TIDM888
RNS Number : 4771I
888 Holdings plc
31 August 2016
31 August 2016
888 Holdings Public Limited Company
("888" or the "Group")
Half Yearly Report for the six months ended 30 June 2016
Outstanding Casino and Sport growth drives record revenue
performance
888, one of the world's most popular online gaming entertainment
and solutions providers, announces its half yearly results for the
six months ended 30 June 2016 (the "period").
Financial Highlights(#)
-- Revenue increased by 19% to US$262.0m (H1 2015: US$220.0m)
-- B2C revenue increased by 21% to US$229.5m (H1 2015: US$189.6m)
-- Casino revenue increased by 31% to US$137.4m (H1 2015: US$104.9m)
-- Sport revenue increased by 63% to US$25.0m (H1 2015: US$15.3m)
-- Revenue from regulated markets increased 29% and represents
63% (H1 2015: 58%) of Group revenue
-- Adjusted EBITDA* increased by 8% to US$44.1m (H1 2015:
US$40.9m); EBITDA increased by 36% to US$38.2m (H1 2015: US$28.0m)
despite adverse currency movements of US$3 million
-- Profit before tax increased by 39% to US$27.8m (H1 2015: US$20.0m)
-- Interim dividend of 3.8c per share (H1 2015: 3.5c per share)
Operational Highlights
-- Very strong Casino performance with active players in Q2 2016
up 35% year on year driven by innovative CRM and premium
content
-- Outstanding Sport growth boosted by successful Euro 2016,
effective and accelerated marketing investment as well as launching
in new regulated markets (Italy and Denmark)
-- Mobile driving growth across product verticals and accounting
for 56% of UK revenue (H1 2015: 43%)
-- Continued strong progress in Spain with full product suite driving revenue up 58%
-- Excellent momentum in Italy with revenue up 44% supported by the launch of Sport in Q1 2016
-- Continued encouraging performance in Denmark following successful launch in Q3 2015
-- Casino, Poker and Sport real money registered customer
accounts of 21.9m, up 7% from 31 December 2015
Itai Frieberger, Chief Executive Officer of 888, commented:
"888 has delivered a very encouraging performance in H1 2016,
resulting in a 19% increase in Group revenue to a record $262.0
million. This strong outcome was driven by outstanding momentum at
888Casino and 888Sport where we achieved impressive revenue
increases of 31% and 63% respectively.
In line with our strategic focus we have made further excellent
progress developing 888 in regulated markets and have grown
regulated revenue by 29% against the prior year, reflecting strong
performances in the UK, Spain and Italy as well as 888's recent
successful launch in Denmark.
888's continued success is built on our first class technology
and core expertise in CRM, marketing and analytics. These
strengths, along with the fantastic efforts of our highly skilled
and dynamic team, mean that the business is in excellent shape to
deliver long term sustainable growth. Trading in Q3 has started
well with average daily revenue until 27 August 2016 15 per cent.
above strong previous year comparatives and 22 per cent. higher on
a like for like basis. With this strong momentum the Board remains
confident of delivering against expectations for the full
year."
(#) Percentages calculated on underlying figures before
rounding
* As defined in the table below
Financial Summary
Six months Six months Change Change
ended ended Like for Reported
30 June 30 June like(2)
2016(1) 2015(1)
(restated(3)
US$ million )
US$ million
-------------------------------- ------------ ------------- --------- ---------
Revenue (including
VAT) - B2C
Casino 141.5 108.7 34% 30%
Poker 43.1 46.2 (8%) (7%)
Bingo 23.1 22.6 9% 2%
Sport(3) 25.0 15.3 71% 63%
Emerging Offering(3) 1.8 1.7 10% 10%
Total B2C 234.5 194.5 23% 21%
B2B(3) 32.5 30.6 11% 6%
---------
Revenue (including
VAT) 267.0 225.1 22% 19%
-------------------------------- ------------ ------------- --------- ---------
VAT (5.0) (5.1)
---------
Revenue 262.0 220.0 22% 19%
-------------------------------- ------------ ------------- --------- ---------
Operating expenses(4) (67.5) (60.8)
Gaming duties(5) (30.2) (21.8)
Research and development
expenses (15.8) (16.4)
Selling and marketing
expenses (90.3) (67.1)
Administrative expenses(6) (14.1) (13.0)
Adjusted EBITDA(4,5,6) 44.1 40.9 8%
-------------------------------- ------------ ------------- --------- ---------
Depreciation and amortisation (9.7) (9.4)
Share benefit charges,
finance and other (3.9) (1.0)
Exceptional acquisition
costs - (7.0)
Exceptional retroactive
duties and associated
charges (2.7) (3.5)
Profit before tax 27.8 20.0 39%
-------------------------------- ------------ ------------- --------- ---------
Basic earnings per
share 6.1c 4.4c 39%
-------------------------------- ------------ ------------- --------- ---------
Reconciliation of profit before tax to EBITDA and Adjusted
EBITDA
Six months Six months
ended ended
30 June 30 June
2016(1) 2015(1)
US$ million US$ million
----------------------------------- ------------- -------------
Profit before tax 27.8 20.0
----------------------------------- ------------- -------------
Finance expense (income), net 0.7 (1.4)
Depreciation 3.9 4.5
Amortisation 5.8 4.9
EBITDA 38.2 28.0
Exceptional acquisition costs - 7.0
Exceptional retroactive duties
and associated charges 2.7 3.5
Share benefit charges 3.2 2.4
----------------------------------- ------------- -------------
Adjusted EBITDA 44.1 40.9
----------------------------------- ------------- -------------
(1) Totals may not sum due to rounding.
(2) The Group reports its financial results in US dollars but
generates the majority of its revenue from customers using other
currencies. Due to the strong US dollar in H1 2016, reported
revenue was adversely impacted. Like for like revenue has been
calculated, with the exception of Poker, by applying H1 2015
exchange rates to revenue generated during H1 2016. Poker was also
adversely impacted by the strong US dollar but only a small
adjustment has been made, due to the indirect impact on revenue of
the reduction in the purchasing power of local currencies.
(3) Sport, which was previously included in the Emerging
Offerings segment, is presented as a standalone segment. Brand
licensing on third party platforms, which was previously included
in the Emerging Offerings segment, is now included in the B2B
segment. These changes are described in note 2 to the financial
statements.
(4) Excluding depreciation of US$3.9 million (H1 2015: US$4.5
million) and amortisation of US$5.8 million (H1 2015: US$4.9
million).
(5) Excluding exceptional retroactive duties and associated
charges of US$2.7 million in respect of gaming taxes relating to
activity in prior years (H1 2015: US$3.5 million).
