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."