Queenco Leisure International Ltd
19 November 2007
Queenco Leisure International Ltd
(the 'Company' or 'QLI'),
Third Quarter Results
Queenco Leisure International Ltd, (LSE: QLI), the emerging markets casino
developer and operator, is pleased to report its third quarter results for the 3
months ended 30 September 2007.
Financial Highlights
• Gross revenues increased 25.9% to € 53.8 million (Q3 2006: € 42.7 million)
• Net Revenues increased 27.5 % to € 39.6 million (Q3 2006: € 31 million)
• EBITDA increased by 28.9% to € 17.4 million (Q3 2006: €13.5 million)
• Profit before tax increased 48.3% to € 16.4 million (Q3 2006: € 11.1 million)
• EPS was up 31.6% to 2.5c (Q3 2006: 1.9c)
• Earnings per GDR (each GDR representing 10 ordinary shares) increased to
25c (Q3 2006: 19c)
Q3 2007 Contribution by Casino
+---------+-------------+---------------+-----------------+---------------+--------------+
|Casino | Net Revenue | EBITDA (EURm) | Visitors |Win per Visitor|QLI's Economic|
| | (EURm) | | | (EUR) | Interest |
+---------+-----+-------+-------+-------+--------+--------+---------+-----+--------------+
| |2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2007 |2006 | |
+---------+-----+-------+-------+-------+--------+--------+---------+-----+--------------+
| | | | | | | | | | |
+---------+-----+-------+-------+-------+--------+--------+---------+-----+--------------+
|Loutraki |49.4 | 39.0 | 23.6 | 17.4 |282,717 |239,086 | 251 | 233 | 35.7% |
+---------+-----+-------+-------+-------+--------+--------+---------+-----+--------------+
|Rodos | 8.9 | 8.3 | 4.5 | 4.4 | 57,648 | 53,209 | 217 | 218 | 91.6% |
+---------+-----+-------+-------+-------+--------+--------+---------+-----+--------------+
|Palace | 5.9 | 3.2 | 2.5 | 0.9 | 26,690 | 23,841 | 220 | 138 | 83.3% |
+---------+-----+-------+-------+-------+--------+--------+---------+-----+--------------+
Operating Highlights
• QLI won concession rights to a historic building in the Romanian seaside
resort of Constanta since the period end, which QLI intends to renovate and
operate as 'Casino Constanta'
• Also since the period ended, QLI increased its holding in Club Hotel
Loutraki ('CHL') to 40.3% through a buyout of minority interests
• Agreed to acquire a 50% holding in a Greek Company which has the rights
to build and operate a new luxury marina and leisure complex adjacent to
Casino Rodos
Dror Mizeretz, Chief Executive Officer of QLI, commented,
'We continue to deliver on our strategy of operating and developing new casinos
in emerging markets. In the third quarter we increased our shareholding in
Loutraki, announced plans to expand in Rodos, and moved a step closer to opening
a Casino in Constanta, Romania. We also remain on track to open a nightclub and
gaming hall operation in Prague early next year. The Group's financial
performance from its existing gaming operations continues to strengthen and we
look forward to completing a highly successful year for the Company and its
shareholders.'
Analyst Conference Call
Management will be holding a conference call for analysts at 9.00am GMT. The
call can be accessed by dialing:
UK Freephone: 0800 358 2705; International: +44 (0)20 8609 0205
Pin code: 193183#
Investor Conference Call
Management will be hosting a second conference call for investors at 4.00pm
(GMT) and 11.00am (Eastern Standard Time ) / 8.00am (Pacific Daylight Time). The
call can be accessed by dialing:
UK Freephone: 0800 358 2705; US Freephone: 1866 793 4279; International:
+44 (0)20 8609 0205
Pin code: 193183#
The conference calls will be accompanied by an analyst / investor presentation
available on the day of results for download on Queenco Leisure International
Limited's investor relations website: www.queencoleisure.com
For further information please visit www.queencoleisure.com or contact:
Queenco Leisure International Ltd.