(6) Excluding share benefit charges of US$3.2 million (H1 2015:
US$2.4 million).
Webcast and Conference Call:
Itai Frieberger, Chief Executive Officer and Aviad Kobrine,
Chief Financial Officer, will be hosting a presentation by webcast
and conference call for analysts today at 10:00am BST available
from the investor relations section of 888's website
(http://corporate.888.com/investor-relations/reports-and-presentations).
For further information please contact 888@hudsonsandler.com or
call +44 (0)207 796 4133.
Enquiries and further information:
888 Holdings Plc: +350 200 49 800
Itai Frieberger, Chief Executive
Officer
Aviad Kobrine, Chief Financial
Officer
+44(0) 207 796
Hudson Sandler 4133
Alex Brennan
Andrew Hayes
Bertie Berger
Notes to Editors:
888 Holdings Public Limited Company (888) is one of the world's
most popular online gaming entertainment and solutions providers.
888's mission is to supply its customers with innovative and
market-leading online gaming products, above all in safe and secure
environment.
888 has been at the forefront of the online gaming industry
since foundation in 1997, providing to players and B2B partners an
always innovative and world-class online gaming experience. At the
heart of 888's business is its proprietary gaming technology and
associated platforms.
The Group is structured into two lines of business: B2C, under
the 888 brands, and B2B, conducted through Dragonfish, which
provides partners a leading platform through which to establish an
online gaming presence and monetise their own brands.
888's consumer facing websites offer more than just online
gaming. They are entertainment destinations: places where people
can enjoy a truly interactive experience and be part of an online
community that shares common interests. 888's strong and trusted
brands are all accessible through www.888.com.
Find out more about 888 at http://corporate.888.com/.
This announcement includes statements that are, or may be deemed
to be, "forward-looking statements". By their nature,
forward-looking statements involve risk and uncertainty since they
relate to future events and circumstances. Forward-looking
statements may and often do differ materially from actual results.
Any forward-looking statements in this announcement reflect 888's
view with respect to future events as at the date of this
announcement. Save as required by law or by the Listing Rules of
the UK Listing Authority, 888 undertakes no obligation publicly to
release the results of any revisions to any forward-looking
statements in this announcement that may occur due to any change in
its expectations or to reflect events or circumstances after the
date of this announcement.
Chief Executive Officer's Review
Introduction
888 has delivered a very encouraging performance in the first
half of 2016 and recorded a 19% increase in revenue against the
prior year to a record $262.0 million (H1 2015: US$220.0 million).
Strong operational progress continued with 5% and 10% year on year
increases in active B2C Casino and Poker customers in Q1 2016 and
Q2 2016 respectively and a 22% increase in B2C first time
depositors in H1 2016 against the comparable period in the prior
year. This result has again been underpinned by the Group's core
strengths: our first-class technology and expertise in CRM,
marketing and business analytics.
We have continued to deliver excellent progress against our
focused growth strategy, a core element of which is expanding in
regulated markets where we are able to leverage the Group's full
marketing expertise for the long term development of 888's brands.
This strategic focus is reflected by our revenue increase from
regulated markets during H1 2016 of 29%, which significantly
outpaced the 5% increase from non-regulated markets. Revenue from
regulated markets increased to 63% of total revenue while revenue
from regulated and taxed markets(2) increased to 72% of total
revenue (H1 2015: 58% and 66% respectively). This progress was
supported by the successful launch of 888 in Denmark at the end of
the third quarter of 2015 as well as strong momentum in the UK,
Spain and Italy.
Financial Review
Group revenue in the first half was up 19% to US$262.0 million
(H1 2015: US$220.0 million), which was driven by our core B2C
business where there were outstanding results in Casino and
Sport.
Operating expenses(1) increased by 11% to US$67.5 million (H1
2015: US$60.8 million) primarily as a result of higher commissions
and royalties required to support 888's improved Sport performance
as well as the Group's Live Casino offering.
Gaming duties(1) increased to US$30.2 million (H1 2015: US$21.8
million), primarily reflecting greater revenues in the UK, Spain
and Italy as well as gaming duties in newly regulated and taxed
markets namely Denmark, Austria, Romania and Ireland.
Research and development expenses in the income statement
decreased by 3% to US$15.8 million (H1 2015: US$16.4 million).
However, including capitalised expenses, overall research and
development spend increased by 6% to reflect our continued focus on
product development.
Selling and marketing expenses increased 34% to US$90.3 million
(H1 2015: US$67.1 million) and the ratio of marketing expenses to
revenue increased to 34.4% (H1 2015: 30.5%) reflecting management's
strategic decision to invest in Casino and to accelerate targeted
investment including in Sport marketing activities, which in turn
helped to deliver 63% growth in Sport revenue and 22% in first time
depositors for the period.
Adjusted EBITDA for the period increased 8% to US$44.1 million
(H1 2015: US$40.9 million). This is a pleasing outcome given that
during H1 2016 the Group incurred newly imposed gaming duties and
value added tax of US$4.0 million. The Adjusted EBITDA margin
decreased to 16.8% (H1 2015: 18.6%). EBITDA for the period
increased 36% to US$38.2m (H1 2015: US$28.0m). This is a strong
result given that the Group continued to face external headwinds
during the period that affected our financial results including
currency headwinds, new gaming duties and value added tax imposed
in various jurisdictions, which were not imposed during the
comparable period last year.
Exceptional retroactive duties and associated charges of US$2.7
million were incurred in respect of gaming taxes relating to
activity in prior years (H1 2015: US$3.5 million).
Depreciation and amortisation costs were US$9.7 million (H1
2015: US$9.4 million). The Group recorded a non-cash share benefit
charge of US$3.2 million (H1 2015: US$2.4 million) mainly
attributed to long-term incentive equity awards granted to eligible
employees.
Finance income of US$1.2 million (H1 2015: US$1.4 million) less
finance expenses of US$1.9 million (H1 2015: nil), resulted in net
finance expenses of US$0.7 million (H1 2015: income of US$1.4
million). The change compared to H1 2015 is mainly attributable to
the devaluation of the pound following the referendum in the UK on
23 June 2016 on the valuation of assets and liabilities denominated
in pounds.
Profit before tax increased by 39% to US$27.8 million (H1 2015:
US$20.0 million).
Taxation for the period was US$5.8 million (H1 2015: US$4.3
million). The higher tax charge is related to withholding tax on
dividends distributed by a subsidiary to the parent company. Profit
after tax increased by 40% to US$22.0 million (H1 2015: $15.7
million).
