Final Results
28 7월 2006 - 4:01PM
UK Regulatory
RNS Number:8566G
Gamingking PLC
28 July 2006
GAMINGKING PLC
PRELIMINARY RESULTS
Headlines
* Turnover exceeds #5m
* Profit from operations increases from #17,000 to #112,000
* Cash increases by 27%
* 3 acquisitions completed in the year
* The integration of Kelly's Eye is now complete
* Club View Network launched
Chairman's Statement
The financial results declared for the year ended 30 April 2006 include for the
first time, the combined businesses of Lotteryking Limited and Kelly's Eye (No
1) Limited. As a consequence, year on year comparison becomes something of an
academic exercise. Adding further confusion to the issue of comparison is the
fact that prior to acquisition, Kelly's Eye traded as a private company, where
the need for financial reporting was less demanding. However, drawing
comparisons with Lotteryking Limited, pre acquisition, it is very encouraging to
see turnover growing by 73% to #5.3m and the profit from operations increasing
by #95,000 to #112,000.
The financial results, which we believe show positive and solid progress, have
been influenced by a number of factors, principally attributable to the Kelly's
Eye acquisition. The integration of the two companies was somewhat more
protracted than had been originally anticipated. There was an element of
business disruption during the latter part of 2005, as the new Exchequer
accounting system was introduced group wide. The tailoring of the Exchequer
system, to meet the bespoke operating requirements of the company, was more
complex than first envisaged. As a direct consequence, #50k worth of additional
training and consultancy costs were incurred. These costs have been taken to the
profit and loss account; a further #37,000 of post integration costs, mainly IT
hardware, have been capitalised.
As we anticipated, with the takeover of Kelly's Eye we have seen a fall in the
group's gross margin percentage from 59.78% to 50.05%, which is primarily due to
the fact that Kelly's Eye was selling at a much lower gross margin than
Lotteryking. We expect that over the next twelve months that the margin will
strengthen slightly given the improved buying power that we now command.
The Kelly's Eye (No. 1) Limited acquisition was in part satisfied by an #800,000
loan from Barclays Bank and in the course of the year, #61,000 of interest
charges have been incurred on this loan. Interest charges did not feature in
previous years.
The Buncefield Oil Terminal explosion on 11 December 2005 added to the trading
disruption, with the Hemel Hempstead offices remaining inaccessible for a period
of six days.
An acquisition, followed by a programme of integration, can often be a prolonged
process but our integration programme is now complete and there are early signs
that benefits will accrue from the joint business.
As I reported at the Interim, two other small but strategically important
acquisitions were made during the year. The business interests of Club Gemini
were acquired, the transaction satisfied via a cash payment. The Club Gemini
acquisition secured a stream of club business in the northwest and prevented it
from falling into competitor hands. Secondly the Group employed Paul Davidson.
He had previously been a sole trader, trading under the name Independent Leisure
Supplies. His employment brought his contracts and customers to the business.
This helped strengthen our position in the northeast and has allowed the company
to position a regional sales, service and distribution hub in the region.
The company continues to exercise caution in relation to cash management, and
the year-end net cash position of #613,000 represents a 27% improvement over the
previous year. During the course of the
year #386,000 worth of capital expenditure was incurred, principally on the
production of new vending terminals.
The value of receivables has risen sharply at the year end from #484,000 to
#819,000, an increase that is in direct relation to the increase in turnover.
Creditors (excluding loans) have risen from #406,000 at the previous year end to
#996,000. Whilst these increases are symptoms of growth, both creditors and
debtors are being carefully managed.
All costs have been carefully controlled throughout the year with no significant
increases. Group costs have remained static.
Total equity in the company has risen by 31% to #2.7m and the earnings per share
have risen from 0.015p to 0.017p.
Looking ahead your Board remains committed to its objectives and will examine
all opportunities to create shareholder value. Our current trading is showing
some impact from the effects of the World Cup and the very warm weather but our
expectation is that sales performance will improve over the coming months. A
more detailed statement of the progress on current projects will be included in
the published accounts.
I would like to take the opportunity of thanking John Sanderson, who retired
from the board in 2005, for his years of service to the Company and also to
welcome Andrew Speak who has replaced John as non-executive director.
Our employees have worked extremely hard throughout the year, rising to the
challenges and supporting Group endeavours. I continue to be impressed by their
commitment, enthusiasm and professionalism and extend grateful thanks to them
all.
