29th Mar 2006 07:02
World Gaming PLC29 March 2006 FOR IMMEDIATE RELEASE 29 MARCH 2006 WORLD GAMING PLC (TIDM:WGP) FINAL RESULTS FOR THE THREE MONTHS AND YEAR ENDED 31 DECEMBER 2005 The Board of World Gaming plc ("World Gaming"), whose subsidiary companies (the"Group) operate internet gaming sites and also license software offering acomprehensive suite of internet gaming products and services to operators, ispleased to announce the Group's fourth quarter and full year results for thethree and twelve months ended 31 December 2005. HIGHLIGHTS - THREE MONTHS ENDED 31 DECEMBER 2005 •Acquisition of the SPORTSBETTING.COM business effective 1 October 2005 for $81.8m in cash and shares. •Pre-tax profit before goodwill amortisation and exceptional items for the quarter of $4.4m compared to $0.4m for the fourth quarter of 2004. €21,414 new customers added in the quarter representing a 35% increase in growth rates compared to the fourth quarter of 2004*. •New European white-label launched in the fourth quarter of 2005. •Strong cross-sell with 37% of sports bettors expanding their play to casino gaming and poker products in the quarter. HIGHLIGHTS - YEAR ENDED 31 DECEMBER 2005 •Listing on AIM in May 2005 raising £2.5m before costs. •Five new licensees launched in 2005. €65,000 new customers added in the year representing a 30% increase in growth rates compared to 2004*. •Pre-tax profit before goodwill amortisation and exceptional items for the year up 24% to $6.6m compared to $5.2m for 2004. * Assuming that the SPORTSBETTING.COM business had been owned throughout 2004 for comparative purposes. World Gaming plc CEO, Daniel Moran said: "The Group began the year with a clear strategy of acquiring an industry leading brand in the internet gaming space. Inaddition to leveraging the Group's exceptional software and infrastructureresources, the acquisition of the SPORTSBETTING.COM business has increased the scale of the Group significantly and forms a solid base for continued organicand acquisitive growth. The Group enters 2006 with a resolve to continue in itsstrategy of maintaining and developing a global internet gaming Group." --ENDS-- Enquiries: WORLD GAMING PLC Tel: +1 888 883 0833Daniel Moran, Chief ExecutiveDavid Naismith, Chief Financial Officer BISHOPSGATE COMMUNICATIONS LIMITED Tel: 020 7430 1600Maxine BarnesDominic Barretto DANIEL STEWART & COMPANY PLC Tel: 020 7776 6550Ruari McGirr The Company's Ordinary Shares have not been and will not be registered under theU.S. Securities Act of 1933 (the "Securities Act") and may not be offered orsold in the United States or to a U.S. person (as such term is defined inRegulations S under the Securities Act) absent registration or an applicableexemption from registration under the Securities Act. FULL STATEMENT ATTACHED CHIEF EXECUTIVE'S STATEMENT Introduction The year to 31 December 2005 has been an exciting and extremely rewarding yearfor the Group. In May, the Group listed on AIM of the London Stock Exchange raising £2.5mbefore costs at 52.5p per share, but more importantly, with a strategy toleverage its software, infrastructure and cash resources through acquisition ofan industry leading Internet gaming operator. In October, the Group announced that it had signed a conditional agreement forthe purchase of the SPORTSBETTING.COM business. The Group completed thisacquisition in December after raising a further £6.0m before costs through theplacement of 4.8m new shares at 125p and $40m in loan facilities. In addition,the Group secured a $5m revolving credit facility that to this date remainsunutilised. The terms of the acquisition agreement for the SPORTSBETTING.COM business werestructured based on profit before tax ("PBT") expectations for the calendar yearending 31 December 2005, with no earn-out or rights to future profits for thevendors. While all key indicators including deposit levels, customer sign upsand wagering volumes remained strong throughout the fourth quarter,industry-wide sports margins were unusually low. As a result PBT for theSPORTSBETTING.COM business fell short of the maximum consideration threshold of$15m by $1.4m. This shortfall saved the Group $14.2m in cash and shareconsideration that would have otherwise been payable to the vendor. The SPORTSBETTING.COM business, now considered the Group's Operating division,has demonstrated solid growth in the first quarter under the Group'sownership. Unusually low U.S. sports margins experienced in the fourth quarterof 2005 and reported