(1) As defined in table set out on page 2.
(2) Regulated and taxed markets refers to jurisdictions where
there are regulations in place or where the Group is liable for
gaming duties or VAT.
The Group's balance sheet remain strong with no financial
indebtedness.
Net cash generated from operating activities was US$15.5 million
(H1 2015: US$30.7 million). The year on year decrease is primarily
a result of payments of US$11.5 million made during the period
relating to costs incurred during 2015 in respect of UK point of
consumption tax and VAT (H1 2015: payments of US$3.0 million). In
addition, H1 2016 saw a payment of US$8.0 million in respect of
exceptional retroactive duties and associated charges.
Dividend
Given the Group's performance and the Board's confidence in the
outlook it has declared an interim dividend of 3.8c per share (H1
2015: 3.5c per share).
B2C Review
Active B2C customers and first time depositors, two core key
performance indicators of the B2C business, increased 10% and 22%
respectively year on year reflecting the effectiveness of the
Group's CRM and marketing. B2C Revenue increased 21% to US$229.5
million (H1 2015: US$189.6 million) primarily driven by an
outstanding Casino performance, the continued rapid development of
888Sport and the strength of the Group's offer on mobile
devices.
Mobile remains a key driver in terms of revenue, deposits and
customer recruitment across product verticals for 888 and B2C
revenue from mobile devices in the UK increased to 56% (H1 2015:
43%) of total UK revenue with customer recruitment from mobile
devices also rising significantly.
Casino
888Casino maintained its outstanding momentum recording a 36%
increase in active players and 31% increase in revenue to US$137.4
million (H1 2015: US$104.9 million). This excellent result was
driven by strong performances across a number of regulated markets,
notably the UK, Spain and Italy.
888Casino players continue to enjoy the Group's unrivalled mix
of in-house developed content alongside third party games as well
as a first class experience on mobile devices. The appeal of 888's
casino proposition alongside our leading CRM and increased customer
recruitment, which benefited from the success of the new 777.com
brand launched at the end of 2015 and cross-sell from other
verticals, notably Sport, continues to drive our success in this
vertical.
Poker
888Poker again outperformed against a tough market backdrop
increasing first time depositors by 3% and maintaining the Group's
position at number two in the global PokerScout liquidity rankings.
888Poker continues to be recognised as a leading online poker
destination for recreational players and benefits from a fully
integrated casino gaming suite and sports betting proposition,
which helps to drive important cross-sell to other verticals.
Despite 888's increase in first time depositors, Poker revenue
declined 6% compared to the previous period reflecting the
challenging broader market dynamics.
Bingo
888's bingo brands benefit from a steady flow of fresh new
content including in-house developed games, new shared progressive
jackpots and a strong mobile proposition. Together these enhance
customer appeal and differentiate 888 in the competitive bingo
market.
The Group delivered a 2% year on year increase in Bingo revenue
and a 9% increase on a like for like basis* reflecting the weaker
sterling against our US$ reporting currency. Bingo active players
also increased by 1% against the comparable prior year period
reflecting the appeal of our brands as well as the success of 888's
marketing activity and CRM.
Sport
Sport continues to represent a major growth opportunity for 888
both in terms of revenue and customer acquisition and, to reflect
this, the Group is now presenting Sport as a standalone operational
segment (having previously been included as part of the Group's
Emerging Offering).
Sport revenue for the period of US$25.0 million (H1 2015:
US$15.3 million) was a 63% increase against strong comparatives in
the prior year. This outstanding performance was supported by
accelerated marketing investment which is strengthening customer
recognition of 888Sport as a credible sports betting destination
and helped to deliver a very successful Euro 2016 for the Group.
888Sport also benefited from the launches into Spain in the second
half of 2014, Denmark towards the end of 2015 and Italy during the
first quarter of this year as well as a constantly improving range
of markets and live bets for customers to enjoy.
B2B Review
Revenue from Dragonfish, 888's B2B offering, increased 7% to
US$32.5 million (H1 2015: US$30.4 million) with growth primarily
driven through our bingo network, to which we added a further 16
new skins during the period.
We continue to enhance and develop our B2B proposition to
deliver growth for 888 and our B2B partners. Casinoflex, which was
launched as a brand towards the end of 2015, and the milestone
interstate poker network in the US, launched in February 2015, are
notable examples of this.
* As defined in footnote 2 on page 2.
UK & Europe
888 continued to deliver strong growth in the core UK market
with revenue increasing 18% year on year to US$121.1 million (H1
2015: US$102.8 million), driven by continued momentum in Casino and
Sport and supported by innovative multi-channel marketing
initiatives and CRM success. Despite this strong performance, UK
revenue continued to represent 46% of total Group revenue (H1 2015:
47%) which is a reflection of the strong progress also delivered
across other regulated markets.
Europe (excluding UK) revenue increased by 32% to US$107.5
million (2015: US$81.2 million). This was driven by very strong
performances in Spain, with revenue up 58% year on year, and Italy,
with revenue up 44% year on year, as well as contributions from new
regulated markets.
In Spain which is now the Group's second largest market, we
continued our strong performance and momentum. We are benefitting
from the full product suite we now offer in the Spanish market
across mobile and desktop platforms following the successful
launches of 888sport.es in the second half of 2014 and slot games
towards the end of the first half of 2015. The scope and strength
of our offering in Spain is delivering further traction for 888 as
well as enabling the Group to capitalise on cross-sell
opportunities and we are confident of achieving further
expansion.
In Italy we successfully launched Sport in Q1 2016, supported by
online and offline marketing campaigns, which has increased revenue
and enabled cross sell opportunities to Casino, which continues to
benefit from fresh new content and games.
In Denmark, where we received our license towards the end of
2015 and offer Casino, Poker and Sport, we continue to see
encouraging trends across product verticals.
888's significant experience of successfully entering regulated
markets and rapidly developing leading positions in those markets
means that the Group continues to be well placed to capitalise on
positive regulatory developments. We continue to monitor closely
the regulatory landscape in Europe and are in the process of
finalising our permanent licence in Romania for casino, poker and
sports betting, where we currently operate under an interim
licence. We continue to follow developments in the Netherlands and
the Czech Republic (both of which are in advanced stages of
reforming their regulatory regimes) as well as other European
markets that are considering or are in the process of reforming
their laws and regulations applicable to our business. On a broader
level, we are assessing any potential impact of the UK's decision
to leave the European Union on our business in various EU
jurisdictions.
US
Trading in the US market has been in line with our expectations.
