15th Apr 2015 07:38
LONDON (Alliance News) - Chinese regulated lottery products company DJI Holdings PLC saw its shares fall Wednesday as it said it expects its results for 2014 to be below market expectations due to delays related to the suspension of online lottery sales in China and due to higher-than-anticipated commission payments.
DJI said that although it expects growth in gross sales to be significantly ahead of market expectations, delays to fee and bonus revenue related to work done in 2014, caused by the suspension of online lottery sales in China, and higher-than-expected fees have meant adjusted operating earnings before interest, taxation, depreciation and amortisation in the fourth quarter of 2014 will be materially lower than expected.
The company said it has been advised by partners that they are unable to complete its fee and bonus payments until the temporary suspension of online lottery sales imposed by the Chinese government ends. Though DJI has performed the necessary services to earn the payments, it said there is a lack of certainty regarding the outcome of current payment negotiations. In order to ensure its results for 2014 are reported in a timely fashion, DJI said it has decided it will recognise this delayed revenue in its 2015 results.
The company also said it incurred higher-than-expected commission fees in the fourth quarter, which rose to a further GBP1 million, driving the Ebitda loss.
"DJI's long term objective remains to be a leading player in this industry and we believe we are well positioned to succeed through our relationships with substantial trading partners and relevant authorities. The company has a strong pipeline of revenue opportunities based on expanding its channels to market and providing new content and we look forward to the remainder of 2015 with confidence," said Chief Executive Darren Mercer.
DJI shares were down 8.6% just after the open to 53.00 pence, one of the worst performers in the AIM All-Share index.
By Sam Unsted; [email protected]; @SamUAtAlliance
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