throughout the industry have recovered strongly in thefirst quarter of 2006. With respect to the software licensing business, the Group integrated five newlicensees during the past year and developed further its infrastructure networkduring the past summer in order to improve the support of these licensees inaddition to its now wholly-owned Operating division. The Group enters the second quarter of 2006 well placed to strengthen itsorganic revenue growth in both its newly acquired Operating division and itsrobust licensing offerings. Financial Results Three and twelve months ending 31 December 2005 Turnover for the quarter ended 31 December 2005 increased by $96.4m to $99.1mcompared to $2.7m for the same period last year. For the year ended 31 December2005 turnover increased by $90.2m to $106.5m compared to $16.3m for the sameperiod last year. The increase in turnover is wholly attributable to theSportsbetting Transaction effective 1 October 2005 at which time the Groupacquired all of the business and assets of its then largest licensee whoseleading brand is SPORTSBETTING.COM (herein after referred to the "Operatingdivision"). (See "Sportsbetting Transaction" below). The Group now maintains two key revenue streams: 1. Royalties and fees which includes royalties charged to the Group's continuing licensees plus hosting fees charged to Sportingbet plc ("Sportingbet") for hosting services provided from its wholly-owned hosting infrastructure; and 2. Operations, representing revenue derived from its wholly-owned internet gaming sites acquired through the Sportsbetting Transaction. Both the Sportsbetting Transaction, effective 1 October 2005 and the jointventure transaction with Sportingbet, effective 1 October 2004 have materiallychanged the composition of the Group's income in the current and comparativeperiods. The acquisition of the Sportsbetting business has added a new revenuestream for the fourth quarter and future periods through operations. As a resultof the acquisition, the Group no longer receives royalty revenue from theSportsbetting business. The transaction with Sportingbet, which has beenpreviously reported on, eliminated royalty revenue in return for certainconsideration and other arrangements. Royalty and fee income decreased by 40.5% or $1.1m to $1.6m for the quarterended 31 December 2005, compared to $2.7m for the same period last year. Thereduction is attributable to no longer receiving software royalties from theSPORTSBETTING.COM business as a result of the acquisition. For the year ended 31December 2005 royalty and fee revenue declined by 45.0% or $7.3m to $9.0m. Ofthis decline in royalty and fee revenue, $0.7m was attributable to no longerreceiving royalties from SPORTSBETTING.COM, and $7.5m was the full year effectof no longer receiving royalties from Sportingbet before taking into the accountthe elimination of development costs as a result of this transaction. However,revenues from new and continuing licensees grew by $0.9m to $3.2m representing a38.8% growth in like-for-like licensing revenue. Turnover from operations, representing gross sports and horse racing wagers andnet casino and poker win was $97.5m for both the quarter and year ended 31December 2005, compared to $nil for the same periods in 2004. For comparativepurposes, the proforma growth in turnover in the Operating division was 42.1% or$28.9m for the quarter ended 31 December 2005 and 50.8% or $79.4m for the yearended 31 December 2005, assuming that SPORTSBETTING.COM had been owned for theentire period. Gross profit increased $7.4m to $9.1m for the quarter ended 31 December 2005compared to $1.7m for the same quarter last year. The increase in the quarterwas attributable to a gross profit contribution from the Operating division of$8.3m after deducting $0.5m of customer bonuses and jackpot transfers in thequarter. For comparative purposes, the proforma gross profit contribution fromthe Operating division for the quarter ended 31 December 2004 was $7.0m afterdeducting $0.3m in customer bonuses and jackpot transfers, representing an 18.9%increase in gross profit contribution, subdued by the lower than expected sportsmargins experienced in the quarter. For the year ended 31 December 2005, gross profit remained unchanged at $14.4mcompared with 2004. The increase in gross profit from the Operating divisiondescribed above was offset by the effect of no longer receiving royalties fromSportingbet. On a proforma basis, the gross profit contribution from