Leisure & Gaming plc, commented: "Figures published by the
Italian regulator show that the Italian gaming market is growing by 20%. In
addition, the imminent regulation of casino and cash poker games, (announced by
the Italian regulator to occur in July 2010) is expected to provide significant
growth opportunities.
The Group continues to diversify its product offerings in order to reduce its
dependence on sports betting. The development of our B2B offering, using
proprietary betting software, is generating many leads and the fees earned
through the use of existing assets will serve to reduce the risks associated
with sports betting.
We are also expanding into newly regulated Mediterranean markets and continue to
monitor opportunities. Going forward the Group aims to enhance its position as a
major European gaming operator and views 2010 as a year of investment, the
benefits of which are expected from 2011 onwards."
FINANCIAL REVIEW
Trading summary
In total, the amounts staked on all our products for the year to 31st December
2009 were EUR150.9m (2008: EUR119.2m), earning net win of EUR24.7m (2008: EUR20.6m)
generating an overall net win margin of 16.4% (2008: 17.3%). During the year the
company allocated poker pool repayments as cost of sales which was later
re-allocated to net win. This resulted in the net win and cost of sales being
understated in the quarterly regulatory announcements, but the gross profit is
unaffected.
Accounting convention dictates that turnover is stated in the accounts as
amounts staked on sports events and net win on other products and amounted to
EUR81.1m (2008: EUR76.9m).
Amounts staked on sports betting were EUR70.2m (2008: EUR71.3m), generating a net
win of EUR15.6m (2008: EUR17.1m), at a net win percentage of 22.2% (2008: 24.0%).
Amounts staked on horse betting were EUR2.7m (2008: EUR3.1m), generating a net win
of EUR0.9m (2008: EUR1.0m).
Amounts staked on casino products were EUR27.4m in plays (2008: EUR39.1m) generating
net win of EUR0.9m (2008: EUR1.3m).
Amounts staked on lotto and skill games were EUR2.7m (2008: EUR3.0m), generating net
win of EUR0.7m (2008: EUR0.7m).
The poker tournament fees generated EUR47.9m (2008: EUR2.7m), earning a gross rake
of EUR6.6m (2008: EUR0.5m).
Other income mainly comprised advertising revenue generated on our results web
site, www.goalslive.comand the release of the deferred income generated on
licences.
The cost of sales of EUR18.6m (2008: EUR15.3m) 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. The
increase in costs, as a percentage of net win, was mainly attributable to the
Greek market commission plans which are predominantly turnover based.
Administrative costs of EUR4.3m (2008: EUR4.7m) include salaries of EUR1.1m
(2008:EUR1.6m), IT hosting and servicing costs of EUR0.8m (2008:EUR1.0m), risk
management costs of EUR0.7m (2008: EUR0.5m) and legal & professional fees of EUR0.7m
(2008:EUR0.5m). Legal fees include the fees attributable to the capital
re-orgainsitaion, review of the Employee Benefit Trust and legal advice on US
matters of EUR0.2m. The other costs of EUR1.0m (2008: EUR1.1m) represent rent of
premises, telephone, insurance and other operational costs.
No impairment charge against the cost of the licenses was necessary this year
(2008: EUR0.2m).
The profit before interest, tax, amortisation, depreciation and foreign exchange
(loss)/gain was EUR2.5m (2008: EUR1.3m).
Depreciation and amortisation amounted to EUR0.4m (2008: EUR0.3m) and finance costs
including interest of EUR0.1m (2008:EUR0.2m) was paid to banks and on the loan note
and a foreign exchange loss of EUR0.2m (2008: gain EUR0.5m).
The profit before tax increased to EUR1.8m (2008: EUR1.3m)
Taxation
Taxation arises on the profits generated in Italy and losses elsewhere in the
Group are currently not relieveable against these taxable profits. Full
provision has been made for the tax in Italy of EUR0.8m (2008: EUR0.7m) .
The net profit attributable to shareholders was EUR1.0m (2008: EUR0.6m).
Earnings per share
There are 94,429,647 Ordinary shares in issue at 31 December 2009. The weighted
average number of shares in issue in 2009 was 94,200,061 (2008: 89,340,451)
Basic and diluted earnings per share were 1.1c (2008: 0.7c)
Balance sheet assets
The Group purchased the Betshop Group in June 2006 for a sterling (GBP)
consideration. At subsequent financial year ends, the purchase price was
translated into the reporting currency at the year end rate. Under IAS 21, the
transaction is now required to be accounted for at the exchange rate prevailing
at the date of the transaction which resulted in the goodwill book value
increasing by EUR5.7m in this financial year.