Douglas Yates
Chairman
27 July 2006
Consolidated income statement
For the year ended 30 April 2006
2006 2005
#000 #000
Revenue 5,287 3,058
Cost of sales (2,641) (1,230)
__________ __________
Gross profit 2,646 1,828
Administrative expenses (2,534) (1,811)
__________ __________
Profit from operations 112 17
Finance costs (61) -
Investment income 12 6
__________ __________
Profit before taxation 63 23
Income tax (expense)/credit (12) 15
__________ __________
Profit for the year 51 38
======== ========
Earnings per share
0.017p 0.015p
Basic earnings per share ======== ========
0.017p 0.015p
Diluted earnings per share ======== ========
Consolidated balance sheet
As at 30 April 2006
2006 2005
#000 #000
Assets
Non-current assets
Intangible fixed assets 1,339 66
Property, plant and equipment 1,223 1,109
Deferred tax assets 39 77
________ ________
2,601 1,252
Current assets ________ ________
Inventories 426 235
Receivables and prepayments 835 484
Cash and cash equivalents 613 483
________ ________
1,874 1,202
________ ________
Total assets 4,475 2,454
======== ========
Liabilities
Non-current liabilities
Bank Loan 640 -
Hire purchase 9 -
________ ________
649 -
________ ________
Current liabilities
Bank loan 160 -
Hire purchase 4 -
Trade and other payables 988 406
Current tax payable - -
________ ________
1152 406
________ ________
Total liabilities 1,801 406
________ ________
Net assets 2,674 2,048
======== ========
Equity attributable to equity holders of the parent
Share capital 2,907 2,661
Share premium 173 173
Merger reserve 1,391 1,084
Retained earnings (1,797) (1,870)
________ ________
Total equity 2,674 2,048
======== ========
Consolidated cash flow statement
For the year ended 30 April 2006
2006 2005
#000 #000
Operating activities
Results for the period before tax 63 23
Depreciation and amortisation 381 263
Equity settled share options 22 23
Loss on disposal of property, plant and 17 2
equipment
Interest paid 61 -
Interest received (12) (6)
(Increase)/decrease in inventories (10) 62
Decrease/(increase) in receivables 22 (82)
Increase in trade payables and other 124 43
liabilities
Corporation tax paid (33) -
________ ________
Net cash from operating activities 635 328
Investing activities
Additions to property plant and equipment (343) (439)
Interest received 12 6
Purchase of businesses (913) -
________ ________
Net cash from investing activities (1,244) (433)
Financing activities
Proceeds from share issue - 303
Increase in bank loans 800 -
Interest paid (61) -
________ ________
Net cash from financing activities 739 303
Cash and cash equivalents at the beginning 483 285
of the period
Net increase in cash and cash equivalents 130 198
________ ________
Cash and cash equivalents at end of the 613 483
period ________ ________
Consolidated statement of changes in equity
For the year ended 30 April 2006
Share Share Merger Retained Total
Capital Premium Reserve Earnings Equity
#000 #000 #000 #000 #000
Balance at 1 May 2004 2,531 - 1,084 (1,931) 1,684
Profit for the year - - - 38 38
Shares issued 130 173 - - 303
Employee share based
compensation - - - 23 23
------- -------- ------- ------- -------
Balance at 30 April 2005 and
1 May 2005 2,661 173 1,084 (1,870) 2,048
Profit for the year - - - 51 51
Shares issued 246 - 307 - 553
Employee share
based compensation - - - 22 22
------- -------- ------- ------- -------
Balance at 30 April 2006 2,907 173 1,391 (1,797) 2,674
------- -------- ------- ------- -------
Basis of preparation
The financial statements have been prepared in accordance with IFRS adopted for
used in the EU.
The group has taken advantage of certain exemptions available under IFRS 1
"First-time adoption of International Financial Reporting Standards" as
explained below:
Business combinations
The group has elected not to apply IFRS 3, Business Combinations,
retrospectively to past business combinations prior to the date of transition.
Share-based payment transactions
The group has applied IFRS 2 share based payments retrospectively to equity
instruments granted after 7 November 2002 and vesting on or after 1 January
2005.
Profit from operations
2006 2005
#000 #000
Profit from operations has been arrived at
after charging:
Depreciation of property, plant and equipment
- owned 356 259
- hire purchase 4 -
Amortisation of intangibles 21 8
Property lease charges 122 64
Car lease rentals 71 65
Hire of plant and machinery 5 5
Loss on disposal of property, plant and equipment 17 2
Research and development costs 24 26
Share and share option costs 22 23
Auditor's remuneration:
Audit services - year end audit 37 29
Audit services - interim review 8 8
Non-audit services 23 10
========= =========
Investment income
2006 2005
#000 #000
Interest on bank deposits 12 6
========= =========
Income tax expense 2006 2005
#000 #000
UK corporation tax at 19% (2005: 19%) and
total current tax (16) -
Origination and reversal of timing differences 28 (15)
__________ __________
Total deferred tax 28 (15)
__________ __________
Tax on profit on ordinary activities 12 (15)
========= ========
Unrelieved tax losses of approximately #190,000 (2005: #282,000) remain
available to offset against future taxable trading profits. In addition the
Group has capital losses of #3,107,000 (2005: #3,107,000), which can be offset
against future capital gains.
Earnings per share
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the year.
The calculation of diluted earnings per share is based on the basic earnings per
share, adjusted to allow for the issue of shares, on the assumed conversion of
all dilutive options and other dilutive potential ordinary shares.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
2006 2005
Weighted Per Weighted Per
average Share average Share
Earnings number of amount Earnings number of amount
#000 shares pence #000 shares pence
Basic
Earnings per
share
Earnings
attributable
to ordinary
shareholders 51 290,361,210 0.017 38 255,201,449 0.015
Dilutive
effect of
securities
Options 2,680,332 3,395,522
Diluted
Earnings per
share 51 293,041,542 0.017 38 258,596,971 0.015
The preliminary statement of results has been reviewed and agreed with the
Company's auditors, Grant Thornton UK LLP, who have indicated that they will be
giving an unqualified opinion in their report on the statutory financial
statements.
Copies of the annual report and consolidated financial statements for the year
ended 30 April 2006 will be sent to shareholders in due course. Further copies
will be available from the Company's offices at Cedar House 56 Peregrine Road,
Hainault, Essex IG6 3SZ.
For further information contact:
Catherine Bond; Seymour Pierce 020 7107 8000
Guy van Zwanenberg; Gamingking plc 0118 940 4924
This information is provided by RNS
The company news service from the London Stock Exchange
END
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