theOperating division for the year ended 31 December 2005 was $27.1m afterdeducting $2.0m in customer bonuses and jackpot transfers, representing a 55.1%increase in gross profit for the Sportsbetting business for the 12 month period. The gross margin percentage for the quarter ended 31 December 2005 was 9.2%compared to 63.8% for the same period last year. For the year ended 31 December2005 gross margin percentage was 13.5% compared to 88.8% in 2004. The decreaseresulted from the significant change in revenue mix as a result of theacquisition of SPORTSBETTING.COM. On a proforma basis the gross marginpercentage for the Operating division for the quarter ended 31 December 2005 was8.5% compared to 10.1% for the quarter ended 31 December 2004. The reduction isattributable to lower than expected win margins on sports in the quarter. Theproforma gross margin percentage for the Operating division for the 12 monthsended 31 December 2005 was 11.5% compared to 11.2% in 2004. Operating expenses before goodwill amortisation increased by $3.3m to $4.7mduring the quarter ended 31 December 2005 compared to $1.4m for the same periodlast year. The increase occurred primarily due to the inclusion of the Operatingdivision effective 1 October 2005. Costs associated with operations, primarilyconsisting of transaction processing, customer service and marketing,contributed $3.2m to total operating expenses in the quarter. Operating expensesfor the year decreased by $1.2m to $8.1m compared to $9.3m in 2004. Thereduction was the result of no longer paying for development costs as a resultof the Sportingbet Transaction, partially offset by including the cost base ofthe Operating division in the fourth quarter. Operating profit before goodwill amortisation and exceptional items for thequarter ended 31 December 2005 increased by $4.1 to $4.4 compared to $0.4m forthe comparative period in 2004. For the year ended 31 December 2005, operatingprofit before goodwill amortisation and exceptional items increased by $1.5m to$6.6m compared to $5.1m for the same period last year. Goodwill amortisation for the three and twelve months ended 31 December 2005 was$0.9m compared to $nil for the comparative periods in 2004. Finance costs,representing interest and loan cost amortisation, was $0.2m for the three andtwelve months ended 31 December 2005 compared to $nil for the comparativeperiods in 2004. Profit after tax and exceptional items for the three months ended 31 December2005 was $3.5m, a reduction of 9.0m. Profit after tax and exceptional items forthe year ended 31 December 2005 decreased by $11.7m to $5.7m. The reduction inboth periods is entirely attributable to the extraordinary gain of $12.2mrelating to the Sportingbet Transaction included in 2004. Basic earnings per share before goodwill amortisation and exceptional items perparticipating ordinary share for the quarter ended 31 December 2005 was 10.5cents (8.4 cents after goodwill amortisation and exceptional items) compared to1.1 cents (38.6 cents after goodwill amortisation and exceptional items) for thesame quarter in 2004. Basic earnings per share before goodwill amortisation andexceptional items per participating ordinary share for the year ended 31December 2005 was 15.6 cents (13.5 cents after goodwill amortisation andexceptional items) compared to 15.9 cents (53.4 cents after goodwillamortisation and exceptional items) in 2004. Participating ordinary sharesinclude those shares that have voting and economic rights and exclude thoseshares held by Sportingbet in accordance with the transaction effective 1October 2004. On a fully diluted basis earnings per share before goodwill amortisation andexceptional items per participating ordinary share for the quarter ended 31December 2005 was 9.4 cents (7.5 cents after goodwill amortisation andexceptional items) compared to 0.9 cents (33.6 cents after goodwill amortisationand exceptional items) for the same quarter in 2004. Fully diluted earnings pershare before goodwill amortisation and exceptional items per participatingordinary share for the year ended 31 December 2005 was 14.0 cents (12.0 centsafter goodwill amortisation and exceptional items) compared to 13.9 cents (46.5cents after goodwill amortisation and exceptional items) in 2004. Review of Operations The acquisition of SPORTSBETTING.COM has added a new dimension to the Group'sbusiness. The scale of the business has increased dramatically and our incomestream is now more diversified. Apart from the well documented