Property, plant and equipment increased by EUR0.5m mainly due to the purchase of
the office equipment in Reggio.
Other intangible assets comprise the gaming licences with a net book value of
EUR1.6m and the software development of EUR0.8m, which increased by EUR0.7m in 2009 as
a result of the continued development and enhancement of our gaming software
particularly for the B2B business platform.
Cash flow
+---------------------+---------------------+---------------------+
| | As at 31 December | As at 31 December |
| | 2009 | 2008 |
+---------------------+---------------------+---------------------+
| | EURm | EURm |
+---------------------+---------------------+---------------------+
| Cash and cash | 1.6 | 1.5 |
| equivalents | | |
+---------------------+---------------------+---------------------+
| Cash held as | 1.6 | 2.2 |
| security | | |
+---------------------+---------------------+---------------------+
| | 3.2 | 3.7 |
+---------------------+---------------------+---------------------+
| Bank borrowings | (0.9) | (1.2) |
+---------------------+---------------------+---------------------+
| Loan note | (0.3) | (0.4) |
+---------------------+---------------------+---------------------+
| Net client funds | (0.5) | (1.0) |
+---------------------+---------------------+---------------------+
| Net cash position | 1.5 | 1.1 |
+---------------------+---------------------+---------------------+
The Group successfully negotiated the release of EUR0.6m from the guarantees which
support the Italian gaming licenses and has spent the following significant
amounts in the year:-
· Property in Reggio Calabria - EUR0.3m
· Software development - EUR0.7m
· Loan repayments - EUR0.4m
· Advance tax payments for 2009 - EUR0.2m
The investment in premises was essential to secure the tenure of our Italian
call centre and services support office, particularly as the Group is investing
in the infrastructure of the building in terms of cabling for communications
equipment, Italian hosting servers and operational offices.
The software development will allow the Group to offer B2B business which
generates greater fee income and this is explained more fully in the Chief
Executive's review.
Looking at the current year (2010), the Group is faced with the following
discretionary expenditure:-
· Further guarantees in Italy to support the new casino offering which is
estimated to be EUR0.5m;
· If the Group chooses to offer online bingo products in Italy, guarantees
and set up costs will be involved and are estimated to be EUR0.4m;
· Costs of adding new markets;
In addition, the following known cash outflows are projected to be made in the
year:-
· Completion of the software development is forecast to cost EUR0.4m
· The loan repayments are scheduled to be EUR0.6m
Treasury management
The Group's treasury function controls the finance and management of liquidity,
foreign exchange and interest rates and seeks to reduce risk in accordance with
policies approved by the Board. It is not the policy of the Group to trade in or
enter into speculative transactions.
The Directors took the decision to transfer all borrowings, except the loan
note, into Euro which is the trading currency to match earnings with borrowings.
Equity and reserves
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.
The effect of this re-organisation was to reduce the share premium account by
EUR67.8m being the premiums associated with the purchases of businesses with US
customers that were sold in October 2006 and the cancellation of the deferred
shares which were created in May 2007 when the share capital was redesignated
into 5p ordinary shares and 20p deferred shares. These adjustments allowed for
the deficit on the retained earnings account to be eliminated.
On 1 October 2009, the Company issued 306,955 ordinary shares to Gabriel
Chaleplis. These shares were issued under the terms of the purchase agreement of
the Betshop Group where the Company retained 306,955 ordinary shares from the
consideration pending any claims under the warranties and indemnities. Following
two annual audits, the Company has confirmed that it has no claims and issued
the shares on 1 October 2009. The retained shares were recorded as "Shares to be
issued "under the Equity and reserves in the balance sheet and the adjustment
has released these shares to issued equity.
