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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| 32Red | LSE:TTR | London | Ordinary Share | GI000A0F56M0 | ORD 0.2P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 194.875 | 190.00 | 199.75 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMTTR
RNS Number : 3759K
32Red Plc
21 September 2016
21(st) September 2016
32Red Plc
("32Red" or "the Company")
Interim results for the six months ended 30 June 2016
Record revenue and profitability performance and key strategic progress
32Red, the award-winning online gaming operator, today reports Interim results for the six months ended 30 June 2016.
Key Financials:
Hot Features
Premium
H1 H1
Total Net Gaming Revenues 2016 2015 Growth
('NGR')
------------------------------- --------- ---------- --------
32Red Casino NGR GBP21.2m GBP17.0m +24%
------------------------------- --------- ---------- --------
32Red Other Products NGR GBP2.3m GBP0.7m +225%
------------------------------- --------- ---------- --------
Italy - 32Red.it NGR GBP1.1m GBP0.9m +33%
------------------------------- --------- ---------- --------
32Red NGR GBP24.6m GBP18.6m +32%
------------------------------- --------- ---------- --------
Roxy Palace NGR GBP5.8m -
------------------------------- --------- ---------- --------
Total NGR GBP30.4m GBP18.6m +63%
------------------------------- --------- ---------- --------
Underlying EBITDA* GBP4.5m GBP2.2m +104%
------------------------------- --------- ---------- --------
Loss from Italy GBP0.0m (GBP1.0m)
------------------------------- --------- ---------- --------
EBITDA GBP4.5m GBP1.2m +258%
------------------------------- --------- ---------- --------
Profit before taxation GBP2.5m GBP0.1m +2,284%
------------------------------- --------- ---------- --------
Earnings per share 2.80p 0.10p +2,630%
------------------------------- --------- ---------- --------
Adjusted earnings per share** 4.58p 2.48p +85%
------------------------------- --------- ---------- --------
Interim dividend declared 1.30p 1.10p +18%
------------------------------- --------- ---------- --------
Period highlights:
-- Record revenue performance with NGR for the period up 63% -- Record EBITDA performance, up 258% on H1 15 -- Italy on track to break even in the year -- 75% of revenues from regulated and taxed markets -- Mobile casino driving growth and represents 50% of total casino revenues (2015: 42%) -- Interim dividend increased by 18% to 1.3p (2015: 1.1p)
-- Successful launch of new 32Red Casino responsive, multi-platform website in April 2016 delivering encouraging results
-- Confident of meeting management expectations for the full year
Post period end events:
-- Extended contract with innovative commercial terms agreed with digital gaming solutions partner, Microgaming, effective from 1 November 2016. The new arrangement enables 32Red to develop its strength in regulated markets, whilst retaining its broad appeal across the industry.
-- Exclusive licence to promote casino games for ITV flagship brands -- British Horse Racing sponsorship agreements:
o New three year deal to sponsor prestigious King George Christmas Meeting at Kempton
o Renewal of sponsorship of the All Weather Championship for next two years
o New three year deal to sponsor Haydock Park's Group 1 Sprint Cup
Ed Ware, CEO commented:
"We are delighted to report a record revenue and profitability performance for 32Red in the first half of 2016 which has been driven by strong growth across our business and brands.
We are also delighted to announce today the renewal of our contract with Microgaming. We have enjoyed a long and strong partnership with one of the world leaders in digital gaming expertise and are very excited to have strengthened our relationship in a way that provides 32Red with further opportunities to invest in and develop our business.
Current trading remains strong with like-for-like NGR up 4% on very strong comparatives in the second half to date. Underpinned by our strong online gaming brands and exciting customer-focused offer, the Board remains confident of meeting its expectations for the full year."
