RNS Number:7153B
Betcorp Limited
20 April 2006
BETCORP LIMITED
AIM / ASX / Media Announcement
BETCORP ANNOUNCES DOUBLING OF PROFIT FOR Q1 2006
Betcorp Limited (LSE/ASX: BCL) is pleased to announce unaudited results for the
three months ended 2 April 2006.
FINANCIAL HIGHLIGHTS
* Total betting turnover up 58% to US$287m (Q1 2005: US$181m)
* Gross revenue from players up 113% to US$14.9m (Q1 2005: US$7m)
* Profit after tax up 140% to US$3.6m (Q1 2005: US$1.5m)
* Basic earnings per share up 87% to 18.2 US$ cents (Q1 2005: 9.7 US$
cents)
* Net current assets of US$10.4m (Q1 2005: US$1.4m)
BUSINESS HIGHLIGHTS
* Sports betting margin of 8.33% (Q1 2005: 4.41%)
* Sports betting revenues up 76% to US$9.7m (Q1 2005: US$5.5m)
* Casino revenues up 138% to US$3.1m (Q1 2005: US$1.3m)
* Poker rake up US$1.9m to US$2.1m (Q1 2005: US$0.2m)
* Operating expenses down to 33% of net revenue from players (Q1 2005:
50%)
* Purchase of sports book source code completed April 2006
Betcorp has achieved a record quarterly profit of US$3.6m (Q1 2005: US$1.5m) as
the trading momentum established in the second half of 2005 has been maintained
through the first quarter of 2006. Excellent results were achieved in all
business areas including an outstanding performance in sports betting, where a
series of favourable results in all major sports contributed to a gross margin
rate for the quarter of 8.33%. This is significantly above long-term levels
although improved trading margins were expected from the move towards a broader
recreational client base.
A summary of the Group's quarterly trading performance is presented below.
2005 2006
Q1 Q2 Q3 Q4 Q1
US$000 US$000 US$000 US$000 US$000
Turnover
Sports betting 123,884 104,347 97,803 151,183 116,286
Casino 57,071 57,192 76,687 153,251 168,510
Poker 244 403 1,107 1,862 2,058
Total turnover 181,199 161,942 175,597 306,296 286,854
Gross revenue
Sports betting 5,460 3,966 4,971 4,448 9,691
Casino 1,256 1,239 1,502 2,903 3,108
Poker 244 403 1,107 1,862 2,058
Total gross revenue 6,960 5,608 7,580 9,213 14,857
Gross margin rate
Sports betting 4.41% 3.80% 5.08% 2.94% 8.33%
Casino 2.20% 2.17% 1.96% 1.89% 1.84%
The casino business continued to grow with turnover of US$168m, up 194% from
US$57.1m in Q1 2005, and gross margin of US$3.1m (Q1 2005: US$1.3m). Growth was
assisted by the launch of a third casino in February and the addition of casino
games into the poker room on 9 March 2006.
Gross poker rake was US$2.1m (excluding poker room casino income) against
US$244,000 in Q1 2005 and US$1.9m in Q4 2005. While the recruitment of full rake
paying clients continued, the Betholdem brand came under pressure from other
sites offering rake back payments to existing clients. The Company anticipated
this development and is responding accordingly.
OUTLOOK
In March, the Company's shares were admitted to trading on the AIM market of the
London Stock Exchange and shortly afterwards, a share placing to introduce
several blue chip UK institutional investors to the Company's share register
raised US$5.6m after expenses. The introduction and placing have increased
investor awareness of Betcorp in UK capital markets and will provide the Group
with access to the capital required to fund its future acquisition strategy.
The Company's policy is to migrate future acquisitions wherever practicable onto
an integrated software platform to maximise economies of scale and minimise
ongoing operating costs. To facilitate this, the Company has completed the
purchase from IQ-Ludorum plc of the source code for its sportsbook platform for
a sum equivalent to three years' annual licence fees. The Group has been using
this software successfully for over five years.
A new European facing website will be launched during April under the Group's
BetBet.com label offering multi-currency payment processing with a greater
emphasis on non-American sports and actively targeting customers from outside of
North America.
Commenting on the results, Colin Walker, Chief Executive Officer said:
"We are delighted to have started 2006 on such a positive note with a record
quarterly result. The Group has moved to a new level of profitability and our
AIM admission has already increased investor awareness of the Group's future
potential."
Thursday 20 April 2006
For further information please contact:
Betcorp Limited
Colin Walker, Chief Executive Officer colin@betcorpplc.com
Charles Moore, Chief Financial Officer charlesm@betcorpplc.com
CPR Communications, Sydney (Investor Relations/Media - Australia)
Martin Cole m.cole@cprcomm.com.au
Tel: +61 2 8213 3082
College Hill Associates, London (Investor Relations/Media - UK)
Tom Baldock tom.baldock@collegehill.com
Tel: + 44 20 7457 2020
About Betcorp
Betcorp is an online gaming group offering customers a comprehensive range of
betting and gaming products. Customers can move seamlessly between Betcorp's
choice of casinos, sports betting and poker room. The Group's trading operation
is headquartered in Antigua, West Indies and its IT and marketing divisions are
based in Toronto, Canada. Betcorp is incorporated in Australia and holds a
gaming licence in Antigua and a bookmaker's permit in the UK. The Company's
shares are listed on both the Australian Stock Exchange and on the AIM market
of the London Stock Exchange under the symbol "BCL". Further details can be
found at the Company's website www.betcorp.com.au or www.betcorpplc.com.