Dror Mizeretz, CEO
Effy Aboudy, CFO
Tel: +972 375 45555
ING
Chris Godman
Tel: +44 (0)20 7767 6896
Cardew Group
Tim Robertson
David Roach
James Milton
Tel: + 44 (0)20 7930 0777
Chief Executive's Review
Introduction
We are very pleased to present QLI's third quarter results for the three months
ended 30 September 2007. During the period under review the company performed
strongly with net revenues and EBITDA up by 27.5% and 28.9% respectively.
At the end of this quarter we have successfully increased our holdings in CHL
through the acquisition of minority interests, taken a stake in the development
of a marina and leisure complex adjacent to Casino Rodos and won concession
rights to a historic building in Constanta which the Company plans to renovate
and operate as 'Casino Constanta'. We believe that this focus on continually
seeking to improve existing assets, combined with acquisitions of new gaming
concessions in emerging markets, will serve us well in continuing our track
record of growth.
At present, QLI has a controlling or significant interest in a portfolio of four
casinos operating in Greece, Romania and Serbia including: Club Hotel Casino
Loutraki ('Casino Loutraki'), 80 km west of Athens; Casino Rodos, the only
casino on the island of Rhodes; Casino Palace in the centre of Bucharest and
Casino Beograd, with an exclusivity licence for the next ten years, in Belgrade.
Financial Review
Gross revenues for the third quarter 2007 grew by 25.8% to €56.3 million (Q3
2006: €44.8 million). Net revenues grew by 27.5% to €39.6 million (Q3 2006: €31
million).
Gross gaming revenues grew 25.9% to €53.8 million (Q3 2006: €42.7 million),
reflecting our ability to increase win per visit across our operations and visit
numbers. Ancillary revenues also grew by 22.7% to €2.5 million (Q3 2006: €2
million), as part of our strategy to provide first-rate complementary guest
services such as hotels, restaurants and conference facilities.
EBITDA for the third quarter increased by 28.9% to €17.4 million (Q3 2006: €13.5
million), with EBITDA margins reaching 44.1%.
Exceptional costs for the three months ended 30 September 2007, included a
donation of €1 million from CHL to help those affected by the fires in Greece,
and ultimately affected the EBITDA attributable to the parent company by
approximately €1 million.
Net Profit for the third quarter increased by 50.7% to €12.3 million (Q3 2006:
€8.2 million). Profit before tax also increased by 48.3% to €16.4 million (Q3
2006: €11.1 million).
Basic and diluted pro forma EPS was up 31.6% to 2.5c for the period (Q3 2006:
1.9c) and earnings per GDR (each GDR representing 10 ordinary shares) increased
to 25c (Q3 2006: 19c).
Operational Review
Club Hotel Casino Loutraki ('Casino Loutraki')
Gross gaming revenues for the quarter grew 27.3% to €70.9 million (Q3 2006:
€55.7 million), while net revenues grew by 26.8% to €49.4 million (Q3 2006: €39
million). This growth has been driven by a positive market environment, together
with the investment which has increased the number of slot machines from 750 to
1,000. We expect growth to continue into the fourth quarter and 2008, driven by
the growing numbers of Greek nationals and foreign visitors to the casino.
During the period, the casino generated EBITDA of €23.6 million, an increase of
35.6% (Q3 2006: €17.4 million). EBITDA margins also improved to 47.8% from 44.6
%. Visit numbers increased by 18.2% to 282,717 (Q3 2006: 239,086) and total drop
for the period was €305.3 million with win €70.9 million.
Since the period ended, QLI increased its holding in CHL, the Holding Company of
Casino Loutraki from 35.7% to 40.3% through the buyout of minority interests.