Enquiries:
32Red Plc Tel: +00 350 200
49396
Ed Ware, CEO
Jon Hale, CFO
Numis Securities Limited Tel: +44 (0) 20 7260
1000
Michael Meade (Nominated Adviser)
Chris Wilkinson (Corporate Broking)
Michael Burke (Corporate Broking)
Hudson Sandler Tel: +44 (0) 207
796 4133
Alex Brennan 32Red@hudsonsandler.com
Bertie Berger
*Underlying EBITDA is Earnings before Interest, Tax, Depreciation and Amortisation derived from the established business i.e. excluding results from its new Italian operations and is stated before share option costs and exceptional items.
** Adjusted Earnings Per Share is calculated on Underlying Earnings adding back exceptional items, share option costs and amortisation and uses the weighted average number of ordinary shares for diluted earnings as calculated in note 3 to this interim statement.
32Red Plc
Performance Summary
We are pleased to report that 32Red has delivered another record-breaking performance in the first half of the year, with Net Gaming Revenue ("NGR") for the six months ended 30 June 2016 (the "period") increasing by 63% to GBP30.4m (H1 2015: GBP18.6m). This very strong outcome was driven by a combination of accelerated organic growth in our core business (+32% on 2015), and a healthy contribution from Roxy Palace acquired in July 2015. This strong revenue growth has resulted in a 104% increase in underlying EBITDA* to GBP4.5m (H1 2015: GBP2.2m).
The 32Red brand continues to increase its market share in Italy and the business remains on track to break even in 2016, incurring minimal losses in the first half (H1 2015 loss: GBP1.0m). After accounting for this investment, reported EBITDA for the period totalled GBP4.5m (H1 2015: GBP1.2m). Further to the acquisition of Roxy Palace in 2015, amortisation of intangible fixed assets increased to GBP1.4m for the period (H1 2015: GBP0.7m) and resulted in Profit before Taxation of GBP2.5m (H1 2015: GBP0.1m).
Earnings per share totalled 2.80p (H1 2015: 0.10p) and Adjusted Earnings per Share** totalled 4.58p (H1 2015: 2.48p). In line with the strong performance of the business and the Board's confidence in the outlook for 32Red, the Company today declares an interim dividend of 1.3p per share (H1 2015: 1.1p) to be paid on 28 October 2016 to all shareholders on the Company's share register at the close of business on 30 September 2016.
Trading Overview
The 32Red Casino brand represents 70% of total revenues and continues to achieve strong growth (+24%) in direct response to accelerated, returns-driven marketing investment. The launch of a new responsive multi-platform website in April 2016 has also improved retention levels and new player conversion rates. Mobile remained the fastest growing platform both in terms of new player recruitment and revenue, growing by 45% against the prior year and now representing 50% of total 32Red Casino revenues (2015: 42%).
The Roxy Palace Casino was acquired in July 2015 and was successfully migrated to our Gibraltar operations by the end of 2015. The Roxy Palace brand will benefit from the roll out of the new responsive website in the second half of the year, before marketing investment is increased to expand this brand.
The growth in revenues from Other Products is the direct result of increased trade in the sports betting product. In May 2016, the Company renewed its commercial arrangement with Kambi Sports Solutions, allowing further funds to be allocated to marketing of the sports betting product. Sport betting, whilst still a small part of the overall group, continues to offer a strategic opportunity for 32Red both in terms of customer acquisition, cross-sell and retention, and the Company will continue to exploit opportunities to leverage the 32Red brand in this important vertical.
On 29 August 2016, 32Red aired its first TV advert promoting the sports book and the Company has signed a twelve month deal to advertise around live sport on Sky, including a number of half-time adverts in live Premier League football matches. On 13 May 2016, the Company announced a three year agreement to sponsor Leeds United Football Club, providing 32Red with shirt sponsorship, access to Leeds United's global fan base and extensive brand visibility throughout the club's iconic Elland Road stadium as well as across its digital and media platforms. This sponsorship complements our existing shirt sponsorship of Rangers Football Club who have returned back to top flight football in Scotland.