+------------------------------------------+--------+--------+----+--------+
| Leisure & Gaming plc |
| Unaudited Consolidated Statement of Comprehensive Income |
| Year ended 31 December 2009 |
+--------------------------------------------------------------------------+
| | | 2009 | | 2008 |
+------------------------------------------+--------+--------+----+--------+
| | | EURm | | EURm |
+------------------------------------------+--------+--------+----+--------+
| | | | | |
+------------------------------------------+--------+--------+----+--------+
| Amounts staked (see note below) | | 81.1 | | 76.9 |
+------------------------------------------+--------+--------+----+--------+
| | | | | |
+------------------------------------------+--------+--------+----+--------+
| Revenue | | | | |
+------------------------------------------+--------+--------+----+--------+
| Net win | | 24.7 | | 20.6 |
+------------------------------------------+--------+--------+----+--------+
| Other income | | 0.7 | | 0.9 |
+------------------------------------------+--------+--------+----+--------+
| | | | | |
+------------------------------------------+--------+--------+----+--------+
| | | 25.4 | | 21.5 |
+------------------------------------------+--------+--------+----+--------+
| Cost of sales | | (18.6) | | (15.3) |
+------------------------------------------+--------+--------+----+--------+
| | | | | |
+------------------------------------------+--------+--------+----+--------+
| Gross profit | | 6.8 | | 6.2 |
+------------------------------------------+--------+--------+----+--------+
| | | | | |
+------------------------------------------+--------+--------+----+--------+
| Impairment charge | | - | | (0.2) |
+------------------------------------------+--------+--------+----+--------+
| Other administrative expenses | | (4.3) | | (4.7) |
+------------------------------------------+--------+--------+----+--------+
| | | | | |
+------------------------------------------+--------+--------+----+--------+
| EBITDA | | 2.5 | | 1.3 |
+------------------------------------------+--------+--------+----+--------+
| | | | | |
+------------------------------------------+--------+--------+----+--------+
| Depreciation and amortisation | | (0.4) | | (0.3) |
+------------------------------------------+--------+--------+----+--------+
| | | | | |
+------------------------------------------+--------+--------+----+--------+
| Profit before finance cost, foreign | | 2.1 | | 1.0 |
| exchange loss/(gain)and tax | | | | |
+------------------------------------------+--------+--------+----+--------+
| | | | | |
+------------------------------------------+--------+--------+----+--------+
| Finance costs | | (0.1) | | (0.2) |
+------------------------------------------+--------+--------+----+--------+
| Foreign exchange (loss)/gain | | (0.2) | | 0.5 |
+------------------------------------------+--------+--------+----+--------+
| | | | | |
+------------------------------------------+--------+--------+----+--------+
| Profit before tax | | 1.8 | | 1.3 |
+------------------------------------------+--------+--------+----+--------+
| | | | | |
+------------------------------------------+--------+--------+----+--------+
| Income tax expense | | (0.8) | | (0.7) |
+------------------------------------------+--------+--------+----+--------+
| | | | | |
+------------------------------------------+--------+--------+----+--------+
| Profit for the year after tax | | 1.0 | | 0.6 |
| attributable to the | | | | |
| Owners of the parent | | | | |
+------------------------------------------+--------+--------+----+--------+
| | | 1.1c | | 0.7c |
| Earnings per share (cents) | | | | |
| Basic and diluted | | | | |
+------------------------------------------+--------+--------+----+--------+
+------------------------------------------+--------+--------+----+--------+
| | | 5.7 | | (4.1) |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| Other comprehensive income | | | | |
| | | | | |
| Foreign exchange movements | | | | |
+------------------------------------------+--------+--------+----+--------+
| Other comprehensive income for the year, | | 5.7 | | (4.1) |
| net of tax | | | | |
+------------------------------------------+--------+--------+----+--------+
| Total comprehensive income for the year | | 6.7 | | (3.5) |
| attributable to the owners of the parent | | | | |
+------------------------------------------+--------+--------+----+--------+
+-+-------------------------------------------+----+--+--------+------+-----+------+-+----------+
| | Amounts staked does not represent the Group's statutory revenue. It comprises the total |
| | amount |
+-+---------------------------------------------------------------------------------------------+
| | staked by customers on sports and horse betting and net win on | | |
| | gaming activities. | | |
+-+-------------------------------------------------------------------+------------+------------+
| Leisure & Gaming plc | | | | | | | |
| Unaudited Consolidated Statement of | | | | | | | |
| Financial Position | | | | | | | |
| As at 31 December 2009 | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | 31 Dec | | | 31 | |
| | | | | | | Dec | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | 2009 | | | 2008 | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | EURm | | | EURm | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| ASSETS | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Non-current assets | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Property, plant and equipment | | | 0.5 | | | 0.2 | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Goodwill | | | 19.6 | | | 13.9 | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Other intangibles | | | 2.4 | | | 1.9 | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | 22.5 | | | 16.0 | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Current assets | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Trade and other receivables | | | 3.4 | | | 4.2 | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Cash and cash equivalents | | | 1.6 | | | 1.5 | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | 5.0 | | | 5.7 | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Total assets | | | 27.5 | | | 21.7 | |
| | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| LIABILITIES | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Current liabilities | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Borrowings | | | (0.4) | | | (1.2) | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Trade and other payables | | | (2.7) | | | (2.3) | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Deferred income | | | (1.0) | | | (1.1) | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Client funds | | | (1.7) | | | (2.3) | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Current tax liabilities | | | (0.4) | | | (0.6) | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Loan notes | | | (0.3) | | | (0.4) | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | (6.5) | | | (7.9) | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | | | | | |
| Non-current liabilities | | | | | | | |
| Borrowings | | | (0.5) | | | - | |
| | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Total liabilities | | | (7.0) | | | (7.9) | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Net Assets | | | 20.5 | | | 13.8 | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| EQUITY AND RESERVES | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Share capital | | | 6.8 | | | 27.6 | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Share premium | | | 10.5 | | | 77.7 | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Share option reserve | | | 0.6 | | | 0.6 | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Shares to be issued | | | - | | | 0.6 | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Foreign exchange reserve | | | - | | | (11.5) | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Retained earnings | | | 2.6 | | | (81.2) | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| Total Equity and reserves attributable to | | | 20.5 | | | 13.8 | |
| the owners of the parent | | | | | | | |
+---------------------------------------------+----+--+--------+------+-----+--------+----------+
| | | | | | | | | | |
+-+-------------------------------------------+----+--+--------+------+-----+------+-+----------+
+-----------------+------+--+--+--+--+----+----------+----------+----------+--------------+----------+-+----------+---+----------+-------------+----------+-----+----------+----------+--+----+-----+-----------+-----+----------+------+----------+-------+
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Leisure & Gaming plc | | | | | | | | | | | | |
| Unaudited Consolidated Statement of changes in | | | | | | | | | | | | |
| Equity | | | | | | | | | | | | |
| | | | | | | | | | | | | |
+----------------------------------------------------+---------------------+------------------------------------------------------------------------------+-----+----------+-------------+----+-----+-----------+----------------+------+----------+-------+
| | | | | | | | | Attributable | | | | | | |
| | | | | | | | | to the | | | | | | |
| | | | | | | | | owners of | | | | | | |
| | | | | | | | | the parent | | | | | | |
+-----------------+------+-----+--+--+---------------+----------+----------+--------------+------------+----------+---------------------------------------------------------------------------+-----------------------+----------+-------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | Share | | Share | | Share | | Shares | | Foreign | | Retained | |Total | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| |Capital | | Premium | | Option | | to be | | exchange | | earnings | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | Reserve | | issued | |translation | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | EURm | | EURm | | EURm | | EURm | | EURm | | EURm | | EURm | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Balance as at | 27.1 | | 77.6 | | 0.6 | | 0.6 | | (7.4) | | (81.8) | | 16.7 | |
| 31 December | | | | | | | | | | | | | | |
| 2007 | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Comprehensive | | | | | | | | | | | | | | |
| income | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Profit for the | - | | - | | - | | - | | - | | 0.6 | | 0.6 | |
| year | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Other | | | | | | | | | | | | | | |
| comprehensive | | | | | | | | | | | | | | |
| income | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Foreign | - | | - | | - | | - | | (4.1) | | - | | (4.1) | |
| exchange | | | | | | | | | | | | | | |
| movements | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Total | - | | - | | - | | | - | (4.1) | | 0.6 | | (3.5) | |
| comprehensive | | | | | | | | | | | | | | |
| income | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Transactions | | | | | | | | | | | | | | |
| with owners | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Issue of | 0.5 | | 0.1 | | - | | - | | - | | - | | 0.6 | |
| ordinary | | | | | | | | | | | | | | |
| shares | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Balance as at | 27.6 | | 77.7 | | 0.6 | | 0.6 | | (11.5) | | (81.2) | | 13.8 | |
| 31 December | | | | | | | | | | | | | | |
| 2008 | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Comprehensive | - | | - | | - | | - | | - | | 1.0 | | 1.0 | |
| income | | | | | | | | | | | | | | |
| Profit for the | | | | | | | | | | | | | | |
| year | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Other | | | | | | | | | | | | | | |
| comprehensive | | | | | | | | | | | | | | |
| income | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Foreign | - | | - | | - | | - | | 5.7 | | - | | 5.7 | |
| exchange | | | | | | | | | | | | | | |
| movements | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Total | - | | - | | - | | - | | 5.7 | | 1.0 | | 6.7 | |
| comprehensive | | | | | | | | | | | | | | |
| income | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Transactions | | | | | | | | | | | | | | |
| with owners | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Capital | (20.8) | | (67.8) | | - | | | | 5.8 | | 82.8 | | - | |
| re-organisation | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Issue of | - | | 0.6 | | - | | (0.6) | | | | | | - | |