Casino Rodos
Gross gaming revenues for the quarter increased by 7.8% to €12.5 million (Q3
2006: €11.6 million), while net revenues grew by 7.7% to €8.9 million (Q3 2006:
€8.3 million). These increases in revenues reflect the success of our marketing
strategies to attract a greater number of VIPs and visitors coming from mainland
Greece. As a consequence, the casino generated EBITDA of €4.5 million, an
increase of 2.3% (Q3 2006: €4.4 million), while still retaining strong EBITDA
margins of over 50%. Total drop for the period was €59.1 million with win €12.5
million. Visit numbers increased by 8.3% to 57,648 (Q3 2006: 53,209).
As part of our plans to continually improve our assets and their facilities, we
have agreed to acquire for a consideration of €5 million a 50% shareholding in a
Greek company from a consortium owned by third parties which has the rights to
build and operate a new luxury marina and leisure apartment complex on land
adjacent to the casino. The cost of the project is estimated to be approximately
€60 million which will be provided to the Greek company in the form of
non-recourse loans. The new complex will add to the appeal of the casino as a
tourist destination and support the continued growth of the business.
Casino Palace
During the third quarter, Casino Palace's gross gaming revenues grew 78.0% to
€5.9 million (Q3 2006: €3.3 million), while net revenues grew by 83.7% to €5.9
million (Q3 2006: €3.2 million). EBITDA also increased by 174.6% to €2.5
million, (Q3 2006: €0.9 million), which reflects the strong Romanian economy and
also includes a currency translation gain following our decision to switch to
gaming in Euros from US Dollars on 1 September 2007. This has had the effect of
reducing the risks of unfavourable exchange rates and also attracted more
visitors who generally prefer gaming in Euros. As a result, September was a
record month for Casino Palace and we remain confident that this decision,
combined with the growth in visitor numbers by 12% to 26,690 (2006: 23,841) will
enhance profitability in the final quarter and 2008.
Casino Beograd
Our newest casino, still in the development stage, began with a soft opening on
30 June 2007. The casino remains on track for the Grand opening at the beginning
of 2008, at which point the casino will operate 250 slots and 25 tables. Trading
has started well, with aggregated, unaudited gross revenues for the first three
months totalling €1.3 million and we look forward to benefiting from the
significantly expanded operation in the future.
Since QLI increased its holding in CHL, from 35.7% to 40.3% through the buyout
of minority interests, QLI has also increased its holding in Casino Beograd from
14.3% to 15.7%, as CHL is also the Holding Company for the Serbian operation.
New Projects
We are pleased with the progress being made on all of our new projects. In
particular, the development of the Prague nightclub and gaming hall which is
currently running to schedule and we anticipate opening the venue in the first
quarter of 2008.
In October we also announced that we had finalised the terms of the Concession
Agreement with Constanta Municipality, Romania, granting us concession rights
over a historic building in the seaside resort of Romania's second largest city,
which is also the main tourist destination for foreigners and locals alike. We
intend to renovate and operate the building as 'Casino Constanta', a
comprehensive leisure venue in its own right, with restaurants and other
entertainment facilities. The Agreement with Constanta Municipality lasts for an
initial period of 49 years, but grants QLI the option to extend the terms for a
further 24 years, subject to the consent of both the Company and Constanta
Municipality. Under the terms of the Agreement, QLI will invest approximately
€10 million and pay gross annual royalties of €140,000 to Constanta
Municipality. The building covers an area of 801m(2) and is located on
Constanta's beachfront. It was built in 1909, and declared a national
architectural treasure in 1956. QLI plans to open Casino Constanta in the second
half of 2009, which will operate approximately 24 gaming tables and 250 slot
machines.
Outlook
During the period, all of our casinos have continued to trade positively, and
have delivered significant uplifts across the key metrics. The Company is well
positioned as it enters the final quarter and expects to continue to benefit
from the positive Greek economy following a successful tourist season.
We are pursuing our developments in Prague and Belgrade, both of which are
scheduled for completion in 2008, and we continue to upgrade the facilities and
expand the operations of our existing casinos.
As a result, the Board remains confident that it can continue to grow gross
revenues and EBITDA into the final quarter of the year and beyond.
