L & G Reports $12.8 Million Pre-Tax Loss
Published: Thursday, March 22, 2007 Online-Casinos.com
LEISURE AND GAMING REPORTS PRE-TAX LOSS OF $12.8 MILLION
But restructuring in the wake of the US debacle has been successful and current trading is strong
Online gambling firm Leisure & Gaming plc has released its results for the year ending December 31, 2006. Turnover from continuing operations was $74.2 million in 2006, with the company reporting a pre-tax loss of $12.8 million. On a per share basis the company lost $0.21.
Results during the year were significantly impacted by the closure of the company's US division which it sold for a nominal fee of $1. The divestment was the result of a US law banning online gambling financial transactions coming into effect during the year under review. Closing the US business meant that the company incurred a retained loss of $104.5 million.
Highlights of the company's year were:
Significant growth from 2005 to 2006 in the company's main operating subsidiary, Betshop, including a 247 percent growth in turnover to $116.7 million on a like-for-like basis; 187 percent growth in net win to $27.4 million on a like-for-like basis and 200 percent growth in active customers to 44 750 customers on a like-for-like basis.
Continuing Operations' turnover of $74.2 million, mainly comprising Betshop's six month contribution, and pre-tax loss of $12.8 million after charging a full year of corporate overheads, exceptional restructuring and goodwill impairment charges
Successful restructuring of the company with significant cost reductions, including a 75 percent reduction in group central costs
Looking forward, the company detailed its plans to shift focus towards regulated markets generally and Europe specifically. The company's flagship European brand Betshop had total sales of $116.8 million on a pro-forma basis last year.
The company enjoyed a strong trading start to 2007 with results to 12 March ahead of management expectations that included turnover of $31.6 million, a pro forma increase of 101percent on the equivalent period in 2006; net win of $10.2 million, a pro forma increase of 98 percent on the equivalent period in 2006; the award of 58 new licenses to Betshop Italia (21 sports betting, 37 horse betting), allowing the company to broaden its product range and boosting the Betshop Italia to over 1100 retail outlets, 710 betting shops and 390 retail points of sale; new products such as scratchcards and poker and successful entry into the licensed Romanian market with the launch of a franchise network and revenue contribution expected in Q3 2007.
Commenting on current trading the company said that for the period running from January 1 to March 12, 2007, turnover was $31.6 million and gross profit was $3.1 million.
CEO Henry Birch said, "'2006 was a challenging year for L&G and the online gaming sector. Disposing of our US-facing assets dramatically impacted our business, but having successfully restructured our operations we are now well-positioned to capitalise on growth opportunities throughout Europe, particularly Betshop Italia's leading position in the Italian sports betting market.
"Comparative trading for 2006 over the previous year shows triple digit growth and we are delighted that trading this year is already ahead of management expectations. Our business model, combining online operations with a land-based franchise network, allows us to enter new markets and grow rapidly with minimal capital outlay. The recent ECJ judgment in the Placanica case is encouraging for L&G, as it implies that further European betting markets will be forced to open up and liberalise."
