In the 2007 ˘nancial year there were no signi˘cant one-off jackpot winners on the Group’s slot machine
games with associated ‘‘progressive’’ jackpots. The total of the available jackpots at the end of December
2007 was C3.2 million (2006: C2.2million) with the largest available individual jackpot being
C1.6 million (2006: C1.3 million).
The Group operating pro˘t before exceptional items and share option charges for the ˘nancial year
ended 31 December 2007 increased by 28% to C17.3 million (2006: C13.5 million) after the deduction
of distribution and administrative expenses. The Group incurred no exceptional charges in the year
(2006: C41.5 million) and generated an operating pro˘t before ˘nancing of C16.5 million (2006: loss of
Distribution costs of C5.8 million (2006: C7.1 million) reŁect the savings generated due to the change in
customer recruitment from direct mail to af˘liate marketing which have been partly offset by the
additional costs of C1.0 million for the 2007 sportsbook launch.
The major items within the administrative expenses incurred (excluding amortisation) during the
˘nancial year are detailed below:
Employment costs 2,886 3,434
Travel 548 886
Legal, accounting and tax 2,432 1,682
All other costs 990 775
Total administrative expenses 6,856 6,777
Employment costs are analysed in note 2 to the ˘nancial results.
Within the legal, accounting and tax costs for 2007 are expenses related to the acquisition of the Maltese
operating licences in the year.
The amortisation of intangible assets is detailed in note 6 to the ˘nancial results. This is a non-cash
charge primarily to reŁect the reduction in economic value over the useful lives of these assets.
Net ˘nancing income for the ˘nancial year of C0.1 million (2006: net ˘nancing income C0.1 million) are
analysed in note 3 to the ˘nancial results. The majority of Group revenues are in Euros, as are the majority
of both the cost of distribution and administration.
Due to the increased levels of business in both Malta and Italy projected in 2008 compared to 2007, it is
estimated that Gaming VC will increase its tax charge from a current base level of 2% of operating pro˘ts
to closer to 5% in 2008. The ˘nal charge will depend on both the markets where growth is achieved and
future developments on taxation in the domiciles Gaming VC operates in.
In the reporting period the Group generated C19 million (2006: C17.9 million) of cash Łows from
operating activities. After payment of the dividends totalling C12.2 million during the year, the Group’s
closing cash balance as at 31 December 2007 was C15.9 million (2006: C9.4 million). Capital
expenditure in the ˘nancial year across the Group was C0.6 million (2006: C0.3 million) which primarily
reŁects new equipment and software related to the setting up of the Maltese operations. A similar level of
capital expenditure is envisaged in 2008 relating to the acquisition of the Italian licence and the
establishment of an in-house customer service centre.
The Board is recommending a ˘nal dividend of C0.20 (c. »0.16) giving a total distribution of C0.40
(c. »0.29) for the current ˘nancial year (2006: C0.384 and 0.26). This ˘nal dividend will be paid on
30 May 2008 to all shareholders of record at the close of business on 9 May 2008.
During the ˘rst three months of the 2008 ˘nancial year trading has been slightly ahead of expectations
due to both resilience in the German casino business and better than expected Sportbook performance.
The total revenues are 12% ahead of the same period in the previous year and 6% more funded accounts
have been recruited. Compared to the fourth quarter of 2007 revenue is 23% higher and there have
been 3% more funded accounts recruited.