Dror Mizeretz
CEO, Queenco Leisure International Ltd
19 November 2007
Consolidated statements of income
(In thousands of €)
Year
3 months ended 30 9 months ended 30 ended 31
September September December
__________________ __________________ _______
2 0 0 7 2 0 0 6* 2 0 0 7* 2 0 0 6* 2 0 0 6*
_______ _______ _______ _______ _______
Unaudited unaudited Unaudited Unaudited
_________ _________ _________ _________
Revenue 39,556 31,021 103,747 86,972 119,858
Operating costs
Cost of revenues (14,397) (12,317) (40,755) (36,266) (48,874)
Selling and marketing
expenses (4,266) (3,409) (10,982) (8,203) (11,353)
General and administrative
expenses (5,353) (4,006) (14,058) (12,062) (16,258)
Other operating expenses - 216 (108) (611) (861)
Share of results of associates (310) 10 (723) (15) 86
_________ _________ _________ ________ _________
Operating profit 15,230 11,515 37,121 29,815 42,598
Investment income 1,958 203 2,505 1,319 1,188
Finance costs (984) (514) (2,197) (2,213) (2,476)
Foreign exchange gain (loss) 211 (134) (80) (122) (110)
_________ _________ _________ ________ _________
Profit before tax 16,415 11,070 37,349 28,799 41,200
Tax (4,132) (2,917) (11,323) (10,371) (14,761)
_________ _________ _________ ________ _________
Profit for the period 12,283 8,153 26,026 18,428 26,439
========= ========= ========= ======== =========
Attributable to:
Equity holders of the parent 8,851 5,835 16,768 11,614 17,241
Minority interests 3,432 2,318 9,258 6,814 9,198
_________ _________ _________ ________ _________
12,283 8,153 26,026 18,428 26,439
========= ========= ========= ======== =========
Earnings per share
Basic pro forma (c)** 2.5 1.9 5.1 3.7 5.5
========= ========= ========= ======== =========
Basic (c) 2.5 1.9 5.1 13.5 9.1
========= ========= ========= ======== =========
Diluted (c) 2.4 1.9 5.0 13.5 9.1
========= ========= ========= ======== =========
* The 2006, and nine months ended September 2006 and 2007, and three months
ended September 2006 amounts reflect the operations for the Group for each
period as if the reorganisation described in Note 1 had occurred at the
beginning of the reported periods.
** pro forma earnings per share have been calculated as if the equity issue
described in Note 3 had been performed at the beginning of the reported periods.
Consolidated Balance sheets
(In thousands of €)
As at
__________________________________
30 September 31 December
____________________ ___________
2 0 0 7 2 0 0 6* 2 0 0 6*
_________ _________ _________
unaudited unaudited
_________ _________ _________
Non-current assets
Intangible assets 7,563 5,566 5,290
Property, plant and equipment 91,045 93,665 85,589
Investment property 7,712 - 7,500
Interests in associates 7,430 250 212
Deferred tax asset 2,659 2,238 2,220
Other long term receivables 11,383 8,230 9,099
_________ _________ _________
Total non-current assets 127,792 109,949 109,910
_________ _________ _________
Current assets
Inventories 604 351 574
Investments 8,833 715 863
Trade and other receivables 4,147 2,071 2,921
Cash and cash equivalents 71,106 30,216 35,239
_________ _________ _________
Total current assets 84,690 33,353 39,597
_________ _________ _________
Total assets 212,482 143,302 149,507
_________ _________ _________
Current liabilities
Accounts payable (4,097) (3,254) (3,642)
Current tax liabilities (10,998) (9,407) (10,224)
Other current liabilities (21,960) (35,656) (37,376)
Bank overdraft and loans (12,725) (12,233) (11,984)
_________ _________ _________
Total current liabilities (49,780) (60,550) (63,226)
_________ _________ _________
Net current assets (liabilities) 34,910 (27,197) (23,629)
_________ _________ _________
Total assets less current liabilities 162,702 82,752 86,281
_________ _________ _________
Non-current liabilities
Long-term bank loans (11,117) (22,358) (21,910)
Other long-term liabilities (9,616) (7,127) (2,319)
Deferred tax (909) (434) (1,034)
Provision for retirement benefits (4,770) (3,916) (3,990)
_________ _________ _________
Total non-current liabilities (26,412) (33,835) (29,253)
_________ _________ _________
_________ _________ _________
Net assets (liabilities) 136,290 48,917 57,028
========= ========= =========
Consolidated Balance sheets (cont.)