pressure onindustry-wide U.S. sports margins in the fourth quarter of 2005, all other keyindicators remained strong in the Operating division and these indicators havecontinued into 2006. In addition, the Group is continuing in its licensing activities whichsuccessfully licensed or white-labelled five new licensees in 2005. Planned hardware and software upgrades that took place in the second quarterhave established increases in processing speeds experienced by licensees'customers and greater volume and storage capacity. Operating Division (SPORTSBETTING.COM) The Operating division added 21,414 new customers in the fourth quarter comparedto 15,907 new customers for the fourth quarter of 2004, a 35% increase in growthrates than the comparative quarter of 2004. Of these new customers 51% wereconverted to new active betting customers at an unchanged total marketing spendwhen compared to the same period last year. For the year, 65,000 new customerswere added to the database, 30% more than in 2004. Active customer acquisition costs were $101 for the year compared to $108 in2004. The average loss per active customer, being the total margin divided by activecustomers over the quarter, was $240; across the year the average quarterly lossper active customer was $266. The average life of a customer as at 31 December2005 was approximately 472 days or 16 months compared to 440 days or 15 monthsfor as at 31 December 2004. The average lifetime value of a customer at 31December 2005 was therefore approximately $1,397. Sports margins including horse racing in the quarter were 4.0% (2004: 5.8%)representing lower than expected margins on sports due to unusual results acrossthe industry. For the full year, sports margins including horse racing were 6.9%(2004: 6.4%) Gaming margins in the fourth quarter were 2.2% (2004: 2.4%). SPORTSBETTING.COM's poker product was launched in the middle of 2005 and yieldedrevenue before commissions of $1.4m (2004: $nil) for the quarter and $2.4m forthe year. The growth in poker, derived primarily from cross-selling the sportsbetting product, continues to strengthen. The Operating division delivered exceptional cross-sell from sports bettingplayers with an average 37.4% (2004: 36.3%) in the quarter of players placing asports wager going on to place a bet on a gaming product or poker. This yielded$3.6m (2004: $3.0m) of gaming revenue and $0.8m (2004: $nil) of poker revenuefor the Group in the quarter. The cross-sell of products within the database isenhanced by the Group's single player account status across all products. Licensing Division During the year, the Group added five new licensees. In addition, one newlicensee has been signed so far this year and is expected to go live in thesecond quarter of 2006. In the fourth quarter of 2005, the Group launched itsfirst European white-label site. No material revenue is yet being generated bythese new licensees, however growth has been encouraging through the wintersports seasons and the Group continues to monitor further licensing andwhite-label opportunities. Regulatory Developments Over the past few years, authorities in certain jurisdictions, such as theUnited States, have taken indirect steps to restrict online gaming by seeking toprevent or deter banks, payment processors, media providers and other suppliersfrom transacting with and providing services to online gaming operators, eventhough many of these online gaming operators are legally licensed in thejurisdiction in which they operate. The application or enforcement (or threat ofenforcement) of restrictive laws or regulations, or a change in sentiment byregulatory authorities or the enactment of new legislation prohibiting orrestricting online gaming or services used by online gaming businesses or thetaking of certain indirect steps, may severely and adversely impact the businessand financial position of online gaming companies such as ours. Presently,there are two pieces of proposed legislation being considered in the US House ofRepresentatives (one introduced by Congressman Leach and the other byCongressman Goodlatte), with the likelihood of a third being introduced in theUS Senate by US Senator Kyl, as an amendment to other proposed legislationpresently being considered or, in the future, as proposed stand-alonelegislation. Each of these bills will need, in the ordinary course, to bepassed by both Houses of Congress, probably before October 2006 when the 109thCongress is expected to adjourn, ahead of the mid-term 