Italian net gaming revenues derived via www.32Red.it were up 33% on 2015, in line with the Board's expectations and the Company continues to examine ways to broaden its product offering in this competitive but attractive market.
Post period end events - extended contracts with key partners
Post the period end 32Red is delighted to have signed a number of key strategically important contracts that will help the Company to deliver its stated growth strategy.
1. Microgaming - 32Red is very pleased to announce today that it has agreed a new and extended contract with innovative commercial terms with digital gaming solutions partner, Microgaming. Under the new agreement, which is effective from 1 November 2016, the relationship is extended for a further five years and cements Microgaming as 32Red's central and major technical and content supplier. The new deal also gives 32Red the flexibility to utilise alternative providers in order to enable the Company to ensure it is able to attract and retain the full spectrum of casino players to the 32Red brand.
2. ITV - the Company is pleased to announce an extension of its exclusive licence with ITV Brand Extensions allowing the Company to operate an "Ant & Dec Saturday Night Takeaway" slot machine game in addition to the current, successful "I'm a Celebrity...Get Me Out Of Here!" game. Both games use popular iconography, theme tunes and features to bring the excitement of the shows to thrilling casino games that are available exclusively to 32Red customers over the three year licence agreement.
3. British Horse Racing - The Company continues to take opportunities to extend the 32Red brand profile within British Racing. As a founding member of the British Horseracing Authority's Authorised Betting Partner ("ABP") initiative, the Company is pleased to be able to secure high profile races as and when they appear on the open market. As announced earlier this month, we are delighted to have agreed a three year deal to become the sponsor of the historic King George VI Chase run on Boxing Day. The race has been won by horses that raise the profile of all concerned beyond the sport itself; Desert Orchid and Kauto Star being two such famous winners of the race.
In addition to the King George Winter Festival, 32Red has renewed commitment to the sponsorship of the All Weather Championship for the next two seasons, meaning that more than 250 races will carry 32Red sponsorship from October to April each year. All Weather Champions Finals Day is staged on Good Friday and enjoys terrestrial TV coverage on a sports-hungry day. On 23(rd) August 2016, 32Red announced a three year deal to sponsor Haydock Park's prestigious Group 1 Sprint Cup run this year on 3(rd) September. In 2017 and 2018 the sponsorship extends across a three day meeting with all races branded 32Red and culminating in the 32Red Sprint Cup on the Saturday.
Current Trading and Outlook
32Red has excellent operational momentum which has been strengthened by the signing of these key strategic contracts post the period end. The Company has a clear growth strategy, which is underpinned by a relentless focus on putting our customers first and providing the most enjoyable online gaming experience possible. We continue to invest to achieve this, with targeted marketing strengthening the appeal of the 32Red brand and new product development, including the launch of our new, responsive and multi-platform 32Red Casino website in April 2016, which is delivering encouraging results.
The second half of the year has started strongly with like-for-like net gaming revenues for the first eleven weeks of the second half up 4% on the same period in 2015 and up 9% including the contribution from Roxy Palace. In the Company's Trading Update on 29 July 2016, the Company reported that in the first 27 days of July, 32Red has experienced an unusually weak casino gross win margin, which has since started to return to more normal levels. Building on the strong first half of the year and with continued growth in the second half, the Board is confident of delivering its expectations for the full year.
*Underlying EBITDA is Earnings before Interest, Tax, Depreciation and Amortisation derived from the traditional business i.e. excluding results from its new Italian operations and is stated before share option costs and exceptional items.
** Adjusted Earnings Per Share is calculated on Underlying Earnings adding back exceptional items, share option costs and amortisation and uses the weighted average number of ordinary shares for diluted earnings as calculated in note 3 to this interim statement.