We are benefitting from the successful launch of our shared poker
player liquidity across Delaware and Nevada early in the first half
of last year and we believe that pooled liquidity arrangements will
be a key feature of future states as and when they regulate. With
our unique position and experience of the US market, we remain
confident that 888 remains well placed to capitalise on future
potential regulatory developments.
Going Concern
In considering the going concern basis, the directors reviewed
the Group's operations, its financial position, its forecasts and
the Group's financial risk management. The directors consider that
the Group has adequate resources to continue in operational
existence for the foreseeable future and that it is therefore
appropriate to adopt the going concern basis in preparing these
financial statements.
Current Trading and Outlook
888 has a clear organic growth strategy and we will remain
focused on expanding the Group's presence in regulated markets,
exploiting opportunities across product verticals - with Sport in
particular a key area of focus and investment - and appraising
strategic M&A opportunities.
Trading in Q3 has started well with increases in deposits,
activity and customer recruitment levels. Average daily revenue
until 27 August 2016 is 15 per cent. above strong previous year
comparatives and 22 per cent. higher on a like for like basis,
driven by casino and sport. Whilst we will continue to face some
external headwinds including the expansion of gaming duty on
casino, poker and bingo free bets in the UK due to take effect from
the second half of 2017 and a weakening of the GB Pound following
the UK's vote to leave the European Union in June of this year,
underpinned by the proven strengths of the Group's business model
the Board remains confident of achieving its full year
expectations.
With the Group's strong operational momentum, first class
technology and core expertise in analytics, CRM and marketing, 888
is in excellent shape and we look forward with confidence as we
continue our long term development.
Itai Frieberger
Chief Executive Officer
31 August 2016
Principal Risks and Uncertainties
In addition to the risks faced by businesses generally and
online businesses in particular, the Group is exposed to specific
political risks, regulatory risks, taxation risks and technology
risks arising from its operations.
The key principal risks and uncertainties are consistent with
those included in the 2015 Annual Report and Accounts, other than
the addition of the Brexit risk described below, and summarised as
follows:
The Group is exposed to political and regulatory risk as regards
"Brexit". On 23 June 2016 the UK decided, through a referendum,
that it should leave the European Union, although the formal
process to do so has not yet started. The implications of the UK's
decision are unclear and will take a number of years to determine,
including the minimum of two years between the UK giving notice of
its intention to leave and it leaving. At this point the position
of Gibraltar, driving the ability of the Group to continue to rely
on the EU principles that are a major part of the Group's
regulatory strategy regarding substantial EU markets, remains
unclear. The Group continues to monitor this political risk and is
engaged with the Government of Gibraltar and Gibraltar online
gaming industry bodies in managing the Group's response to this
process.
The regulatory framework of online gaming is dynamic and
complex. Certain jurisdictions have regulated online gaming, and in
many of those jurisdictions the Group holds licences. In some
cases, lack of clarity in the regulations, or conflicting
legislative and regulatory developments, mean that the Group may
risk failing to obtain an appropriate licence, having existing
licences adversely affected, or being subject to other regulatory
sanctions. The Group manages its regulatory risk by routinely
consulting with legal advisers in the jurisdictions where its
services are offered or are accessible, where necessary obtaining
formal legal opinions from local counsel, and by routinely
monitoring changes in the law that may be applicable to its
operations and blocking customers from certain jurisdictions.
The Group's taxation risk arises both due to gaming duties and
taxes to which it may be subject in jurisdictions in which it holds
regulatory licences, as well as to corporate level taxes, value
added taxes and the like. As with regulatory matters, lack of
clarity in local regulations may give rise to disagreements between
the Group and taxation authorities as to the amount of duties or
taxes payable. In addition, whilst the Group aims to ensure that
each legal entity within the Group is a tax resident of the
jurisdiction in which it is incorporated and has no taxable
presence in any other jurisdiction, certain jurisdictions may seek
to tax the Group's activity whether due to an alleged presence of
the Group in such jurisdiction due to the presence of customers of
the Group in such jurisdiction or due to other factors.
The Group also has a contingent liability due to the significant
uncertainty as to whether VAT is due in respect of certain services
provided by the Group to customers in certain EU Member States
prior to 2015.
The Group manages its taxation risk by actively monitoring
taxation risk in the relevant jurisdictions and taking such steps
as it considers necessary to minimise such risks.
The Group's technology risks arise due to the dependence of the
Group on the reliable performance of its IT systems, which may be
affected by unauthorised access, cyber attacks, DDoS, theft or
misuse of data by internal or external parties, or disrupted by by
increases in usage, human error, natural hazards or disasters or
other events. In order to manage its technology risk, the Group
uses multiple technical solutions and common standards, as well as
investing in technologies and procedures aimed at monitoring and
protecting its networks from malicious attacks and other such
risks, and its systems are routinely subjected to internal and
external security scans and assessments as well as independent
audits. The Group furthermore has a disaster recovery site to
ensure full recovery in the event of disaster, with all critical
data replicated to the disaster recovery site and stored off-site
on a daily basis, in addition to full network infrastructure
redundancy, whilst regularly reviewing its service providers.
Underage and problem gaming are inherent risks associated with
the online gaming industry. The Group devotes considerable
resources to putting in place prevention measures coupled with
strict internal procedures designed to prevent underage players
from accessing its real money sites. In addition, the Group
promotes a safe and responsible gaming environment to its customers
supplemented by its corporate culture.
In line with its strategy, the Group has consolidated its
position in the B2B market to be focused on fewer, larger B2B
contracts. However, this strategy also gives rise to commercial
risks in that the Group is more exposed to non-renewal or
termination of existing contracts.