(In thousands of €)
Shareholders' equity
Share capital 62,512 44,173 44,173
Share premium 130,998 84,827 84,827
Translation reserve 2,600 2,049 2,478
Accumulated Deficit (88,861) (91,676) (86,049)
_________ _________ _________
Equity attributable to equity holders of
the parent 107,249 39,373 45,429
Minority interest 29,041 9,544 11,599
_________ _________ _________
Total Equity 136,290 48,917 57,028
========= ========= =========
The financial statements were approved by the board of directors and authorised
for issue on 18 November 2007. They were signed on its behalf by:
Effy Aboudy Dror Mizeretz
Chief Financial Officer Chief Executive Officer
18 November 2007
* The 2006, and September 2006 amounts reflect the balance sheets of the Group
for each period end, as if the reorganisation described in Note 1 had occurred
at the beginning of the reported periods.
Consolidated statements of changes in equity
(In thousands of €)
Share Share Translation Retained Minority Total
Capital Premium reserve Earnings Parent Interest Equity
________ _______ ________ ________ _______ ________ _______
_______________________________________________________________________________________________________________
For the period beginning 1 January
2007 and ending 30 September 2007
(unaudited)
Balance as at 1 January 2007 44,173 84,827 2,478 (86,049) 45,429 11,599 57,028
Translation differences - - 122 - 122 51 173
Costs relating to the Romanian - - - (136) (136) - (136)
transaction under common control
Capital issue 7,175 46,171 - - 53,346 - 53,346
Expense resulting from grant of share
options - - 472 472 - 472
Issuance of shares in relation to the
Romanian transaction under common
control 11,164 - - (11,164) - - -
Conversion of capital notes to equity - - - - - 9,816 9,816
Purchase of minority interest - - - - - 5,468 5,468
Dividend - - - (8,752) (8,752) (3,495) (12,247)
Profit share due to the municipality
of Loutraki - - - - - (3,656) (3,656)
Net income for the period - - - 16,768 16,768 9,258 26,026
_______________________________________________________________________________________________________________
Balance as at 30 September 2007 62,512 130,998 2,600 (88,861) 107,249 29,041 136,290
_______________________________________________________________________________________________________________
For the period beginning 1 July 2007
and ending 30 September 2007
(unaudited)
Balance as at 1 July 2007 55,337 84,827 2,445 (98,184) 44,425 11,618 56,043
Translation differences - - 155 - 155 (131) 24
Capital issue 7,175 46,171 - - 53,346 - 53,346
Expense resulting from grant of share
options - - - 472 472 - 472
Conversion of capital notes to equity - - - - - 9,816 9,816
Purchase of minority interest - - - - - 5,468 5,468
Dividend - - - - - (38) (38)
Profit share due to the municipality
of Loutraki - - - - - (1,124) (1,124)
Net income for the period - - - 8,851 8,851 3,432 12,283
_______________________________________________________________________________________________________________
Balance as at 30 September 2007 62,512 130,998 2,600 (88,861) 107,249 29,041 136,290
_______________________________________________________________________________________________________________
For the period beginning 1 January
2006 and ending 30 September 2006
(unaudited)
Balance as at 1 January 2006 - - (3,247) (103,290) (106,537) 9,411 (97,126)
Capital issue 44,173 84,827 - - 129,000 - 129,000
Translation differences - - 5,296 - 5,296 (144) 5,152
Dividend - - - - - (3,655) (3,655)
Profit share due to the municipality
of Loutraki - - - - - (2,882) (2,882)
Net income for the period - - - 11,614 11,614 6,814 18,428
_______________________________________________________________________________________________________________
Balance as at 30 September 2006 44,173 84,827 2,049 (91,676) 39,373 9,544 48,917
_______________________________________________________________________________________________________________
For the period beginning 1 July 2006
and ending 30 September 2006
(unaudited)
Balance as at 01July 2006 44,173 84,827 2,487 (97,511) 33,976 8,342 42,318
