Sector news
L&G 2009 prelims
22 April 2010
Leisure & Gaming has announced progressive preliminary results for 2009 at a time when the regulator in the core Italian market has published figures showing the gaming market growing by 20% and the imminent regulation of casino and cash poker games is expected to provide significant further growth opportunities.
Financial highlights
• Amounts staked €81.1m (2008: €76.9m)
• Net win €24.7m (2008: €20.6m)
• Net win margin 30.5% (2008: 26.8%)
• Gross profit €6.8m (2008: €6.2m)
• Operating profit before interest, foreign exchange (loss)/gain, tax and depreciation & amortisation €2.5m (2008: €1.5m)
• Cash held at banks, excluding borrowings, €1.6m (2008: €1.5m)
• Cash held as security for guarantees for Italian licenses €1.6m (2008: €2.2m)
Operational Highlights
• Italian active partner network increased by 45 to 529 (2008: 484).
• Cyprus partner network increased to 49 (2008:47)
• Betshop poker has gained 13,500 customers since launch in November 2008
• New Greek online marketing partner appointed
• Expanded call centre capacity securing hub in Reggio Calabria
• Continued development of proprietary IT platform for the B2B market
Richard Creed, CEO of Leisure & Gaming plc, commented, "It’s pleasing that 2009 has seen a solid performance given that a deal of time and energy has been dedicated to laying the groundwork for future revenue streams and seeking resolution of a number of legacy issues. The Group continues to diversify its product offerings in order to reduce its dependence on sports betting. The development of our B2B offering, using proprietary betting software, is generating many leads and the fees earned through the use of existing assets will serve to reduce the risks associated with sports betting.
We are also looking at expanding into other European markets and continue to monitor opportunities. Going forward the Group aims to enhance its position as a major European gaming operator and views 2010 as a year of investment, the benefits of which are expected from 2011 onwards.”
L&G interim chairman, Colin Eastaugh, reported, ”In terms of financial performance, 2009 was a successful year with increases being recorded in both turnover and profits over the previous financial year. Operating profit before impairment rising to €2.1m in 2009 from €1.2m in 2008 and a loss of €1.7m in 2007 highlights the progress the Group has made over the last two years.
Profits would have been enhanced in 2009 if bad weather in Italy had not disrupted the football fixtures in Serie A & B at the end of the financial year. However, in contrast to the short-term variations we see in our net win margins on sports betting, the earnings from other gaming products in particular poker, provide us with a constant income stream each week. Our strategy to reduce exposure to the fluctuating returns from sports betting will require continuing investment.
We are now looking to build on what we have achieved in the recent past; the key individuals are excited about the future.”
Reporting on the first quarter of 2010, Richard Creed found further justification for the Group’s diversification strategy. “This year’s first quarter saw disappointing margins on sports betting as the dominant teams in the Premiership and European football leagues recorded consistent success throughout the quarter, contrasting with margins seen in Q1 2009, when these teams regularly failed to win. This further emphasises the need to continue with our strategy of product and geographic diversification, thereby improving revenue stability.
I fully support Colin Eastaugh’s view that the relationship between risk and reward has improved over the last 24 months, a period where L&G has demonstrated that it can trade profitably during a period of worldwide recession. “