2006 elections. Inaddition, the proposed bills offer "carve-outs" to certain US domestic groupsthat undertake US domestic gaming activities and the insertion of suchcarve-outs by special interests in the past undoubtedly had an impact on thefailure of such legislation in the past. Obviously, we will continue to monitordevelopments closely. In November 2004, the World Trade Organisation ("WTO") held that the US was inviolation of its commitments under international trade laws by not allowingoperators of Internet Gaming services licensed in Antigua and Barbuda to accessUS markets. The decision was appealed and the WTO ruled that the US had shownthat its laws prohibiting gambling are "necessary to protect public morals ormaintain public order" but had failed to demonstrate, in light of its laws inrespect of on-line gambling on horseracing, that such prohibitions are appliedequally to both foreign and domestic providers of on-line gambling services forhorseracing. Consequently, the WTO recommended that the US bring its laws intoconformity with its obligations under international trade rules. Pursuant tothe report of the arbitrator circulated in August 2005, the US has been givenuntil 3 April 2006 to clarify its policies on Internet gambling and thepurported extraterritorial application of its laws. It remains to be seen whatlegislative proposals, if any, will be adopted in the US in relation to Internetgambling and whether this will lead to a change in US Internet Gaming policy orwhat effect this issue will have on the current proposed legislation in the USHouse of Representatives. Trading Outlook The Group has recorded strong performance to date in the first quarter of 2006.Sports margins for the Operating division have been relatively strong throughoutthe first quarter after the lower than expected margins experienced in thefourth quarter of 2005. The Group experienced a successful NFL Superbowl both in volume of transactionsprocessed on and the trading result for the day. During the first quarter of 2006, the Board has concentrated on migratingSPORTSBETTING.COM's marketing function to within the Group. This is on scheduleto be completed during the third quarter of 2006. Throughout this period, thevendors of the SPORTSBETTING.COM business remain involved in day-to-dayoperations. The remaining elements of the business were already managed orcontrolled by the Group and therefore will require no further integration. In 2006 the Group will launch further software and infrastructure upgradesincluding a new casino software release scheduled for the third quarter of 2006.In March 2006, the Group launched a 3-card poker product to further enhance itscasino offering. As a result of seasonality, the second quarter is historically the quietestquarter in terms of sports wagering volume. The Group expects to mitigate thisin part through continued strong growth in non-event reliant products such aspoker and casino. Sportsbetting Transaction On October 25, 2005 the Group announced that it had entered into a conditionalagreement to acquire certain assets of Real Entertainment Ltd. and the entireissued capital of DNI Holdings Ltd. (together the "SPORTSBETTING.COM group"),which was then the Group's largest licensee. The transaction subsequentlycompleted on December 13, 2005. The original terms of the acquisition were for a maximum consideration of up to$96m payable 75 percent in cash and 25 percent in new ordinary shares of theCompany. On completion in December, $54m was paid in cash to the Vendors withthe outstanding balance depending on the final agreed profit before tax ("PBT")for the twelve months ending 31 December 2005. In March 2006, the Group and the vendors of the SPORTSBETTING.COM businessagreed the final PBT for the twelve months ended 31 December 2005 of $13.6m.Under the terms of the acquisition agreement this meant that total considerationof $81.8m would be payable, being 6 times the PBT for the period. During theperiod between completion and agreement of the final PBT, the Group had paid afurther $10.8m into escrow. On agreement of the final PBT the Group recovered$3.5m of these escrow funds and $1.2m was released to the vendors. The remaining$6.1m remains in escrow subject to warranty caveats and will be released to thevendors on 1 October 2006 subject to no warranties having been breached. In addition, on agreement of the PBT, the company issued $20.4m in new ordinaryshares of the Company issued at 125 pence to the vendor subject to