Gaming Corporation PLC
Gaming Corporation plc
Interim Accounts
Six months ended 31 March 2005
Highlights for the period:
Turnover increased 80% to �9.9 Million for the 6 months ended 31st march 2005
(2004: �5.5 Million)
Cash balances at the period end of over �10 Million (2004: �630,000)
Gross profit increased 174% to �718,162 (2004: 261,804)
Successfully raised �10 Million in an institutional placing in March 2005
Over 3 Million unique monthly visitors to the www.casino.co.uk portal in March
2005 (150,000: March 2004)
Casino.co.uk ranked number 1 in the weekly Hitwise rankings for UK gambling
sites
Acquisition of Got2bet.com, a leading international gaming portal
Launch of www.findpoker.com website, a poker portal
Launch of Skillgaming.co.uk, a skill gaming site
Recent Events:
Launch of interactive mobile cash gaming service with Orange
Acquisition of Gambling.com, the Number 1 gaming search engine
Commenting on today's announcement, Justin Drummond, Chief executive, said:
"The performance of the business since the start of the year has exceeded
expectations. Route to market and customer acquisition is essential for any
business and with the unprecedented growth of Casino.co.uk and our recent
acquisition of Gambling.com, Gaming Corporation has consolidated its market
leading position."
"Gaming Corporation now has the largest gambling search portfolio in the world;
our premier sites, gambling.com and casino.co.uk, are key customer acquisition
sites to many of the world's largest gaming companies."
For further information contact:
Damion Greef, Communications Director, 07736 381 030
Trevor Phillips, Holborn PR, 020 7929 5599
Jason Drummond, Chairman, 020 7618 9000
Justin Drummond, Chief Executive, 020 7618 9000
Mark Ashurst. Canaccord Capital, 020 7518 2777
Gaming Corporation plc
Interim Accounts
Six months ended 31 March 2005
Chairman's Statement
The Board of Gaming Corporation plc ("Gaming Corp" or "the Company"), the worlds
largest online gaming search company and owner of gambling.com and casino.co.uk,
announces interim results for the period ended 31st March 2005.
Highlights for the period:
Turnover increased 80% to �9.9 Million for the 6 months ended 31st march 2005
(2004: �5.5 Million)
Cash balances at the period end of over �10 Million (2004: �630,000)
Gross profit increased 174% to �718,162 (2004: 261,804)
Successfully raised �10 Million in an institutional placing in March 2005
Over 3 Million unique monthly visitors to the www.casino.co.uk portal in March
2005 (150,000: March 2004)
Casino.co.uk ranked number 1 in the weekly Hitwise rankings for UK gambling
sites
Acquisition of Got2bet.com, a leading international gaming portal
Launch of www.findpoker.com website, a poker portal
Launch of Skillgaming.co.uk, a skill gaming site
Recent Events:
Launch of interactive mobile cash gaming service with Orange
Acquisition of Gambling.com, the Number 1 gaming search engine
Financial Summary
The results for the six months ended 31st March 2005 show consolidated turnover
of �9,932,232 (2004: �5,525,329), gross profit of �718,162 (2004: �261,804), and
a loss for the period of �52,576 (2004: loss of �385,915). At the end of the
period, net assets were �11.8 million (2004: �1.7 million) and the net cash
balance was �10.2 million (2004: �0.6 million).
Current Trading and Prospects
Gaming Corporation has made significant advances in both its financial
performance and business since the beginning of 2005 and as impressive as these
results may be, they do not reflect the financial impact of our recent growth,
developments and acquisitions.
The business has made monumental progress since the beginning of 2005:
Corporate
Following the appointment of Canaccord Capital (Europe) Limited as the Company's
nominated adviser and broker, we raised �10 million in an institutional placing
in March 2005. We have seen significant improvements in increased liquidity in
the Company's shares and many leading financial institutions are now significant
shareholders.
Traffic: #1
The number of people who visit us has grown dramatically over the last year with
over 4 million unique visits to our Group websites in March 2005. We have also
experienced significant improvements in profitability after we changed our
revenue model in January 2005 to "pay per click".
Gambling.com
Recently acquired by Gaming Corporation, Gambling.com has been the global leader
in search for casino, poker, and sports betting sites since 1997. Income is
primarily generated through pay per click advertising, where clients bid to
reach higher rankings in the search results, as used by other search engines
such as Google and Overture.
The result of a search on google.com for 'gambling' gives Gambling.com as number
1. In addition, over 500 other global internet and affiliate sites link to the
Gambling.com website. Gambling.com has extensive expertise in direct mailing and
has built a double opt-in database of over 200,000 members.
Gambling.com has an impressive track record of profitable growth but as part of
Gaming Corporation and with the benefit of synergies together with cost savings,
the board would expect this profitability to be enhanced significantly going
forward.