32Red Plc
Statement of profit or loss and other comprehensive income
for the six months ended 30 June 2016
Six months Six months
ended ended
30 June 30 June
Notes 2016 2015
Unaudited Unaudited
GBP GBP
Net Gaming Revenue 30,382,952 18,584,571
Cost of sales (22,863,632) (14,258,192)
------------- -------------
Gross Profit 7,519,320 4,326,379
Administrative expenses (3,051,005) (3,079,720)
EBITDA before share option
costs and exceptional
items 4,468,315 1,246,659
------------------------------------------ ------- ------------- -------------
Share option costs (325,237) (240,617)
Depreciation and Amortisation (1,628,596) (898,856)
------------- -------------
Operating Profit before
exceptional items 2,514,482 107,186
Exceptional items 2 (57,963) (19,039)
------------- -------------
Profit before tax and
finance costs 2,456,519 88,147
Finance income 8,942 15,280
Profit before
taxation 2,465,461 103,427
Taxation 4 (117,595) (27,852)
------------- -------------
Profit and total comprehensive
income
for the period 2,347,866 75,575
============= =============
Earnings per share
(p)
Basic 3 2.80p 0.10p
Diluted 3 2.59p 0.10p
32Red Plc
Consolidated Statement of Changes
in Equity
for the six months ended 30 June
2016
Equity attributable to equity
holders of 32Red Plc
Employee
Benefit
Share Trust
Share Share options (EBT) Retained Total
capital premium reserve reserve earnings equity
GBP GBP GBP GBP GBP GBP
Balance 1
January
2015 147,360 447,218 876,159 (156,576) 4,431,951 5,746,112
Share options
charge - - 240,617 - - 240,617
Shares issued -
for cash - - - - -
Shares acquired
by the EBT - - - (100,000) - (100,000)
Shares
transferred
from the EBT - - - 10,914 (4,539) 6,375
Dividends paid - - - - (1,031,571) (1,031,571)
------------------ -------------- ---------- ------------ ------------ ------------
Transactions
with
owners - - 240,617 (89,086) (1,036,110) (884,579)
Profit and
total
comprehensive
income for the
period - - - - 75,575 75,575
------------------ -------------- ---------- ------------ ------------ ------------
Balance 30 June
2015 147,360 447,218 1,116,776 (245,662) 3,471,416 4,937,108
================== ============== ========== ============ ============ ============
Balance 1
January
2016 167,360 6,827,218 1,410,956 (480,272) 3,429,880 11,355,142
Share options
charge - - 325,237 - - 325,237
Shares issued
for cash 2,835 - - - - 2,835
Shares acquired
by the EBT - - - (10,050) - (10,050)
Shares
transferred
from the EBT - - - 139,907 (21,894) 118,013
Dividends paid - - - - (3,932,963) (3,932,963)
------------------ -------------- ---------- ------------ ------------ ------------
Transactions
with
owners 2,835 - 325,237 129,857 (3,954,857) (3,496,928)
Profit and
total
comprehensive
income for the
period - - - - 2,347,866 2,347,866
------------------ -------------- ---------- ------------ ------------ ------------
Balance 30 June
2016 170,195 6,827,218 1,736,193 (350,415) 1,822,889 10,206,080
================== ============== ========== ============ ============ ============
32Red Plc
Consolidated Statement of Financial Position
as at 30 June 2016
Six months Six months Year
ended ended ended
30-Jun 30-Jun 31-Dec
2016 2015 2015
Unaudited Unaudited Audited
Notes GBP GBP GBP
Assets
Non-current
Intangible assets 5 7,603,644 2,155,593 8,814,700
Property, plant
& equipment 6 1,029,813 1,027,593 1,061,493
------------ ------------ -------------
8,633,457 3,183,186 9,876,193
Current
Trade and other
receivables 2,254,613 843,447 1,393,243
Cash and cash equivalents 7,916,695 6,716,912 10,255,347
------------ ------------ -------------
10,171,308 7,560,359 11,648,590
Total assets 18,804,765 10,743,545 21,524,783
============ ============ =============
Equity
Equity attributable to
shareholders of 32Red
Plc
Called up share
capital 170,195 147,360 167,360
Share premium 6,827,218 447,218 6,827,218
Share option reserve 1,736,193 1,116,776 1,410,956