Condensed Consolidated Income Statement
For the six months ended 30 June 2016
Six months Six months
ended ended
30 June 30 June
2016 2015
US $ million US $ million
Note (unaudited)
-------------------------------------- ---- --------------------------
Revenue 2 262.0 220.0
Revenue (including VAT) 267.0 225.1
VAT 2 (5.0) (5.1)
-------------------------------------- ---- ------------ ------------
Operating expenses (77.2) (70.2)
Gaming duties 3 (32.9) (25.3)
Research and development expenses (15.8) (16.4)
Selling and marketing expenses 3 (90.3) (67.1)
Administrative expenses (17.3) (15.4)
Exceptional acquisition costs 4 - (7.0)
Operating profit before exceptional
acquisition costs, exceptional
retroactive duties and associated
charges and share benefit
charges 34.4 31.5
Exceptional acquisition costs 4 - (7.0)
Exceptional retroactive duties
and associated charges 4 (2.7) (3.5)
Share benefit charges (3.2) (2.4)
-------------------------------------- ---- ------------ ------------
Operating profit 3 28.5 18.6
Finance income 1.2 1.4
Finance expenses (1.9) -
Profit before tax 27.8 20.0
Taxation (5.8) (4.3)
-------------------------------------- ---- ------------ ------------
Profit after tax for the period
attributable to equity holders
of the parent 22.0 15.7
-------------------------------------- ---- ------------ ------------
Earnings per share 5
Basic 6.1c 4.4c
Diluted 6.0c 4.4c
-------------------------------------- ---- ------------ ------------
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2016
Six months Six months
ended ended
30 June 30 June
2016 2015
US $ million US $ million
(unaudited)
Profit for the period 22.0 15.7
Items that may be reclassified
subsequently to profit or loss
-------------------------------------- ------------ ------------
Exchange differences on translation
of foreign operations 0.2 (0.6)
Total other comprehensive income
for the period 0.2 (0.6)
-------------------------------------- ------------ ------------
Total comprehensive income for
the period attributable to equity
holders of the parent 22.2 15.1
-------------------------------------- ------------ ------------
Condensed Consolidated Balance Sheet
At 30 June 2016
30 June 31 December
2016 2015
US $ million US $ million
Note (unaudited) (audited)
Assets
Non-current assets
Goodwill and other intangible assets 159.3 157.3
Property, plant and equipment 8.9 11.2
Investments 8 1.5 1.6
Non-current receivables 0.7 0.8
Deferred tax assets 1.3 1.2
---------------------------------------------- ---- ------------ ------------
171.7 172.1
Current assets
Cash and cash equivalents 143.0 178.6
Trade and other receivables 36.2 32.9
Income tax receivables 2.0 2.7
---------------------------------------------- ---- ------------ ------------
181.2 214.2
Total assets 352.9 386.3
---------------------------------------------- ---- ------------ ------------
Equity and liabilities
Equity attributable to equity holders of
the parent
Share capital 3.2 3.2
Share premium 3.1 2.2
Retained earnings 139.2 156.8
---------------------------------------------- ---- ------------ ------------
Total equity attributable to equity holders
of the parent 145.5 162.2
Liabilities
Current liabilities
Trade and other payables 126.2 137.2
Income tax payable 0.6 2.8
Customer deposits 78.6 82.4
205.4 222.4
Non-current liabilities
Deferred tax liabilities 2.0 1.7
---------------------------------------------- ---- ------------ ------------
Total liabilities 207.4 224.1
Total equity and liabilities 352.9 386.3
---------------------------------------------- ---- ------------ ------------
The condensed financial statements on pages 8 to 20 were
approved and authorised for issue by the Board of Directors on
31 August 2016 and were signed on its behalf by:
Itai Frieberger Aviad Kobrine
Chief Executive Chief Financial
Officer Officer
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2016
Foreign
currency
Share Share Retained translation
capital premium earnings reserve Total
US $ million US $ million US $ million US $ million US $ million
----------------------------- ------------ ------------ ------------ ------------ ------------
Balance at 1 January
2015 (audited) 3.2 1.3 181.1 (0.5) 185.1
Profit after tax for
the period attributable
to equity holders of
the parent - - 15.7 - 15.7
Other comprehensive income
for the period - - - (0.6) (0.6)
----------------------------- ------------ ------------ ------------ ------------ ------------
Total comprehensive income - - 15.7 (0.6) 15.1
Dividend paid - - (41.0) - (41.0)
Equity settled share
benefit charges - - 0.7 - 0.7
Issue of shares to cover
employee share schemes - 0.4 - - 0.4
Balance at 30 June 2015
(unaudited) 3.2 1.7 156.5 (1.1) 160.3
----------------------------- ------------ ------------ ------------ ------------ ------------
Balance at 1 January
2016 (audited) 3.2 2.2 158.4 (1.6) 162.2
----------------------------- ------------ ------------ ------------ ------------ ------------
Profit after tax for
the period attributable
to equity holders of
the parent - - 22.0 - 22.0
Other comprehensive income
for the period - - - 0.2 0.2
----------------------------- ------------ ------------ ------------ ------------ ------------
Total comprehensive income - - 22.0 0.2 22.2
Dividend paid - - (43.0) - (43.0)
Equity settled share
benefit charges - - 3.2 - 3.2
Issue of shares to cover
employee share schemes - 0.9 - - 0.9
Balance at 30 June 2016
(unaudited) 3.2 3.1 140.6 (1.4) 145.5
----------------------------- ------------ ------------ ------------ ------------ ------------
The following describes the nature and purpose of each reserve
within equity.
Share capital - represents the nominal value of shares allotted,
called-up and fully paid.
Share premium - represents the amount subscribed for share
capital in excess of nominal value.
Retained earnings - represents the cumulative net gains and
losses recognised in the consolidated statement of comprehensive
income and other transactions with equity holders.
Foreign currency translation reserve - represents exchange
differences arising from the translation of all Group entities that
have functional currency different from US Dollars.
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2016
Six months Six months
ended ended
30 June 30 June
2016 2015
US $ million US $ million
Note (unaudited)
Cash flows from operating activities
Profit before tax 27.8 20.0
Adjustments for:
Depreciation 3.9 4.5
Amortisation 5.8 4.9
Interest income (0.3) (0.2)
Fair value movements on unrealised
foreign exchange derivatives - (2.5)
Share benefit charges 3.2 2.4
-------------------------------------------- ---- ------------ ------------
40.4 29.1
Increase in trade receivables (0.2) (4.4)
Increase in other receivables (3.6) (2.9)
(Decrease) increase in customer deposits (2.9) 8.4
(Decrease) increase in trade and
other payables (10.9) 4.6
-------------------------------------------- ---- ------------ ------------
Cash generated from operations 22.8 34.8
Income tax paid (7.3) (4.1)
-------------------------------------------- ---- ------------ ------------
Net cash generated from operating
activities 15.5 30.7
Cash flows from investing activities
Acquisition of investment in equity
accounted associates 8 - (1.5)
Acquisition of property, plant and
equipment (1.6) (2.8)
Interest received 0.3 0.2
Acquisition of intangible assets (1.9) (2.0)
Internally generated intangible assets (5.9) (4.7)
-------------------------------------------- ---- ------------ ------------
Net cash used in investing activities (9.1) (10.8)
Cash flows from financing activities
Issue of shares to cover employee
share schemes 0.9 0.4
Dividends paid 9 (43.0) (41.0)
-------------------------------------------- ---- ------------ ------------
Net cash used in financing activities (42.1) (40.6)
-------------------------------------------- ---- ------------ ------------
Net decrease in cash and cash equivalents (35.7) (20.7)
Net foreign exchange difference 0.1 (0.8)
Cash and cash equivalents at the
beginning of the period 178.6 163.1
-------------------------------------------- ---- ------------ ------------
Cash and cash equivalents at the
end of the period(1) 143.0 141.6
-------------------------------------------- ---- ------------ ------------
(1) Cash and cash equivalents includes restricted short-term
deposits of US$3.3 million (2015: US$3.3 million).