Casino.co.uk
Casino.co.uk has continued to go from strength to strength, making a strong and
profitable contribution to the Group since the start of 2005. Casino.co.uk is
the most visited UK gaming site and has recorded over 3 Million unique visitors
in March this year. The business operates as a portal, in a similar way to other
internet sites such as 'Yahoo', earning income via pay per click third party
advertising and also by operating its own branded services. Casino.co.uk offers
a Casino as well as a Poker room and has recently launched instant win games and
a skill gaming site.
All areas of the Casino.co.uk business have grown rapidly since the beginning of
2005 and the board expects this trend to continue. Going forward we would expect
a further improvement in operating margins due to improved commercial terms from
software suppliers as a result of the critical mass the business has recently
achieved.
Mobile Gaming Business
This newly formed division made a major breakthrough at the beginning of April
with the announcement of the partnership with Orange. As with any new business,
route to market is essential and Orange gives Gaming Corporation access to a
very extensive customer base. This is exciting as a potential market place
offering huge opportunities. Meanwhile negotiations continue with other mobile
networks and Gaming Corporation is now extremely well positioned to gain
substantial market share in the mobile gaming market.
Further developments
The Board continues to evaluate earnings enhancing acquisitions that will either
extend the Company's geographical reach or present further opportunities to
maximize the earnings potential of the Company's current gaming assets. It is
the aim of the Board to build a portfolio of profitable gambling related
websites with a presence in every major online gaming market.
Gaming Corporation has assembled some of the best gambling assets in the world
and will now leverage our undoubted expertise to drive profitability and create
further shareholder value.
Jason Drummond
Chairman
Group profit and loss account
For the six months ended 31 March 2005
Six months Six months Year ended
ended 31 ended 31 ended 30
March March September
2005 2004 2004
(unaudited) (unaudited) (audited)
� � �
Turnover 9,932,231 5,525,329 12,945,245
Cost of sales (9,214,070) (5,263,525) (12,076,937)
Gross profit 718,161 261,804 868,488
Selling and distribution costs (288,760) (138,734) (358,934)
Administrative expenses:
exceptional one-off acquisition costs - - (215,000)
other administration expenses (515,108) (300,716) (793,447)
goodwill amortisation - (210,341) (462,280)
(515,108) (511,057) (1,470,727)
Group operating loss (85,707) (387,987) (961,175)
Interest receivable and similar income 33,878 5,076 19,020
Interest payable and similar charges (492) (3,110) (3,924)
Loss on ordinary activities before taxation (52,321) (386,021) (946,079)
Taxation - - 77,756
Loss on ordinary activities for the period (52,321) (386,021) (868,323)
Minority interest (256) 106 277
Loss for the period attributable
to members of the parent company (52,577) (385,915) (868,046)
Loss per share - basic & diluted 0.03p 0.31p 0.58p
Loss per share - adjusted 0.03p 0.14p 0.15p
Group balance sheet
As at 31 March 2005
As at As at As at
31 March 31 March 30 September
2005 2004 2004
(unaudited) (unaudited) (audited)
� � �
Fixed assets
Intangible assets 1,130,765 877,269 1,130,888
Tangible assets 226,404 141,491 168,260
1,357,169 1,018,760 1,299,148
Current assets
Debtors 781,444 326,596 652,898
Cash at bank and in hand 10,237,496 629,496 1,020,178
11,018,940 956,092 1,673,076
Creditors: amounts falling due within one year (591,153) (313,046) (601,720)
Net current assets 10,427,787 643,046 1,071,356
Net assets 11,784,956 1,661,806 2,370,504
Capital and reserves
Called up share capital 4,428,857 3,202,357 3,702,357
Share premium account 10,442,609 1,011,334 1,702,334
Other reserve 1,422,065 1,422,065 1,422,065
Profit and loss account (4,506,550) (3,971,842) (4,453,973)
Shareholders' funds 11,786,981 1,663,914 2,372,783
Minority interests (2,025) (2,108) (2,279)
11,784,956 1,661,806 2,370,504
Net asset value per ordinary share 4.58p 1.23p 1.28p
Group statement of cash flows
For the six months ended 31 March 2005
Six months Six months Year ended
ended 31 ended 31 ended 30
March March September
2005 2004 2004
(unaudited) (unaudited) (audited)
� � �
Net cash outflow from operating activities (98,638) (288,530) (616,170)
Returns on investments and servicing of finance
Interest received 33,878 5,076 19,020
Interest paid (492) (3,110) (3,924)
33,386 1,966 15,096
Taxation
Corporation tax received - 56,658 56,658
Corporation tax paid (41,798) - -
(41,798) 56,658 56,658
Capital expenditure
Payments to acquire tangible fixed assets (22,610) (8,587) (53,576)
(22,610) (8,587) (53,576)
Acquisitions and disposals
Acquisition of subsidiary undertakings - - (18,550)
Acquisition of business (65,145) - -
