Software Provider World Gaming Coming Right

Published: Friday, March 04, 2005 Online-Casinos.com

WORLD GAMING COMING RIGHT

New trading statement shows some progress - and an AIM listing?

After a long climb back to corporate health, and some tough restructuring it appears that turnkey provider World Gaming is making a solid comeback.

Releasing a trading statement in respect of its year ended December 31, 2004, the UK-based company reports that it expects earnings before interest, depreciation and extraordinary gains of between $6.0 million and $6.5 million (2003: $4.5 million) equating to basic earnings per ordinary share of between 18 and 20 cents per ordinary share for the year.

During the fourth quarter of 2004, a transaction with Sportingbet plc gave that group an interest in the WG's software for a finite period. In the fourth quarter of 2004 and for the full year to December 31, 2004, this transaction has resulted in an extraordinary one time gain expected to be in the region of $12.0 million - 12.3 million after charging associated costs, and WG expects net profit relating to the Sportingbet transaction of between $17.0 million and $18.0 million for the year ended December 31, 2004.

The result of the transaction is that WG no longer receives royalty fees from Sportingbet. However, it also no longer has the costs associated with the entire development group and is receiving hosting revenues equal to Sportingbet's usage with a 10 percent mark-up (estimated to be $2.5 million in the twelve months following the date of the transaction).

Fourth quarter royalty revenues from continuing licensees have grown approximately 28 percent when compared to the same period last year. Like-for-like operating costs after taking into account the hosting cost recovery have reduced approximately 66 percent despite one-off professional and other costs incurred in the quarter.

Basic earnings per share have been calculated on approximately 32.4 million shares. It should be noted that as a result of the transaction described above, shares previously held by Sportingbet PLC of approximately 13.5 million have no voting or economic rights all of which in aggregate can be acquired by the company for $1 at which time it has positive retained earnings to do so and have therefore been excluded.

The first quarter of 2005 has apparently been encouraging enough to meet with management's expectations and growth trends experienced in the fourth quarter of 2004 are continuing in 2005. In addition, the Company continues to make progress with the strategies outlined at its 2004 Annual General Meeting. In this regard, World Gaming will be updating shareholders over the coming weeks with progress in respect of its listing on the Alternative Investment Market (AIM) of the London Stock Exchange.