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Annual Report & Accounts 2009 - Report of the Finance Director
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10 Winzingo Retail bingo operation targeting Spanish players Licensed in Netherlands Antilles Operation outsourced to a third party agency Loss making in 2009 Overall Trends Group NGR has been increasing through the Group's launch into the Italian and South America markets. These generate significantly lower margins than the highly profitable, but mature, CasinoClub business. d000's H1-06 H2-06 H1-07 H2-07 H1-08 H2-08 H1-09 H2-09 CasinoClub 21,208 19,365 22,001 18,638 19,710 16,765 15,059 14,567 Betaland - - - 2,000 6,374 6,982 10,894 9,932 Winzingo - - - - 42 212 556 770 Betboo - - - - - - - 2,180 ------- ------- ------- ------- ------- ------- ------- ------- 22,001 20,638 26,126 23,959 26,509 27,449 ------- ------- ------- ------- ------- ------- ------- ------- Gaming 21,208 19,365 22,001 19,563 22,939 20,863 21,644 23,069 Sports - - - 1,075 3,187 3,096 4,865 4,380 ------- ------- ------- ------- ------- ------- ------- ------- 21,208 19,365 22,001 20,638 26,126 23,959 26,509 27,449 ------- ------- ------- ------- ------- ------- ------- ------- The group's CasinoClub business has been able to increase its contribution margins from 61% in H1-2007 to 69% in H2-2009 to help stem what would have been a faster decline in profitability from CasinoClub. Group gross profit rose 9% to c44.5 million (2008: c40.9 million) maintaining the gross profit ratio. d000's H1-06 H2-06 H1-07 H2-07 H1-08 H2-08 H1-09 H2-09 Clean Ebitda CasinoClub 10,973 9,746 12,351 12,494 13,051 10,805 9,507 8,892 Betaland - - - (327) (134) (1,097) 1,059 682 Winzingo - - - - (33) (28) (120) (102) Betboo - - - - - - - 103 ------- ------- ------- ------- ------- ------- ------- ------- 10,973 9,746 12,351 12,167 12,884 9,680 10,446 9,575 Central costs (2,095) (2,195) (2,073) (2,462) (2,024) (992)* (1,566) (1,027) ------- ------- ------- ------- ------- ------- ------- ------- 8,878 7,551 10,278 9,705 10,860 8,688 8,880 8,548 ------- ------- ------- ------- ------- ------- ------- ------- * after a credit of 2384k relating to the extant "Fort Knox" dispute Review of Expenditure* d000's Total CasinoClub Betaland Winzingo Betboo Central 2006 6,210 1,920 - - - 4,290 ------- ------- ------- ------- ------- ------- 2007 7,294 2,096 663 - - 4,535 ------- ------- ------- ------- ------- ------- 2008 8,386 1,986 3,384 - - 3,016 ------- ------- ------- ------- ------- ------- 2009 10,106 2,241 3,272 730 1,270 2,593 ------- ------- ------- ------- ------- ------- * Based on other operating costs and excluding share option charges, depreciation, amortisation and exceptional items. Other operating costs rose in the year due to incorporation of Winzingo and Betboo. Excluding these businesses, operating costs at c8.1 million were 3% lower than 2008 (c8.4 million). Included in these costs were foreign exchange differences of c170k (2008: c36k). There has been a significant reduction in central costs from c1.6 million in H1-09 to c1 million in H2-09. The costs are unlikely to shrink further.