EBT Reserve (350,415) (245,662) (480,272)
Retained earnings 1,822,889 3,471,416 3,429,881
------------ ------------ -------------
Total equity 10,206,080 4,937,108 11,355,143
Liabilities
Non-current
Trade and other -
payables - -
------------ ------------ -------------
- - -
Current 82,774
Social Security
and other taxes 76,858 73,881 10,086,866
Trade and other
payables 8,521,827 5,732,556
Current and total
liabilities 8,598,685 5,806,437 10,169,640
Total equity and
liabilities 18,804,765 10,743,545 21,524,783
============ ============ =============
32Red Plc
Consolidated Statement of Cash Flows
for the six months ended 30 June 2016
Six months Six months
ended ended
30-Jun 30-Jun
2016 2015
Unaudited Unaudited
GBP GBP
Operating activities
Profit for the year 2,347,866 75,575
Interest adjustments (8,942) (15,280)
Amortisation 1,411,567 681,769
Depreciation 217,029 217,087
Change in trade and other
receivables (861,370) 86,668
Change in trade and other
payables (1,570,956) 862,248
Share option costs 325,237 240,617
------------ ------------
1,860,431 2,148,684
Investing activities
Additions to intangible
assets (200,511) (932,217)
Additions to tangible
assets (191,064) (438,742)
Disposal of Property,
Plant & Equipment 5,715 -
------------ ------------
(385,861) (1,370,959)
Financing activities
Shares issued for cash 2,835 -
Proceeds on disposal
of shares by the EBT 118,013 6,375
Shares acquired by the
EBT (10,050) (100,000)
Dividends paid during
the period (3,932,963) (1,031,571)
Net interest received 8,942 15,280
------------ ------------
(3,813,223) (1,109,916)
Cash and cash equivalents,
beginning of period 10,255,347 7,049,103
Net increase in cash and
cash equivalents (2,338,652) (332,191)
Cash and cash equivalents,
end of period 7,916,695 6,716,912
============ ============
Notes:
1. Accounting policies
The consolidated annual financial statements are prepared in accordance with the measurement principles of applicable International Financial Reporting Standards ("IFRSs") as adopted by the EU. The accounting policies have remained unchanged from the previous year, as set out in the Annual Report for the year ended 31 December 2015, available on www.32redplc.com, except for the application of the following standards, effective from 1 January 2016:
-- Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38)
-- Annual Improvements to IFRSs 2012-2014 Cycle - various standards -- Disclosure Initiative (Amendments to IAS 1)
The accounting policies as at 31 December 2015 and the standards effective 1 January 2016 have been applied in the preparation of the interim financial results, with the exception of some of the disclosures required by IAS 34 Interim Financial Reporting.
2. Exceptional item
Six months Six months
ended ended
30-Jun 30-Jun
2016 2015
GBP GBP
GBGA legal costs 57,963 19,039
=========== ===========
During the period, legal costs of GBP57,963 (H1 2015: GBP19,039) were incurred in respect of legal and strategic advice received in connection with the UK Government's recently introduced remote gambling regulatory regime.
3. Earnings per share
Basic earnings per share have been calculated by dividing the net results attributable to ordinary shareholders by the weighted average number of shares in issue during the relevant financial periods.
The weighted average number of shares used for basic earnings per share amounted to 83,851,399 shares (2015: 73,680,056).
To calculate the diluted earnings per share figure, the weighted average of employee share options and awards made under the Long Term Incentive Plan expected to vest has been added. This number represents management's best estimate at 30 June 2016, which is also used for calculating employee payments relating to share based payment transactions. At 30 June 2016, the weighted average number of share options expected to vest was 6,958,259 (2015: 5,714,366).