.
Betcorp Limited
First Quarter 2006 Unaudited Results Summary
Three Months Ended 2 April 2006
91 days 91 days Movement
2 Apr 2006 3 Apr 2005 %
A$'000 20,096 8,949 125%
Revenue from ordinary activities US$'000 14,857 6,960 113%
Profit / (loss) from ordinary activities after tax A$'000 4,864 1,914 154%
attributable to members US$'000 3,596 1,489 142%
Basic earnings per share A$ cents 24.6 12.5 97%
US$ cents 18.2 9.7 87%
Diluted earnings per share A$ cents 22.3 11.4 96%
US$ cents 16.5 8.9 86%
As at As at Movement
2 Apr 2006 3 Apr 2005 %
Net tangible assets per share A$ cents 77.3 9.5 714%
US$ cents 55.4 7.3 659%
The first quarter results have been prepared in accordance with International
Financial Reporting Standards ("IFRS") and in US dollars, the reporting currency
of the Group. The results shown in the above table have been translated into
Australian dollars for illustrative purposes only. Revenues, profits and losses
have been translated using the average exchange rates prevailing during each
reporting period. Net tangible assets per share have been translated using the
exchange rate prevailing at each balance sheet date.
Cash Flow Summary
CONSOLIDATED
First Quarter ended 2 April 2006
US$'000 US$'000
Cash and cash equivalents at beginning of period 8,693
Proceeds from issue of shares 6,240
Cost of shares issued (650)
Net proceeds of capital raising 5,590
Purchase of property plant and equipment (99)
Profit after tax 3,596
Add non-cash charges 195
3,791
(Increase) / Decrease in receivables 705
(Increase) / Decrease in other assets (458)
Increase / (Decrease) in trade and other payables (2,670)
Net cash flows from operating activities 1,368
Cash and cash equivalents at end of period 15,552
Betcorp Limited
Condensed Unaudited Income Statement
Three Months Ended 2 April 2006
CONSOLIDATED
91 days 91 days 364 days 368 days
2 Apr 2006 3 Apr 2005 1 Jan 2006 2 Jan 2005
Notes US$'000 US$'000 US$'000 US$'000
Gross revenue from players 2 14,857 6,960 29,361 20,662
Costs directly associated with gross revenue from
players (2,581) (1,409) (5,682) (4,063)
Net revenue from players 12,276 5,551 23,679 16,599
Other income 3 52 197 456 408
Advertising and marketing (4,492) (1,274) (8,328) (7,238)
Operating expenses (4,045) (2,771) (10,794) (17,403)
Share options charge (68) (4) (123) (18)
Profit / (loss) from continuing operations before
depreciation, taxation and finance costs 3,723 1,699 4,890 (7,652)
Depreciation (119) (145) (521) (654)
Amortization of intangible (8) (5) (29) -
assets
Profit / (loss) from continuing operations
before taxation and finance costs 3,596 1,549 4,340 (8,306)
Finance costs - (60) (74) (167)
Profit / (loss) from continuing operations
before taxation 3,596 1,489 4,266 (8,473)
Taxation - - (1) 438
Profit / (loss) from continuing operations after
taxation and attributable to members of the
parent entity 3,596 1,489 4,265 (8,035)
Earnings per share
(US$ cents per share)
Basic 4 18.2 9.7 23.4 (54.0)
Diluted 4 16.5 8.9 23.4 (54.0)
Betcorp Limited
Condensed Unaudited Balance Sheet
As at 2 April 2006
CONSOLIDATED
As at As at
2 Apr 2006 1 Jan 2006
Notes US$'000 US$'000
ASSETS
Non-current assets
Property, plant and equipment 1,020 1,040
Intangible assets 39,240 39,248
Total non-current assets 40,260 40,288
Current assets
Cash and cash equivalents 15,552 8,693
Trade and other receivables 5,591 6,296
Other assets 844 386
Total current assets 21,987 15,375
TOTAL ASSETS 62,247 55,663
LIABILITIES
Current liabilities
Trade and other payables 11,256 13,926
Total current liabilities 11,256 13,926
Net current assets / (liabilities) 10,731 1,449
TOTAL NET ASSETS 50,991 41,737
EQUITY
Issued capital 5 61,089 55,499
Accumulated losses (10,428) (14,024)
Share options reserve 330 262
TOTAL EQUITY 50,991 41,737
Betcorp Limited
Condensed Unaudited Cash Flow Statement
Three Months Ended 2 April 2006
CONSOLIDATED
91 days 91 days 364 days 368 days
2 Apr 3 Apr 1 Jan 2 Jan
2006 2005 2006 2005
US$'000 US$'000 US$'000 US$'000
Cash flows from operating activities
Gross win from players 14,857 6,960 29,361 20,662
Interest income received 65 30 102 177
Payments to suppliers and employees (13,554) (8,845) (27,841) (25,477)
Borrowing costs - (60) (74) (167)
Net cash flows from operating activities 1,368 (1,915) 1,548 (4,805)
Cash flows from investing activities
Disposal of Sportsbet Pty Ltd - - - (810)
Purchase of property, plant and equipment (99) (21) (570) (658)
Acquisition of subsidiary, net of cash
acquired - 1,439 (2,692) -
Net cash flows used in investing activities (99) 1,418 (3,262) (1,468)