agreedlock-up arrangements. $2.0m of these shares remain in escrow subject to the samewarranty covenants mentioned above. Financing of the cash portion of consideration was through the Group's existingcash reserves, plus a $40m loan facility arranged through Barclays PLC. The termof the loan is 27 months from the drawdown date of December 12, 2005. Repaymentsare due quarterly throughout the term of the loan. In addition, the Group has anunutilised revolving facility with Barclays for $5m. Further cash for thepurpose of the Transaction was raised through the Placing of 4.8m new ordinaryshares of the Company raising £6m for the Transaction before expenses. The transaction had an effective date of 1 October 2005. The effective date,which is earlier than the completion date is the date from which all ofSPORTSBETTING.COM's revenues and costs accrue to the Group. The business wasacquired on a cash-free, debt-free basis as at the effective date. Daniel MoranChief Executive The information contained herein is not for publication or distribution topersons in the United States of America. The securities referred to hereinhave not been and will not be registered under the US Securities Act 1933, as amended, and may not be offered or sold without registration thereunder orpursuant to an available exemption therefrom. World Gaming plc Unaudited Consolidated Profit and Loss Account Three and twelve months ended the 31 December 2005 and 2004 Note 3 months 3 months 12 months 12 months 31 December 31 December 31 December 31 December 2005 2004 2005 2004 $'000 $'000 $'000 $'000 TURNOVER 2 99,143 2,738 106,471 16,288 Cost of sales (90,021) (991) (92,057) (1,871) -------- -------- -------- -------GROSS PROFIT 9,122 1,747 14,414 14,417 -------- -------- -------- -------Goodwill amortisation (882) - (882) - Otheradministration expenses (4,687) (1,405) (8,110) (9,337) -------- -------- -------- ------- Total administration expenses (5,569) (1,405) (8,992) (9,337) -------- -------- -------- -------Operating profitbefore goodwill amortisation 4,435 342 6,304 5,080Goodwill amortisation (882) - (882) - -------- -------- -------- -------Operating profitbefore finance costs andextraordinary items 3,553 342 5,422 5,080 Finance costs 5 (4) 23 269 103 -------- -------- -------- -------Profit before taxation andextraordinary items 3,549 365 5,691 5,183 Extraordinary item - 12,187 - 12,187 -------- -------- -------- -------Profit before tax 3,549 12,552 5,691 17,370 -------- -------- -------- ------- Taxation - - - - Profit for thefinancial period 3,549 12,552 5,691 17,370 ======== ======== ======== ======= Earnings per ordinary share (cents)3Basic 9.1 38.6 14.6 53.4Diluted 8.0 33.6 12.8 46.5 Earnings per share adjusted (cents)3 Basic 11.4 1.1 16.8 15.9 Diluted 10.0 0.9 14.8 13.9 World Gaming plc Consolidated Balance Sheets As at 31 December 2005 and 2004 31 December 31 December 2005 2004 Note (unaudited) $'000 $'000FIXED ASSETSIntangible assets - goodwill 85,662 -Tangible assets 1,231 1,419 ---------- --------- 86,893 1,419 CURRENT ASSETSDebtors 9,601 13,672Prepayments and accrued income 989 344Consideration recoverable 3,481 -Cash at bank and in hand 7,605 7,944 ---------- --------- 21,676 21,960 CREDITORS: Amounts falling due within one yearBank loans 5 14,711 -Other creditors and accruals 9,659 7,094Deferred consideration 3,600 - ---------- --------- 27,970 7,094 ---------- ---------NET CURRENT (LIABILITIES)/ASSETS (6,294) 14,866 ---------- --------- TOTAL ASSETS LESS CURRENT LIABILITIES 80,599 16,285 CREDITORS: Amounts falling due after more thanone yearBank loans 5 24,396 -PROVISION FOR LIABILITIES AND CHARGES - 257 ---------- ---------NET ASSETS 56,203 16,028 ========== ========= CAPITAL AND RESERVESCalled up share capital 197 134Share premium account 27,793 1,675Shares to be issued 8,440 -Deferred compensation reserve 567 567Merger reserve 23,528 23,528Profit and loss account (4,322) (9,876) ---------- ---------SHAREHOLDERS' FUNDS 56,203 16,028 ========== ========= World Gaming plc Unaudited Consolidated Cash Flow statement Year to 31 December 2005 and 2004 12 months ended 12 months ended 31 December 31 December 2005 2004 $'000 $'000 Net cash inflow from operating activities 4,898 6,374 Returns on investment and servicing offinance 438 103 Acquisitions (65,244) - Capital expenditure (605) (1,065) Consideration received - Sportingbet 7,000 2,032 --------- --------- CASH INFLOW/(OUTFLOW) BEFORE FINANCING (53,513) 7,444 Financing 39,068 (2,243) Issue of shares 