Six months Six months
ended ended
30-Jun 30-Jun
2016 2015
Net profit attributable
to ordinary shares GBP2,347,866 GBP75,575
============= ===========
Weighted average number
of ordinary shares:
83,851,399 73,680,056
============= ===========
For basic earnings
for diluted earnings 90,809,658 79,394,422
============= ===========
Basic earnings
per share 2.80p 0.10p
============= ===========
Diluted earnings
per share 2.59p 0.10p
============= ===========
Weighted average number of ordinary
shares for basic earnings 83,851,399 73,680,056
Weighted average number of
share options 6,958,259 5,714,366
------------- -----------
Weighted average number of ordinary
shares for diluted earnings 90,809,658 79,394,422
============= ===========
4. Taxation
Six months Six months
ended ended
30-Jun 30-Jun
2016 2015
GBP GBP
Tax on profit on ordinary
activities 117,595 27,852
=========== ===========
5. Intangible assets
Brand Player Software
and database licences
Domain Website
names Development Total
GBP GBP GBP GBP GBP
Cost
At 1 January
2016 4,595,327 4,569,161 110,428 1,744,690 11,019,606
Additions 11,135 - 8,944 180,432 200,511
---------- ---------- ------------- ----------
At 30 June
2016 4,606,462 4,569,161 119,372 1,925,122 11,220,117
========== ========== ============= ========== ===========
Amortisation
At 1 January
2016 595,418 537,611 101,728 970,149 2,204,906
Charge for
the period 595,998 463,939 11,937 339,693 1,411,568
---------- ---------- ------------- ----------
At 30 June
2016 1,191,416 1,001,550 113,665 1,309,842 3,616,473
========== ========== ============= ========== ===========
Net book
value
At 30 June
2016 3,415,046 3,567,611 5,707 615,280 7,603,644
========== ========== ============= ========== ===========
At 31 December
2015 3,999,909 4,031,550 8,700 774,541 8,814,700
========== ========== ============= ========== ===========
At 30 June
2015 1,062,043 56,911 5,647 1,030,992 2,155,593
========== ========== ============= ========== ===========
6. Property, plant and equipment
Computer
Motor and Office Leasehold
Vehicles Equipment Improve-ments Total
GBP GBP GBP GBP
Cost
At 1 January
2016 221,089 2,514,562 222,604 2,958,255
Additions 78,543 112,521 - 191,064
Disposals (90,585) - - (90,585)
---------- ------------ --------------- ----------
At 30 June
2016 209,047 2,627,083 222,604 3,058,734
========== ============ =============== ==========
Depreciation
At 1 January
2016 130,252 1,741,209 25,301 1,896,762
Charge for
the period 21,631 175,973 19,425 217,029
Disposals (84,870) - - (84,870)
---------- ------------ --------------- ----------
At 30 June
2016 67,013 1,917,182 44,726 2,028,921
========== ============ =============== ==========
Net book
value
At 30 June
2016 142,034 709,901 177,878 1,029,813
========== ============ =============== ==========
At 31 December
2015 90,837 773,353 197,303 1,061,493
========== ============ =============== ==========
At 30 June
2015 67,873 804,088 155,632 1,027,593
========== ============ =============== ==========
7. Post Balance Sheet Event - Material contracts
On 21 September 2016, the Company confirmed that it has agreed a new and extended contract with innovative commercial terms with digital gaming solutions partner, Microgaming. Under the new agreement, which is effective from 1 November 2016, the relationship is extended for a further 5 years and cements Microgaming as 32Red's central and major technical and content supplier. The new deal also gives 32Red the flexibility to utilise alternative providers in order to enable the Company to ensure it is able to attract and retain the full spectrum of casino players to the 32Red brand.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFVRAFIIFIR
(END) Dow Jones Newswires
September 21, 2016 02:00 ET (06:00 GMT)
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