Cash flows from financing activities
Proceeds from issue of shares 6,240 - 3,664 423
Cost of shares issued (650) - (224) (3)
Repayment of convertible debt - - - (679)
Equity dividends paid - - - (1,706)
Net cash flows from financing activities 5,590 - 3,440 (1,965)
Net increase/(decrease) in cash and cash equivalents 6,859 (497) 1,726 (8,238)
Cash and cash equivalents at beginning of period 8,693 6,967 6,967 15,205
Cash and cash equivalents at end of period 15,552 6,470 8,693 6,967
Betcorp Limited
Notes to the Unaudited First Quarter 2006 Results
Three Months Ended 2 April 2006
1) BASIS OF PREPARATION OF THE UNAUDITED FIRST QUARTER RESULTS
The unaudited first quarter results have been prepared in accordance with the
accounting policies set out in the Consolidated Financial Report and Appendix 4E
for the Year Ended 1 January 2006 and in compliance with International Financial
Reporting Standards ("IFRS").
The unaudited first quarter results as presented herein do not include all notes
of the type normally included within the annual financial report and therefore
cannot be expected to provide as full an understanding of the financial
performance, financial position and financing and investing activities of the
consolidated entity as the annual financial report.
The unaudited first quarter results should be read in conjunction with the
annual financial report of Betcorp Limited for the year ended 1 January 2006.
It is also recommended that the unaudited first quarter results be considered
together with any public announcements made by Betcorp Limited and its
controlled entities during the three months ended 2 April 2006 in accordance
with the continuous disclosure obligations arising under the Corporations Act
2001.
2) GROSS REVENUE FROM PLAYERS
CONSOLIDATED
91 days 91 days 364 days 368 days
2 Apr 2006 3 Apr 2005 1 Jan 2006 2 Jan 2005
US$'000 US$'000 US$'000 US$'000
Turnover
Sportsbook 116,286 123,884 477,217 586,569
Casino 168,495 57,071 344,201 206,691
Betting turnover 284,781 180,955 821,418 793,260
Poker 2,058 244 3,605 215
Skill games 15 - 11 -
Total turnover 286,854 181,199 825,034 793,475
Gross revenue from players
Sports betting 9,691 5,460 18,845 16,753
Casino 3,093 1,256 6,900 3,694
Betting gross revenue 12,784 6,716 25,745 20,447
Poker 2,058 244 3,605 215
Skill games 15 - 11 -
Total gross revenue from players 14,857 6,960 29,361 20,662
3) OTHER INCOME
Interest received 65 30 102 177
Foreign exchange (loss) / gain (13) 167 354 231
Total revenues from non-operating 52 197 456 408
activities
Betcorp Limited
Notes to the Unaudited First Quarter 2006 Results
Three Months Ended 2 April 2006
4) EARNINGS PER SHARE
The calculation of basic earnings per share is based on the profit / (loss) from
continuing operations after taxation and attributable to the members of the
parent entity, and the weighted average number of shares in issue during the
period.
The calculation of diluted earnings per share is based on the profit / (loss)
from continuing operations after taxation and attributable to the members of the
parent entity, and the weighted average number of shares in issue during the
period, adjusted to assume the full issue of share options in issue, to the
extent that they are dilutive.
91 days 91 days 364 days 368 days
2 Apr 2006 3 Apr 2005 1 Jan 2006 2 Jan 2005
Number Number Number Number
Basic earnings per share
Weighted average number of shares in issue 19,792,081 15,317,398 18,206,635 15,216,011
during the period
Diluted earnings per share
Weighted average number of shares in issue 21,769,690 16,770,057 18,206,635 15,216,011
during the period adjusted as above
5) ISSUED CAPITAL
Number US$'000
Ordinary shares
2 January 2005 Opening balance 153,173,979 49,397
22 April 2005 Issued by private placing 22,500,000 3,494
Less costs of issue (224)
22 April 2005 Issued in exchange for issued share capital of Sinsational
Intertainment Inc 18,360,000 2,495
4 August 2005 Issued pursuant to a subscription agreement entered into in
December 2002 897,959 170
30 December 2005 Issued in full and final settlement for issued share capital
Sinsational Intertainment Inc 1,230,175 167
1 January 2006 Issued and fully paid 196,162,113 55,499
16 February 2006 1 for 10 share consolidation 19,616,257 55,499
24 March 2006 Issued by private placing 1,600,000 6,240
Less costs of issue (650)
2 April 2006 Issued and fully paid 21,216,257 61,089
This information is provided by RNS
The company news service from the London Stock Exchange
END
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