Translation differences - - (438) - (438) (251) (689)
Profit share due to the municipality
of Loutraki - - - - - (865) (865)
Net income for the period - - - 5,835 5,835 2,318 8,153
_______________________________________________________________________________________________________________
Balance as at 30 September 2006 44,173 84,827 2,049 (91,676) 39,373 9,544 48,917
_______________________________________________________________________________________________________________
For the period beginning 1 January
2006 and ending 31 December 2006
Balance as at 1 January 2006 - - (3,247) (103,290) (106,537) 9,411 (97,126)
Capital issue 44,173 84,827 - - 129,000 - 129,000
Translation differences - - 5,725 - 5,725 222 5,947
Dividend - - - - - (3,871) (3,871)
Profit share due to the municipality
of Loutraki - - - - - (3,361) (3,361)
Net income for the year - - - 17,241 17,241 9,198 26,439
_______________________________________________________________________________________________________________
Balance as at 31 December 2006 44,173 84,827 2,478 (86,049) 45,429 11,599 57,028
======= ======= ======= ======= ======== ======= ========
_______________________________________________________________________________________________________________
Consolidated cash flow statements
(In thousands of €)
Year
3 months ended 30 9 months ended 30 ended 31
Note September September December
_________________ __________________ ________
2 0 0 7 2 0 0 6* 2 0 0 7* 2 0 0 6* 2 0 0 6*
_________ _________ _________ _________ ________
unaudited unaudited unaudited unaudited
_________ _________ _________ _________ ________
Net cash from operating
activities 4 12,633 8,592 30,629 23,393 35,941
_________ _________ _________ _________ ________
Investing activities
Interest received 1,967 203 2,514 610 478
Purchases of property, plant and
equipment (2,629) (7,077) (5,481) (14,278) (9,972)
Purchase of other intangibles - (2) (6) (14) (27)
Investment in an associate (2,895) - (7,560) - (20)
Proceeds on sale of marketable
securities - - - 1,750 2,465
Purchases of trading investments (7,864) - (7,964) - (147)
Money on deposit - - - - (715)
Instalments for the acquisition
of a subsidiary (714) - (714) - (714)
Loans made to associates (60) (308) (1,963) 450 (60)
Investment in subsidiary (2,153) - (2,153) - -
Investment in a subsidiary net of
cash acquired - - - - (7,500)
_________ _________ _________ _________ ________
Net cash used in investing
activities (14,348) (7,184) (23,327) (11,482) (16,212)
_________ _________ _________ _________ ________
Financing activities
Dividends paid to minority
shareholders - - (3,382) (3,776) (3,776)
Dividends (8,752) - (8,752) - -
Repayments of borrowings (11,208) (820) (11,208) (12,460) (13,325)
Receipt / (repayment) of other
long term liabilities 58 (1,972) 1,916 (1,972) (4,266)
Capital issue 53,346 - 53,346 - -
Repayments of capital notes - - - - (246)
Share of profits paid to
Municipality of Loutraki (769) (894) (3,301) (2,911) (2,911)
Increase (decrease) in bank (2,707) (19) (254) (6) 245
overdrafts
_________ _________ _________ _________ ________
Net cash from (used) in financing
activities 29,968 (3,705) 28,365 (21,125) (24,279)
_________ _________ _________ _________ ________
Net increase (decrease) in cash
and cash equivalents 28,253 (2,297) 35,667 (9,214) (4,550)
Effect of foreign exchange rate
changes 575 59 200 231 590
Cash and cash equivalents at
beginning of period 42,278 32,454 35,239 39,199 39,199
_________________________________________________
Cash and cash equivalents at end
of period 71,106 30,216 71,106 30,216 35,239
=================================================
Tax cash flow (5,191) (4,473) (10,971) (9,167) (11,891)
=================================================
Interest paid - - (513) (3,836) (4,074)
=================================================
* The 2006, and nine months ended September 2006 and 2007, and three months
ended September 2006 amounts reflect the operations for the Group for each
period as if the reorganisation described in Note 1 had occurred at the
beginning of the reported periods.