Notes to the Condensed Consolidated Financial Statements
1 Basis of preparation
The condensed consolidated half-yearly financial information of
the Group has been prepared in accordance with International
Accounting Standard 34 'Interim Financial Reporting' as adopted in
the EU ('IAS 34'). The half-yearly report has been prepared in
accordance with the Disclosure and Transparency Rules of the
Financial Conduct Authority.
These results have been prepared on the basis of the accounting
policies adopted in the Group's full financial statements for the
year ended 31 December 2015, which are prepared in accordance with
International Financial Reporting Standards as adopted in the EU,
with the exception of the new standards adopted during 2016. In
addition, the Group changed its operating segment disclosures in
the period and restated its comparatives for the period ended 30
June 2015. This is described in more detail in note 2.
The following standards, interpretations and amendments issued
by the IASB, have been adopted by the Group during the period with
no significant impact on its consolidated results or financial
position:
-- Amendments to IAS 1 - Disclosure Initiative
-- Amendments to IAS 16 and IAS 38 - Clarification of Acceptable
Methods of Depreciation and Amortisation
-- Amendments to IAS 16 and IAS 41 - Agriculture: Bearer Plants
-- Amendments to IAS 27 - Equity Method in Separate Financial Statements
-- Amendments to IFRS 10, IFRS 12 and IAS 28 - Investment
Entities: Applying the Consolidation Exception
-- Amendments to IFRS 11 - Accounting for Acquisitions of Interests in Joint Operations
-- IFRS 14 - Regulatory Deferral Accounts
-- Annual Improvements 2012-2014 Cycle including minor
amendments to IFRS 5 - Non-Current Assets Held for Sale and
Discontinued Operations, IFRS 7 - Financial Instruments:
Disclosures, IAS 19 - Employee Benefits and IAS 34 - Interim
Financial Reporting.
The financial information is presented in US Dollars (US$
million) because that is the currency the Group primarily operates
in.
The comparatives for the year ended 31 December 2015 are not the
Group's full statutory accounts for that year. A copy of the
statutory accounts for that year has been delivered to the
Registrar of Companies in Gibraltar and is also available from the
Company's website. The auditor's report on those accounts was
unqualified and did not contain statements under Section 257(1)(a)
and Section 258(2) of the Gibraltar Companies Act.
The condensed consolidated set of financial statements included
in this half-yearly financial report is unaudited and does not
constitute statutory accounts.
2 Segment information
Six months ended 30 June 2016
B2C B2B(1) Consolidated
------ ------------
Emerging
Casino Poker Bingo Sport(1) Offerings(1) Total
B2C
------ ----- ----- -------- ------------ ----- ------ ------------
US $ million US $ million
--------------------------------------------------- --------------------
(unaudited)
-------------------- -------------------------------------------------------------------------
Revenue 137.4 42.2 23.1 25.0 1.8 229.5 32.5 262.0
Revenue (including
VAT) 141.5 43.1 23.1 25.0 1.8 234.5 32.5 267.0
VAT (4.1) (0.9) - - - (5.0) - (5.0)
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Result
Segment result(2) 91.6 17.3 108.9
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Unallocated
corporate
expenses(3) (80.4)
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Operating
profit 28.5
Finance income 1.2
Finance expenses (1.9)
Taxation (5.8)
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Profit for
the period 22.0
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Assets
Unallocated
corporate
assets 352.9
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Total assets 352.9
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Liabilities
Segment liabilities 69.6 9.0 78.6
Unallocated
corporate
liabilities 126.8
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Total liabilities 205.4
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
(1) The Group has changed its operating segments in the period
to reflect a change in the way that the business is managed and
reported internally. Sport is now presented separately, having
previously been reported in Emerging Offerings. Brand licensing on
third party platforms, which was previously included in Emerging
Offerings, is now included in the B2B segment. The comparative
segment results for the six months ended 30 June 2015 have been
restated to reflect this change, as described on the following
page.
(2) Revenue net of chargebacks, payment service providers'
commissions, gaming duties, VAT, royalties payable to third parties
and selling and marketing expenses.
(3) Including staff costs, corporate professional expenses,
other administrative expenses, depreciation, amortisation, share
benefit charges and exceptional retroactive duties and associated
charges.
Notes to the Condensed Consolidated Financial Statements
2 Segment information (continued)
Six months ended 30 June 2015 (restated(1)
)
B2C B2B(1) Consolidated
------ ------------
Emerging
Casino Poker Bingo Sport(1) Offerings(1) Total
B2C
------ ----- ----- -------- ------------ ----- ------ ------------
US $ million US $ million
--------------------------------------------------- --------------------
(unaudited)
-------------------- -------------------------------------------------------------------------
Revenue 104.9 45.1 22.6 15.3 1.7 189.6 30.4 220.0
Revenue (including
VAT) 108.7 46.2 22.6 15.3 1.7 194.5 30.6 225.1
VAT (3.8) (1.1) - - - (4.9) (0.2) (5.1)
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Result
Segment result(2) 85.7 16.5 102.2
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Unallocated
corporate
expenses(3) (83.6)
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Operating
profit 18.6
Finance income 1.4
Taxation (4.3)
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Profit for
the period 15.7
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Assets
Unallocated
corporate
assets 355.5
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Total assets 355.5
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Liabilities
Segment liabilities 62.9 13.7 76.6
Unallocated
corporate
liabilities 118.6
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
Total liabilities 195.2
-------------------- ------ ----- ----- -------- ------------ ----- ------ ------------
(1) The Group has changed its operating segments in the period
to reflect a change in the way that the business is managed and
reported internally. Sport is now presented separately, having
previously been reported in Emerging Offerings. Brand licensing on
third party platforms, which was previously included in Emerging
Offerings, is now included in the B2B segment. The comparative
segment results for the six months ended 30 June 2015 have been
restated to reflect this change. Of the Emerging Offerings revenue
of US$18.5 million, US$15.3 million has been classified in the
Sport segment and US$1.5 million in the B2B segment. Of the
previously reported B2C segment result of US $86.3 million, US$0.6
million relating to brand licensing on third party platforms has
been reclassified in the B2B segment result, reducing the B2C
segment result to US$85.7 million and increasing the B2B segment
result from US$15.9 million to US$16.5 million.
