14th Jul 2006 07:00
Chariot (UK) PLC14 July 2006 14.07.06 Chariot (UK) plc ("Chariot" or the "Company") Update on Charity Partner arrangements Chariot announces that they have agreed in principle with their charity partnersto revise the terms of their marketing contract to provide additional short-termfinancial support to Chariot. Over the next 12 months the charity partners willmake additional payments to Chariot after each of their lotteries which will berebated at a later date. In return for this, the contracts with the charitieswill be extended from two to three years. Under the new agreement the charities will still collect 30p for every £1played. The current cost of monday to the charities is 1.8p for every £1 playedand this will be temporarily increased by a further 6p which will be rebated.This additional payment will be reviewed after six months and will cease as soonas the Directors of Chariot consider it has generated sufficient free cash flowor at the end of 12 months. Chariot will then use its entire free cash flow ona quarterly basis to rebate the charities from this point as soon as possible upuntil the end of their three year contracts if required. Peter Jones, Chairman of Chariot (UK) plc added: "We have worked in partnershipwith the charities to reach a deal that works for us both. We can now continueto implement our new business plan and look forward to the future of the game inreturn for a modest and ultimately rebated sacrifice by the charities. Wecontinue to be highly encouraged by the strong support for the monday concept weare seeing from all our charity partners." New charity contract terms The original terms of the charity partners' contract with Chariot have beenamended as follows: The original agreement states: • Charities have a two year deal with monday. • They receive 30p in the £1 played - the money is given as unrestricted funding within 10 days of each draw without any application process. • There are no upfront costs for participation in the game(1) - fundraising has a cost to the charity and monday is one of the cheapest activities. All payments are made after each draw, are based on the confirmed earnings and never in advance. The cost of the lottery to the charity breaks down as follows: o Administration and management of their lottery by the External Lottery Manager is equivalent to 0.3p in the £1 played. o Set up cost for each lottery of £750. o A one year only contribution to Chariot for marketing, equivalent to 1.5p in the £1 played. (1) Note: The majority of charities already had Gambling Commission licencespermitting them to run their own society lotteries for up to three years inaddition to monday. 15 of the 70 did not and this is an upfront cost ofapproximately £5,000 payable to the Government. The revised terms extend the above as follows: • Charity contracts are increased from two to three years - this allows charities to participate in up to a further five lotteries. • An additional payment to Chariot equivalent to 6p in the £1 played. This will be rebated once Chariot reaches agreed financial targets and will be reviewed after six months. • Lottery set up cost is temporarily reduced from £750 to £500. This reduction will be stopped at the same point as the additional charity payment and the set up cost will return to £750. Any charities with draws at the reduced level will be expected to pay the £250 difference per draw at this point. The new contract terms have received formal agreement in principle from morethan 60 out of 70 of the charity partners to date. Final signed agreements willbe received in due course following formal approvals. monday - the Charities Lottery has raised over £952,000 to date for itsparticipating charities. Draws of the lottery are held every Monday. mondaysupports 70 charity partners. The public can buy tickets all week and atanytime online at www.playmonday.com. - ends - For further information: Stuart Handley - Director of Communications Chariot (UK) plc: 07738 933444 Nick Naylor - Noble & Company Limited 0207 763 2200 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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