NOTE 1 - GENERAL INFORMATION
The unaudited Interim Condensed Consolidated Financial Statements ('Interim
Consolidated Financial Statements') for the nine and three month periods ended
30 September 2007 have been prepared on a basis consistent with the accounting
policies set out in the Financial Statements for the year ended 31 December 2006
included in the prospectus of Queenco Leisure International published on 03 July
2007 ('2006 Financial Statements'). The Interim Consolidated Financial
Statements should therefore be read in conjunction with the 2006 Financial
Statements.
The Interim Consolidated Financial Statements for the nine and three month
periods ended 30 September 2007, were approved by the Board of directors on 18
November 2007. The information relating to the year ended 31 December 2006 is an
extract from the 2006 Financial Statements.
In November 2006 the Company's ultimate controlling shareholders decided to
restructure their holdings and to transfer their controlling interest in a
Romanian tourist and casino project in Bucharest to the Company. Under this
reorganisation it was agreed that the Romanian project will be transferred to
the ownership and control of the Company for 62,500,050 newly issued shares of
the Company representing 25% of the Company's equity prior such an issuance. The
transaction was completed on 13 June 2007.
NOTE 2 - ACCOUNTING POLICIES
The Interim Consolidated Financial Statements for the nine and three month
periods ended 30 September 2007, and for the nine and three month periods ended
30 September 2006, have been prepared by the Group in accordance with IAS 34
'Interim Financial Reporting'. The preparation of the Interim Consolidated
Financial Statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities at the balance sheet date, and the reported
amounts of revenue and expenses during the reporting period. Actual results
could vary from these estimates. The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the revision
affects both current and future periods.
The same accounting policies and methods of computation are followed in the
interim financial report as published by the company on 02 July 2007, which are
available in the prospectus published on 03 July 2007 and from the Company's
website.
During the period the Company purchased a minority interest and increased its
stake in a proportionally consolidated company from 50% to 53%, whilst retaining
joint control. The Company previously had no accounting policies for such
transaction. The Company has therefore instituted accounting policy which
prescribe an accounting treatment with IFRS that are described below.
Purchase of minority interest and increase in stake in a proportionally
consolidated entity
In the event of a purchase of a minority interest or the increase of a stake in
a proportionally consolidated entity whilst retaining joint control, the Company
applies purchase accounting to do portion of the assets newly acquired. The
proportion of the fair value of assets acquired is assessed and the purchase
price is allocated according to the fair value of these assets. Any unallocated
consideration is allocated to goodwill.
At the date of authorisation of these financial statements, the following
Standards and Interpretations which have not been applied in these financial
statements were in issue but not yet effective:
IFRIC 14 IAS 19-The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction
The directors anticipate that the adoption of this Interpretation in future
periods will have no material impact on the financial statements of the Group.
NOTE 3 - earnings per share
A pro forma calculation for earnings per share ('EPS') has been present for the
purposes of comparability. Due to large number of shares issued in 2006, the EPS
calculation mandated by IAS 33 does not represent useful information. The pro
forma calculation assumes that the equity issue in June 2006 as described in
note 26 of the historical financial information for years 2004 to 2006, occurred
on 1 January 2004. The effective interest reduction as a result of this
assumption is immaterial and therefore has not been included for the purposes of
the pro forma calculations.