| "shares to be | | | | | | | | | | | | | | |
| issued" | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| Balance as at | 6.8 | | 10.5 | | 0.6 | | - | | - | | 2.6 | | 20.5 | |
| 31 December | | | | | | | | | | | | | | |
| 2009 | | | | | | | | | | | | | | |
+-----------------+---------+--+----------+----------+------------------------------------+----------+----------------+----------+-------------+----------+----------------+----------+-------+------------------------------------------------------------+
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
+-----------------+------+--+--+--+--+----+----------+----------+----------+--------------+----------+-+----------+---+----------+-------------+----------+-----+----------+----------+--+----+-----+-----------+-----+----------+------+----------+-------+
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Leisure & Gaming plc | |
| Unaudited Consolidated Statement of Cash Flows | |
| Year ended 31 December 2009 | |
+----------------------------------------------------------------------------+------------+
| | 2009 | | 2008 | |
+---------------------------------------+---------------+----+---------------+------------+
| | EURm | EURm | | EURm | EURm | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Profit before tax | | 1.8 | | | 1.3 | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Adjustments for: | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Depreciation | | 0.2 | | | - | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Amortisation | | 0.2 | | | 0.3 | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Impairment of intangible assets | | - | | | 0.2 | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Foreign exchange loss | | - | | | 0.4 | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Interest expense | | 0.1 | | | 0.2 | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Decrease / (Increase) in trade and | | 0.8 | | | (1.2) | |
| other receivables | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Increase in trade and other payables | | 0.4 | | | 0.1 | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| (Decrease) in deferred income | | (0.1) | | | (0.7) | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| (Decrease)/ Increase in client funds | | (0.6) | | | 1.2 | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Cash generated from operating | | 2.8 | | | 1.8 | |
| activities | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Tax paid | | (1.0) | | | (0.3) | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Net cash from operating activities | | 1.8 | | | 1.5 | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Investing activities | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Purchases of intangible assets | (0.7) | | | (0.4) | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Purchases of property, plant and | (0.5) | | | (0.1) | | |
| equipment | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Net cash used in investing activities | | (1.2) | | | (0.5) | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Financing activities | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Proceeds from issue of ordinary | - | | | 0.6 | | |
| shares | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Repayment of loans | (0.4) | | | (0.7) | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Proceeds from new loan | - | | | 0.2 | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Interest paid | (0.1) | | | (0.2) | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Net cash outflow from financing | | (0.5) | | |(0.1) | |
| activities | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Net increase in cash and cash | | 0.1 | | | 0.9 | |
| equivalents | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Cash and cash equivalents at | | 1.5 | | | 0.6 | |
| beginning of year | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| Cash and cash equivalents at end of | | 1.6 | | | 1.5 | |
| year | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| | | | | | | |
+---------------------------------------+-------+-------+----+-------+-------+------------+
| |
+---------------------------------------+-------+-------+----+-------+-------+------------+
NOTES TO THE UNAUDITED PRELIMINARY STATEMENT
1 Basis of Preparation
The figures for the year ended 31 December 2009 and 2008 do not constitute
statutory accounts within the meaning of s435 of the Companies Act 2006. The
results included in the preliminary announcement are unaudited. The financial
information set out in this announcement does not constitute the statutory
accounts for the period ended 31 December 2009. The statutory accounts for the
period ended 31 December 2009 will be finalised on the basis of the financial
information presented by the Directors in this preliminary announcement and will
be delivered to the Registrar of Companies following the Company's Annual
General Meeting.
The figures for the year ended 31 December 2008 have been extracted from the
statutory accounts for that year which has been delivered to the Registrar of
Companies and on which the auditor has issued an unqualified audit report. No
statement has been made by the auditor under section 237 (2) or (3) of the
Companies Act 1985 in respect of the 2008 accounts.
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union
(IFRSs as adopted by the EU), IFRIC interpretations and the Companies Act 2006
applicable to companies reporting under IFRS. The information in this
preliminary statement has been extracted from the unaudited financial statements
for the year ended 31 December 2009 and as such, does not contain all the
information required to be disclosed in accordance with the International
Financial Reporting Standards ('IFRS').
This announcement was approved by the board of Directors on 22 April 2010.
The company intends to post the Report and Accounts to shareholders by 28 May
2010. Further copies will be available on request from the company secretary, at
Ashville House, 131-139 The Broadway, Wimbledon, London SW19 1QJ
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LIFLRSVIFFII
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