World Gaming Turnaround On Track
Published: Friday, May 06, 2005 Online-Casinos.com
WORLD GAMING TURNAROUND ON TRACK
Latest results continue to show improvement
World Gaming plc, the UK-based Internet-gaming software and e-business
services group of companies has released its financial and operating results for
the year ended December 31, 2004 showing increased operational profits and significant
gains in other areas of its business.
The report showcases some interesting
highlights, indicating that the turnaround at this once endangered business is
well advanced:
Profit from operations for the year of $5,183,000 vs.
$2,127,000 for the same period last year.
Royalty revenue from continuing
licensees (excluding Sportingbet) up 41% percent in 2004 compared to prior year.
Operating expenses slashed 31 percent in 2004 compared to prior year.
Completion of Joint Venture transaction with Sportingbet resulting in
extraordinary gain of $12,187,000 in 2004 and further minimum $16,000,000 committed
development spend.
Net working capital of $14,866,000 at December 31,
2004 vs. ($126,000) at December 31, 2003.
Nil debt at December 31, 2004
vs. $2,944,000 at December 31, 2003.
Phased software re-architecture
project expected completion mid-2005.
Company admission to AIM of the
London Stock Exchange expected May 2005.
Wagering volumes significantly
up.
Savings achieved by closing financial transaction and client services.
Gross wagering volumes increased 63 percent to $6.2 billion when compared
to $3.8 billion in the prior year. Growth in wagering volume from continuing licensees
(excluding Sportingbet) was 73 percent in the year. Subsequent to the end of the
year, growth in revenues from continuing licensees has continued to exceed the
growth levels of 2004.
Since October 1, 2004 Sportingbet pays the WG
for its usage of the company's hosting facility. The payment is on a cost plus
10% basis and amounted to revenue of $621,000 in the year compared to $nil in
2003.
To compensate for no longer paying the World Gaming royalties,
Sportingbet is paying a total cash consideration of $10 million on terms, has
cancelled its $900,000 convertible debt with the Company and effectively cancelled
its interest in 29.6 percent of WG's equity giving rise to an extraordinary gain
in the year of $12,187,000.
In addition, Sportingbet is committed to
spending a minimum of $16,000,000 on development over a four year period commencing
October 1, 2004 and will pay a further $3,000,000 if the Joint Venture arrangement
is terminated. The Company retains its right to the most up-to-date version of
the software throughout the term of the Joint Venture arrangement or at such time
as it may be terminated.
The report reveals that extensive software re-engineering
has continued, with an expected pahased introduction from mid-2005. This re-architecture
will allow greater flexibility in product offerings to new licensees and greater
ease for ‘plug-in' of new products. A single integrated player account will
remain across the entire product suite.
Consistent with the Board's strategies,
the company is continuing with its licensing efforts, is proceeding with listing
the company's shares on The Alternative Investment Market (AIM) of the London
Stock Exchange and exploring business opportunities through acquisition.
Daniel Moran, World Gaming's CEO and the man who masterminded the company's
turnaround comments:
"World Gaming is profitable, debt free and
has strong cash reserves. Together with the listing on AIM we believe the company
is well positioned to successfully execute our strategies. We have a proven management
team that is highly motivated in taking the Company to the next stage of development.
I am delighted with the progress made in 2004 which is demonstrated by results,
both financial and strategic."