Note 4 - notes to the cashflow statementS
3 months ended 30 9 months ended 30 Year ended
September September 31 December
__________________ __________________ ___________
2 0 0 7 2 0 0 6 2 0 0 7 2 0 0 6 2 0 0 6
_______ _______ _______ _______ _______
Profit before tax 16,414 11,070 37,349 28,799 41,200
Adjustments for:
Depreciation of property,
plant and equipment 1,939 1,733 6,373 5,802 7,822
Impairment - - - 755 755
Increase (decrease) in provisions 385 (46) 651 96 114
Amortisation of intangible assets 271 278 812 829 1,116
Investment income (1,958) (203) (2,505) (1,319) (1,188)
Finance costs 984 514 2,197 2,213 2,476
Foreign exchange gain (loss) (211) 134 80 122 110
Share of results of associates 310 (10) 723 15 (86)
Expense relating of grant of
share options 472 - 472 - -
_______ _______ _______ _______ _______
18,606 13,470 46,152 37,312 52,319
Operating cash flows before
movements in working capital
Decrease (increase) in inventories (43) 31 (10) 26 (201)
Decrease (increase) in receivables 86 121 (1,391) 1,330 126
Increase (decrease) in payables (825) (557) (2,638) (2,272) (338)
Cash generated by operations 17,824 13,065 42,113 36,396 51,906
Income taxes paid (5,191) (4,473) (10,971) (9,167) (11,891)
Interest paid - - (513) (3,836) (4,074)
_______ _______ _______ _______ _______
Net cash from operating activities 12,633 8,592 30,629 23,393 35,941
======= ======= ======= ======= =======
NOTE 5 - SIGNIFICANT EVENTS IN THE PERIOD
In May 2007, it was resolved that subject to the completion of the listing of
the Company's securities on the London Stock exchange, the Company's ultimate
controlling shareholder, will be granted with stock options, exercisable at the
listing price, representing 3% of the Company's equity following the completion
of the reorganisation mentioned in Note 1 and mentioned listing. Stock options
representing a further 2.5% of the Company's equity after the reorganisation and
listing were granted to senior management and directors, exercisable at 80% of
the listing price, contingent on the same terms as the aforementioned options.
On 31 May 2007, the Company declared a dividend of € 8.8 million, payable to the
Shareholders of the
Company on that date, being Shachar and YZ Queenco. This dividend was paid on 15
July 2007.
In June 2007, Resido Rodos Ltd, a subsidiary of the Company, signed an agreement
to exchange € 9.8 million of parent loans for capital notes. These capital notes
are considered equity instruments and the transaction was conditional on a
successful public offering of the Company. These loans were converted to capital
notes during the third quarter.
On 30 June 2007, the casino in Belgrade began operations.
On 03 July 2007, the Company completed an Initial Public Offering of Global
Depositary Receipts representing the Company's shares on the London Stock
Exchange. Approximately € 53 million net of transaction costs was raised.
During September 2007, Resido Tourism ltd a subsidiary of the Company, signed an
MOU with a local Greek company and Emporiki Bank in regards to the building of a
marina and a residential project on Rhodes Island. This agreement is designed to
fulfil the investment obligation within the terms of the casino license. Under
this MOU, Emporiki Bank resolved to provide finance of €56 million through
non-recourse loans. A decision from the relevant authorities is still pending on
whether this MOU will resolve the investment obligation.
On 30 September 2007 the Company purchased 6% of Dasharta, a subsidiary that
ultimately holds the Loutraki project from a minority shareholder. In addition a
Capital Note that the minority shareholders held in Dasharta was also purchased.
The total consideration was for € 12.5 million deferred over four years.
NOTE 6 - EVENTS AFTER THE BALANCE SHEET DATE
During October 2007, Queen Investments, a Romanian subsidiary of the Company,
was granted concession rights over a historic building in Constansa for a period
of 49 years, the Company intends to renovate and operate as 'Casino Constanta'.
Queen Investments has entered into contractual obligations of approximately €
0.5 million per annum in this respect.
On 18 October 2007, the Board of Directors of Club Hotel Loutraki, a subsidiary
of the Company, resolved to inject a further € 8 million to capital of an
associate, Grand Casino d.o.o.
This information is provided by RNS
The company news service from the London Stock Exchange
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