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Chairman's Statement
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5 CHAIRMAN'S STATEMENT In my first year end statement as Chairman, I am happy to report that the Group has had a successful year, managerially, operationally and financially, particularly in light of the challenging worldwide economic climate. Results Financially, the Group has achieved significant growth in Net Gaming Revenue to c50.1 million (2007: c42.6 million). Profits before tax also increased to c16.9 million (2007: c16.6 million), despite a substantial growth in affiliate costs and infrastructure. Operations Over the last two years Gaming VC has become less dependent on outsourcing and has evolved into a more mature operating company with industry-leading staff and resources in Malta, Italy, and Israel. The team now in place will allow the Group to continue to grow its existing business and seek new opportunities and acquisitions, which the Board deems appropriate. Regulatory As more fully reported in the Chief Executive's Statement, the Group holds gaming licenses in Malta, Italy and the Netherlands Antilles, and believes it has the necessary licenses to conduct its current gaming operations. That said, there remains a lack of legal clarity among members of the European Union on the issue of European regulation, and this therefore continues to pose an unquantifiable risk to GVC. Strategy The Group's strategy is to continue to diversify to reduce its reliance on one marketplace; to seek to make non-dilutive acquisitions; and to maintain its dividend. The Board is recommending a final dividend of c0.20 per share, giving a total distribution of c0.40 per share. The final dividend will be paid on 29 May 2009 to all shareholders on record at the close of business on 1 May 2009. Management The Group has recently appointed two experienced industry executives to the Board. Karl Diacono, a Non- Executive Director based in Malta, who provides the Board with critical regulatory and corporate knowledge regarding Malta, where Gaming VC holds its primary gaming license. Karl now also chairs the Audit Committee. Richard Cooper, Group Finance Director, was previously the CFO of Trident Gaming where he was instrumental in building and managing for the company, a portfolio of online gaming assets including Gamebookers, which was subsequently sold to PartyGaming. His prior experience of quoted companies together with gaming and M&A expertise should prove invaluable as the Group develops. Current Trading The impact of the current economic crisis on the Group is difficult to forecast. In line with other industry players Gaming VC did experience some decline in volumes during the fourth quarter of 2008. However, in the first quarter of 2009 the Group has begun to see recovery in volumes and is cautiously optimistic of its trading prospects for the year as well as beyond. Lee Feldman Chairman 20 April 2009