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Annual Report & Accounts 2009 - Report of the Finance Director
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12 Review of Betboo Betboo generated NGR of c2.2 million in the six months since acquisition; c2 million from gaming (primarily bingo) and c0.2 million from sports from a 6.6% hold. It generated a contribution margin of c1.4 million (63%) and maintained break even. There is greater foreign exchange risk in the Betboo division due to a combination of currency use in Brazilian Real (BRL) and US$. Review of Central Costs d000's 2009 2008 2007 2006 Fort Knox - (384) 692 - Other 2,593 3,400 3,843 4,290 ------- ------- ------- ------- 2,593 3,016 4,535 4,290 ------- ------- ------- ------- Costs have continued to reduce over the last three years, with over c800k of savings being made during 2009. A rise in costs for 2010 is expected, however, due to the strategy to expand the business. Exceptional Items On 17 December 2009, the group announced the sale of GVC Corporation S.p.A., the owner of the loss making Betpro brand, for a nominal sum, to its management. The costs of this disposal, together with the write-off of various loans and balances, amounted to c1 million. Further group restructuring lead to the departure of certain long term contractors resulted in a one-off charge of c283k. The Group's CasinoClub division operates without a jackpot contribution scheme, taking all jackpot winnings directly to NGR with the exception of large amounts won and withdrawn in cash. During Q4-2009, a single customer withdrew c250k from his account after winning c303k. Depreciation and Amortisation Depreciation rose to c0.7 million from c0.4 million due to there being a full year's charge on the assets acquired in 2008 (c1,453k) together with depreciation on the current year's acquisitions (c436k). Of the total amortisation charge of c740k charge in the year, c607k was attributable to the acquisition of intangible assets in Betboo. Financial Income and Financial Expense The significant drop in Euro interest rates led to the fall in interest earnings during the year. The discounting of the deferred consideration arising from the acquisition of Betboo has to be unwound from the period of the earn-out to 30 September 2012. The charge arising in the six month period was c467k (2008: cnil). Taxation The taxation charge for the year remained static.