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Annual Report & Accounts 2012 - CHAIRMAN'S STATEMENT
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GVC HOLDINGS PLC BUSINESS REVIEW 2012 was yet another year of increased financial performance and returns for our shareholders. There were two increases in dividends: 11€cents paid in May 2012 (May 2011: 10€cents) and 15€cents paid in November 2012 (November 2011: 10€cents). The Group, along with William Hill plc, commenced its discussions with Sportingbet plc in the third quarter of 2012, and I am delighted to be able to say that this transaction completed on 19 March 2013. This transaction is transformational for the Group as it cements the Group's reputation as a dealmaker in gaming markets and mitigates revenue sharing on the B2B transaction completed in November 2011 with Sportingbet and third party partner, East Pioneer Corporation BV ("EPC"). Indeed, the resulting revenue in the first two months of 2013 would have amounted to €6.4 million, an annual "run-rate" in excess of €38 million. In 2013, owing to certain changes in accounting rules and the impact of the Sportingbet acquisition, the Group will be obliged to fully consolidate the results of EPC. With that in mind, the Group refers in these financial statements to a new measure, Pro-Forma Revenues ("PFR") along with Net Gaming Revenue ("NGR"). PFR refers to the underlying level of sports wagers, sports NGR and gaming and other revenues enjoyed by EPC of which, up to 19 March 2013, the Group received a 25% share net of certain costs and adjustments. This is discussed in more detail in the Report of the Group Finance Director. The Group disposed of Betaland during 2012 to an unrelated third party and the results of this are shown as discontinued activities. I am also pleased to announce that shortly before these Financial Statements were approved, the Group reached an amicable settlement with Boss Media which has led to a credit to the income statement as an exceptional item. Changing online gaming regulatory constraints continue to cast uncertainty, and the Board keeps a close eye on regulatory developments. The management team of the Group is now focused on the key task of integrating and restructuring the Sportingbet Retained Business in the year ahead. I am also pleased to report that in the 83 days to 24 March 2013, current trading for the existing GVC business excluding Sportingbet has got off to a strong start with average PRF per day reaching €348k, 27% higher than in the same period in 2012. The Group will be holding its Annual General Meeting in the Isle of Man on Wednesday 8 May 2013 and issuing a trading update at that time. Lee Feldman Chairman and Non-Executive Director 25 March 2013 5 CHAIRMAN'S STATEMENT