Net cash balance acquired with subsidiary undertaking - - 173,784
(65,145) - 155,234
Net cash outflow before management of
liquid resources and financing (194,805) (238,493) (442,758)
Management of liquid resources
Bank deposits 750,000 - (750,000)
Financing
Issue of ordinary share capital 9,466,775 574,750 1,165,750
Increase/(decrease) in cash 10,021,970 336,257 (27,008)
Group statement of cash flows
For the six months ended 31 March 2005
Reconciliation of net cash flow to movement in net funds
Six months Six months Year ended
ended 31 ended 31 ended 30
March March September
2005 2004 2004
(unaudited) (unaudited) (audited)
� � �
Increase/(decrease) in cash 10,021,970 336,257 (27,008)
Cash flow from (decrease)/increase in liquid resources (750,000) - 750,000
Change in net funds resulting from cash flows 9,271,970 336,257 722,992
Net funds at 1 October 965,526 242,534 242,534
Net funds at 31 March (30 September) 10,237,496 578,791 965,526
Notes to the interim accounts
1. Basis of preparation
The interim results for the six months ended 31 March 2005 are unaudited and do
not constitute statutory accounts in accordance with section 240 of the
Companies Act 1985. The financial information has been prepared in accordance
with applicable accounting standards and under the historical cost accounting
convention. Accounting policies consistent with those applied in the financial
statements for the year ended 30 September 2004 have been used in preparing the
unaudited interim results for the 6 months ended 31 March 2004 except that the
useful economic life of goodwill has been reviewed as explained below.
2. Goodwill
The directors have reviewed the useful economic life of goodwill at 31 March
2005 for durability in accordance with the provisions of Financial Reporting
Standard ('FRS') 10 and, as a consequence, no longer intend to provide for the
systematic amortisation of the cost of goodwill. An impairment review has been
carried out in accordance with FRS 10 which shows that the capitalised value of
the cash flows derived from future income streams is greater than the carrying
value shown in the Group's consolidated balance sheet at 31 March 2005.
Impairment reviews will, in future, be carried out at the end of each reporting
period. The non-amortisation of goodwill for the six month period to 31 March
2005 has had the effect of reducing the Group's operating loss for the period by
approximately �260,000.
3. Loss and net asset value per ordinary share
Six months Six months Year ended
ended 31 ended 31 ended 30
March March September
2005 2004 2004
(unaudited) (unaudited) (audited)
� � �
The calculation of loss per ordinary share is based on
the effective weighted average number of shares
in issue during the period 196,034,098 125,724,132 150,028,953
The adjusted loss per share is based on the loss
after tax and before goodwill amortisation:
Loss after tax and minority interests as reported 52,577 385,915 868,046
One off acquisition costs (less tax at 19%) - - (174,150)
Goodwill - (210,341) (462,280)
Loss before goodwill and one-off acquisition costs 52,577 175,574 231,616
The effect of the exercise of warrants in issue for the six months ended 31
March 2005 is anti-dilutive (March 2004, September 2004: no dilution).
The calculation of net asset value per ordinary share is based on a net asset
value of �11,784,956 (March 2004: �1,661,806, September 2004: �2,370,504) and
257,302,054 (March 2004: 134,802,054 , September 2004: 184,802,054 (2003:
106,665,690) ordinary shares in issue at 30 September 2004.
4. Notes to the statement of cash flows
(a) Reconciliation of operating loss to net cash outflow from operating activities
Six months Six months Year ended
ended 31 ended 31 ended 30
March March September
2005 2004 2004
(unaudited) (unaudited) (audited)
� � �
Operating loss (85,707) (387,987) (961,175)
Depreciation 29,611 33,330 66,907
Amortisation of intangible fixed assets 123 - 607
Amortisation of goodwill - 210,341 462,280
(Increase)/decrease in debtors (128,547) (106,999) (219,204)
Increase/(decrease) in creditors 85,882 (37,215) 34,415
(98,638) (288,530) (616,170)
(b) Analysis of changes in net funds
1 October 31 March 30 September 31 March
2003 Movement 2004 Movement 2004 Movement 2005
� � � � � � �
Cash at bank and in hand 306,919 322,577 629,496 (359,318) 270,178 9,967,318 10,237,496
Bank overdrafts (64,385) 13,680 (50,705) (3,947) (54,652) 54,652 -
Net cash 242,534 336,257 578,791 (363,265) 215,526 10,021,970 10,237,496
Liquid resources
Bank deposits - - - 750,000 750,000 (750,000) -
242,534 336,257 578,791 386,735 965,526 9,271,970 10,237,496
5. Dividends
The Directors are not declaring a dividend for the six months ended 31 March
2005.
6. Copies of interim results
Copies are available at the company's web site at www.gamingcorp.net. Copies may
also be obtained from the company's offices: Gaming Corporation plc, Third
Floor, York House, 78 Queen Victoria Street, London EC4N 4SJ.
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