(2) Revenue net of chargebacks, payment service providers'
commissions, gaming duties, VAT, royalties payable to third parties
and selling and marketing expenses.
(3) Including staff costs, corporate professional expenses,
other administrative expenses, exceptional acquisition costs,
depreciation, amortisation, share benefit charges and exceptional
retroactive duties and associated charges.
Other than where amounts are allocated specifically to the B2C
and B2B segments above, the expenses, assets and liabilities relate
jointly to all segments. These amounts are not discretely analysed
between the two operating segments as any allocation would be
arbitrary.
2 Segment information (continued)
Geographical information
The Group's performance can also be reviewed by considering the
geographical markets and geographical locations within which the
Group operates. This information is outlined below:
Revenue by geographical market (based on location of
customer)
Six months Six months
ended ended
30 June 30 June
2016 2015
US $ million US $ million
(unaudited)
---------------------- --------------------------
UK 121.1 102.8
Europe (excluding UK) 107.5 81.2
Americas 22.4 24.7
Rest of world 11.0 11.3
---------------------- ------------ ------------
Total revenue 262.0 220.0
---------------------- ------------ ------------
3 Operating profit
Six months Six months
ended ended
30 June 30 June
2016 2015
US $ million US $ million
(unaudited)
Operating profit is stated after charging:
Staff costs (including executive Directors) 48.7 45.2
Gaming duties(1) 32.9 25.3
Selling and marketing expenses(2) 90.3 67.1
Exceptional acquisition costs(3) - 7.0
Depreciation (within operating expenses) 3.9 4.5
Amortisation (within operating expenses) 5.8 4.9
Chargebacks 2.0 1.5
Payment service providers' commissions 10.9 11.0
-------------------------------------------- ------------ ------------
(1) Gaming duties increase reflecting greater activity in the
UK, Spain and Italy and gaming duties in new regulated markets,
including exceptional retroactive duties and associated charges of
US$2.7 million (2015: US$3.5 million).
(2) Selling and marketing expenses reflecting management's
strategic decision to accelerate targeted investment in Sport
marketing activities during the period.
(3) During the period ended 30 June 2015 the Group incurred
legal and professional costs of US$7.0 million associated with the
subsequently aborted proposed acquisition of bwin.party digital
entertainment plc. These exceptional acquisition costs were
presented separately as they are non-recurring costs and assist in
providing a clearer view of the underlying performance of the
Group.
4 Exceptional items
The Group classifies certain items of income and expense as
exceptional, as the Group considers that it allows for a better
reflection of the underlying performance of the Group. The Group
considers any non-recurring items of income and expense for
classification as exceptional by virtue of their nature and
size.
Six months Six months
ended ended
30 June 30 June
2016 2015
(unaudited)
Exceptional acquisition costs: Legal
and professional costs(1) - 7.0
Exceptional retroactive duties and
associated charges (included within
gaming duties in the consolidated income
statement)(2) 2.7 3.5
------------------------------------------- ---------- ----------
Total exceptional costs 2.7 10.5
------------------------------------------- ---------- ----------
(1) During H1 2015 the Group incurred legal and professional
costs of US$7.0 million associated with the subsequently aborted
proposed acquisition of bwin.party digital entertainment plc.
(2) Exceptional retroactive duties and associated charges of
US$2.7 million in respect of gaming duties relating to activity in
prior years (H1 2015: US$3.5 million).
Notes to the Condensed Consolidated Financial Statements
5 Earnings per share
Basic earnings per share
Basic earnings per share ('EPS') has been calculated by dividing
the profit attributable to ordinary shareholders by the weighted
average number of shares in issue during the period.
Diluted earnings per share
In accordance with IAS 33, 'Earnings per share', the weighted
average number of shares for diluted EPS takes into account all
potentially dilutive equity instruments granted, which are not
included in the number of shares for basic EPS. Certain equity
instruments have been excluded from the calculation of diluted EPS
as their conditions of being issued were not deemed to satisfy the
performance conditions at the end of the reporting period or it
will not be advantageous for holders to exercise them into shares,
in the case of options. The number of equity instruments included
in the diluted EPS calculation consist of 6,953,844 ordinary shares
(H1 2015: 1,335,890) and 122,546 market- value options (H1 2015:
181,833).The number of equity instruments excluded from the diluted
EPS calculation is 2,120,890 (H1 2015: 2,242,920).
Six months Six months
ended ended
30 June 30 June
2016 2015
(unaudited)
Profit for the period attributable to
equity holders of the parent (US$ million) 22.0 15.7
Weighted average number of Ordinary
Shares in issue 357,751,513 355,373,096
Effect of dilutive Ordinary Shares and
share options 7,076,390 1,517,723
Weighted average number of dilutive
Ordinary Shares 364,827,903 356,890,819
-------------------------------------------- ----------- -----------
Basic 6.1c 4.4c
Diluted 6.0c 4.4c
-------------------------------------------- ----------- -----------
Adjusted earnings per share
The Directors believe that EPS excluding exceptional items and
share benefit charges ("Adjusted EPS") better reflects the
underlying performance of the business and assists in providing a
clearer view of the performance of the Group.
Reconciliation of profit to profit excluding exceptional items
and share benefit charges ("Adjusted profit"):
Six months Six months
ended ended
30 June 30 June
2016 2015
US $ million US $ million
(unaudited)
Profit for the period attributable to
equity holders of the parent 22.0 15.7
Exceptional items (see note 4) 2.7 10.5
Share benefit charges 3.2 2.4
Adjusted profit 27.9 28.6
Weighted average number of Ordinary
Shares in issue 357,751,513 355,373,096
Weighted average number of dilutive
Ordinary Shares 364,827,903 356,890,819
---------------------------------------- ------------ ------------
Adjusted basic earnings per share 7.8c 8.0c
Adjusted diluted earnings per share 7.7c 8.0c
---------------------------------------- ------------ ------------
6 Contingent liabilities and regulatory issues
(a) As part of the Board's ongoing regulatory compliance and
operational risk assessment process, it continues to monitor legal
and regulatory developments, and their potential impact on the
business, and continues to take appropriate advice in respect of
these developments.
(b) Given the nature of the legal and regulatory landscape of
the industry, from time to time the Group has received notices,
communications and legal actions from a small number of regulatory
authorities and other parties in respect of its activities. The
Group has taken legal advice as to the manner in which it should
respond and the likelihood of success of such actions. Based on
this advice and the nature of the actions, the Board is unable to
quantify reliably any material outflow of funds that may result, if
any. Accordingly, no provisions have been made.