14,181 62 Net (DECREASE)/INCREASE IN CASH IN THEPERIOD (264) 5,263 ========= ========= RECONCILIATION OF NET CASHFLOW TO MOVEMENT INNET FUNDS (Decrease)/Increase in cash in the period (264) 5,263 Cash (inflow)/outflow from(increase)/decrease in debt (40,000) 2,243 --------- ---------MOVEMENT IN NET FUNDS RESULTING FROM CASHFLOWS IN PERIOD (40,264) 7,506 --------- ---------Currency translation differences (75) (189)Finance Lease paid 14 -Non-cash movements 893 900 --------- ---------Movement in net funds in period (39,432) 8,217 --------- --------- --------- ---------Net funds/(debt) at start of period 7,930 (287) --------- --------- NET (DEBT)/ FUNDS AT END OF PERIOD (31,502) 7,930 ========= ========= 1. Consolidated statement of total recognised gains and losses 3 months 3 months 12 months 12 months 31 Dec 31 Dec 31 Dec 31 Dec 2005 2004 2005 2004 $'000 $'000 $'000 $'000Profit for the financial period 3,549 12,552 5,691 17,370 Currency translation differenceon foreign currency netinvestment (157) 32 (142) 168 -------- -------- -------- --------Total recognised gains relatingto the year 3,392 12,584 5,549 17,538 ======== ======== ======== ======== 2. Analysis of turnover 3 months 3 months 12 months 12 months 31 Dec 31 Dec 31 Dec 31 Dec 2005 2004 2005 2004 $'000 $'000 $'000 $'000Analysis of revenue by activity: Sports betting & racing 91,847 - 91,847 -Casino and gaming 4,239 - 4,239 -Poker rake 1,427 - 1,427 -Royalty and fee income 1,630 2,738 8,958 16,288 -------- -------- --------- -------- 99,143 2,738 106,471 16,288 ======== ======== ========= ======== 3. Earnings per share Turnover represents the amount staked in respect of bets placed on sporting andhorse racing events and net win in respect of bets placed on casino games andrake for poker games that have concluded in the period. The calculation of basic earnings per share for the year is based on the profitafter tax at 31 December 2005 of $5.7m (2004: $17.4m) and on the weightedaverage number of ordinary shares in issue of 39,017,629 (2004: 32,475,203). The calculation of diluted earnings per share for the year is based on theprofit after tax at 31 December 2005 of $5.7m (2004: $17.4m) and on the weightedaverage number of ordinary shares in issue adjusted to assume the exercise ofoptions over shares and the dilutive effect of shares to be issued in respect ofthe acquisition in the year of 44,372,787 (2004: 37,383,953). Adjusted basic and diluted earnings per share before goodwill and exceptionalitems for the year excludes amortisation of goodwill of $0.9m (2004: $nil) andexceptional items of $12.2m in 2004. The calculation of basic earnings per share for the quarter is based on theprofit after tax at 31 December 2005 of $3.5m (2004: $12.6m) and on the weightedaverage number of ordinary shares in issue of 39,017,629 (2004: 32,475,203). The calculation of diluted earnings per share for the quarter is based on theprofit after tax at 31 December 2005 of $3.5m (2004: $12.2m) and on the weightedaverage number of ordinary shares in issue adjusted to assume the exercise ofoptions over shares and the dilutive effect of shares to be issued in respect ofthe acquisition in the quarter of 44,372,787 (2004: 37,383,953). Adjusted basic and diluted earnings per share before goodwill and exceptionalitems for the quarter excludes amortisation of goodwill of $0.9m (2004: $nil)and exceptional items of $12.2m in the quarter 2004. Earnings per share excludes shares with no voting or economic rights in respectof the 13,506,204 shares held by Sportingbet PLC and its affiliates that havebeen set aside as a result of the Transaction with Sportingbet PLC and may berepurchased by the Company for an aggregate $1 when the Company has retainedearnings to do so. 4. Basis of preparation There have been no material changes to the accounting policies of the Group asset out in 31 December 2004 consolidated financial statements. 5. Finance costs 3 months 3 months 12 months 12 months 31 Dec 31 Dec 31 Dec 31 Dec 2005 2004 2005 2004 $'000 $'000 $'000 $'000 Interest receivable 165 23 438 111Interest payable (145) - (145) (8)Amortisation of loan agreementfees (24) - (24) - -------- -------- --------- -------- (4) 23 269 103- ======== ======== ========= ======== Deferred finance costs of $1,256, netted against the loan balances outstandingat 31 December 2005 are being amortised over the period of the loan agreement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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