World Gaming PLC
19 January 2006
FOR IMMEDIATE RELEASE 19 JANUARY 2006
WORLD GAMING PLC
The Company is pleased to issue an update in respect of trading in the twelve
months ended 31 December 2005 which included three months of trading from the
SPORTSBETTING.COM group acquisition and an update on the consideration payable
relating to that acquisition.
Subsequent to the Company's acquisition of the SPORTSBETTING.COM group effective
1 October 2005, the business has maintained strong performance in respect of
customer sign-ups, deposits, customer activity levels and wagering volumes, all
of which have exceeded management's expectations.
Similarly, the Company's software licensing business has continued to experience
strong growth in licensee wagering volume throughout the fourth quarter of
It has been widely publicised that sports betting win margins, particularly with
respect to American NFL results in the fourth quarter have been well below
industry trends and well below margins that the SPORTSBETTING.COM group has
experienced in comparative prior periods.
As previously announced, the terms of the acquisition for the SPORTSBETTING.COM
group provide that should Profit Before Tax ('PBT') of the SPORTSBETTING.COM
group fall below $15.0 million for the twelve months ended 31 December 2005,
then the total consideration shall be equal to the PBT multiplied by six times.
It is expected that PBT for the SPORTSBETTING.Com group, calculated in
accordance with the terms of the acquisition agreement will be approximately
On this basis, consideration payable to the vendors of the SPORTSBETTING.COM
group is expected to be reduced from the maximum consideration payable of $96.0
million to approximately $82.8 million, a reduction of approximately $13.2m. The
reduction in consideration is therefore expected to be approximately $9.9
million in cash and $3.3 million or approximately 1.5 million in shares. All
amounts shall be finalised on conclusion of an independent audit.
This reduction in the number of shares to be issued to the vendors of the
SPORTSBETTING.COM group means that earnings per share for the Company for 2006,
based on current market expectations, would rise by approximately 3%.
Management expects that operating profit before goodwill amortisation (EBITA)
for the Company shall be approximately $6.5 million for the twelve months ended
31 December 2005.
Chief Executive Officer Daniel Moran commented: 'We are delighted to be
reporting on a highly successful year of change and rapid growth for World
Gaming. Our admission to AIM and acquisition of the SPORTSBETTING.COM group, our
largest licensee, have put the Company in a very strong trading position.
The Directors are pleased to report that the structure of the transaction for
the acquisition of the SPORTSBETTING.COM group has been highly effective in
maintaining and growing earnings for shareholders. While a short-term
abnormality in American NFL trading margins has produced a lower than
anticipated sports margin in the fourth quarter, the anticipated reduction in
consideration of over $13 million comfortably mitigates this issue. Strong
underlying performance indicators remain and the start of 2006 has seen a
return to historic margin levels.
The Directors look to the future with confidence and a commitment to continued
development of our business in coming years.'
World Gaming plc Tel. +1 888 883 0833
Daniel Moran, Chief Executive
Daniel Stewart Securities Tel. 020 7776 6550
Bishopsgate Communications Limited Tel: 020 7430 1600
The Ordinary Shares have not been and will not be registered under the U.S.
Securities Act of 1933 (the 'Securities Act') and may not be offered or sold in
the United States or to a U.S. person (as such term is defined in Regulations S
under the Securities Act) absent registration or an applicable exemption from
registration under the Securities Act.
Notes to Editors
World Gaming plc is a UK based holding company whose subsidiaries participate in
Internet gaming software licensing and operations. The World Gaming Group is an
international developer, licensor, and provider of online gaming products,
including casino, sportsbook, and pari-mutuel betting.
World Gaming's Ordinary Shares are traded on the London Stock Exchange,
Alternative Investment Market ('AIM') under the symbol WGP and the Over The
Counter Bulletin Board market in the U.S. under symbol WGMGY.
Further information on the Company can be found at:
This information is provided by RNS
The company news service from the London Stock Exchange