(c) The Group operates in numerous jurisdictions. Accordingly,
and on the basis of tax advice obtained, the Group is filing tax
returns, providing for and paying all taxes and duties it believes
are due based on local tax laws and transfer pricing agreements.
The Group is also periodically subject to audits and assessments by
local taxing authorities.
There is significant uncertainty as to whether VAT is due in
respect of certain services provided by the Group to customers in
certain European Union Member States prior to 2015. These
uncertainties are in respect of the determination of the place of
supply of some or all of the services provided by the Group prior
to 2015 and, insofar as the place of supply is determined to be the
Member State in which the customer is located, whether a possible
imposition of VAT on relevant services by certain Member States
would be lawful. There is also uncertainty in certain Member States
surrounding the tax base to be applied in the event that it is
ultimately determined that VAT is due on any relevant services.
Based on a thorough legal assessment, the Group considers that it
is unlikely that any liability will arise and has, therefore, not
recorded any liability in the Group financial statements.
Furthermore, given the uncertainties surrounding the quantification
of any VAT which may be payable, the Board believes that any
attempt to either estimate or quantify the range of the amounts
which may reasonably be in dispute would potentially be misleading
and may be prejudicial to the Group's position in defending any
claims for past VAT.
In respect of other taxes and duties, other than as provided in
the Group financial statements, the Board considers it unlikely
that any further liability will arise from the final settlement of
such assessments.
7 Related party transactions
The aggregate amounts payable to key management personnel,
considered to be the directors of the Company, as well as their
share benefit charges, are set out below:
Six months Six months
ended ended
30 June 30 June
2016 2015
US $ million US $ million
(unaudited)
Short term benefits 1.1 1.2
Post-employment benefits 0.1 0.1
Share benefit charges - equity settled 1.9 0.3
Share benefit charges - cash settled - 1.6
---------------------------------------- ------------ ------------
3.1 3.2
---------------------------------------- ------------ ------------
US joint ventures
During the period the Group charged the US joint ventures for
reimbursement of costs US$0.9 million (H1 2015: US$0.9 million), of
which the outstanding balance as at 30 June 2016 is US$0.3 million
(31 December 2015: US$0.2 million).
Investment in associates
During the period the Group charged its associate for the Group
share of the net revenue of US$0.7 million (H1 2015: US$0.5
million), of which the outstanding balance at 30 June 2016 is
US$1.7 million (31 December 2015: US$1.0 million).
Notes to the Condensed Consolidated Financial Statements
8 Investments
US joint ventures
The following entities meet the definition of joint ventures and
have been equity accounted in the consolidated financial
statements:
Effective Effective
interest interest
Country 30 June 31 December
Name of incorporation 2016 2015
--------------------- ------------------- ---------- -------------
AAPN Holdings LLC US 47% 47%
AGN LLC US 47% 47%
AAPN New Jersey LLC US 47% 47%
--------------------- ------------------- ---------- -------------
As at 30 June 2016, AGN LLC ('AGN') remained 100% owned by the
Group. However, the Group considers that due to the manner in which
AGN is operated under the contractual arrangements in the AAPN
Holdings LLC ('AAPN') joint venture agreement, it is regarded as a
joint venture. The Group also has an irrevocable commitment to
contribute its ownership of AGN to AAPN for no consideration upon
fulfilment of certain conditions.
On this basis the three entities AAPN, AAPN New Jersey LLC and
AGN have been equity accounted for, reflecting the Group's
effective 47% interest in their aggregated results and assets.
Group's investment in the US joint ventures had reduced to nil
due to the US joint ventures cumulative losses exceeding the
Group's investment. In the period ended 30 June 2016, the US joint
ventures incurred further losses and, as a result, the Group's
investment remained at nil.
Investment in associates
The following entity meets the definition of an associate and
has been equity accounted in the consolidated financial
statements:
Effective Effective
interest interest
Country 30 June 31 December
Name of incorporation 2016 2015
--------------- ------------------- ---------- -------------
Come2Play Ltd Israel 20% 20%
--------------- ------------------- ---------- -------------
Other investments
The Group holds available for sale investments of US$0.2 million
at 30 June 2016 (31 December 2015: US$0.2 million).
9 Dividends
Six months Six months
ended ended
30 June 30 June
2016 2015
US $ million US $ million
(unaudited)
---------------- --------------------------
Dividends paid 43.0 41.0
---------------- ------------ ------------
During the period, the 2015 final dividend of 4.0c per share and
an additional one-off 8.0c was paid on 12 May 2016 (US$43.0
million).
During 2015, the 2014 final dividend of 11.5c per share was paid
on 15 May 2015 (US$41.0 million) and the 2015 interim dividend of
3.5c per share was paid on 30 September 2015 (US$12.5 million).
The Board of Directors has declared an interim dividend of 3.8c
per share, payable on 6 October 2016.
10 Fair value measurements
At 30 June 2016 and 31 December 2015, the Group's available for
sale investment is measured at fair value. For the remaining
financial assets and liabilities, the Group considers that the book
value approximates to fair value.
Other financial instruments carried at fair value are not
considered material. There were no changes in valuation techniques
or transfers between categories in the period.
Statement of Directors' Responsibilities
The Directors confirm, to the best of their knowledge, that this
condensed set of unaudited financial statements has been prepared
in accordance with IAS 34 as adopted by the European Union, and
that the half-yearly management report includes a fair review of
the information required by DTR 4.2.7R and DTR 4.2.8R of the
Disclosure and Transparency Rules of the UK Financial Conduct
Authority.
A list of the current Directors is maintained on the 888
Holdings Public Limited Company Website:
www.888holdingsplc.com.
By order of the Board
Itai Frieberger Aviad Kobrine
Chief Executive Officer Chief Financial Officer
Independent Review Report to 888 Holdings Public Limited
Company
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2016 which comprises the Consolidated
Income Statement, the Consolidated Statement of Comprehensive
Income, the Consolidated Balance Sheet, the Consolidated Statement
of Changes in Equity, the Consolidated Cash Flow Statement and the
related explanatory notes 1 to 10. We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the Company in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
Company, for our work, for this report, or for the conclusions we
have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. The
condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Half-Yearly Financial Information Performed by the Independent
Auditor of the Entity', issued by the Auditing Practices Board for
use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2016 is not prepared, in all material respects, in accordance
with International Accounting Standard 34, as adopted by the
European Union, and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
London, United Kingdom
31 August 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR URAWRNRAWOAR
(END) Dow Jones Newswires
August 31, 2016 02:00 ET (06:00 GMT)