Sirius Pet Regulatory News (SRSP)

31 Jan 2007 10:57

Global Gaming Technologies PLC31 January 2007 31 January 2007 GLOBAL GAMING TECHNOLOGIES PLC Preliminary Results for the Year ended 31 July 2006 Chairman's Statement Results The Board of Global Gaming Technologies plc ("GGT" or "the Company") announcestoday the Group's audited results for the year ended 31 July 2006. In theperiod under review the Group recorded a loss before tax and impairment ofgoodwill of £1,363,992. Following the reorganisation of the Company announcedon 27 June, the Board has reviewed the carrying value of goodwill resulting fromthe acquisition of Event Data Correlation Limited in 2005 and decided to apply anon-cash impairment adjustment of £10.54m, which is charged to the profit andloss account for the year. As a result there is a loss before tax and aftergoodwill impairment adjustment of £11.90 million. There is a loss per share of6.37p (2005: loss per share: 0.84p). No dividend is proposed. On 27 June the Board announced that Paul Pullinger, Chief Executive of theCompany and Chris Cleverly, a Non-executive director, the two principalshareholders, had resigned from the Board with immediate effect and that I hadassumed an executive role on the Board for an interim period until a new CEO isappointed. In addition, Corvus Capital Inc, the international investmentcompany headed by Andrew Regan, had acquired shares from Paul Pullinger, ChrisCleverly and a former GGT director giving it a total holding of 48,750,874ordinary shares, equating to 26.0 per cent of GGT's issued share capital. The initial board changes I refer to above and, the arrival of Corvus Capital asa strategic shareholder in the Company, were the first steps in our primaryobjective to re-establish GGT's strategy to build a business providing enablingdata and media technologies to the gaming industry. It is our intention toacquire complementary businesses in the origination and supply of critical dataand content to the gaming industry in order to build a cash generative andprofitable business. In becoming a significant shareholder in GGT, CorvusCapital fully endorses this strategy and GGT can, in turn, benefit from therange of resources available within Corvus Capital to pursue this strategy. We have commenced the dual process of sourcing potential acquisitions andfinding a new Chief Executive for the business, neither of which are mutuallyexclusive. In addition, costs within the business have been stringently cutback and, as I refer to earlier in this statement, the Board has decided to takea very prudent view regarding the treatment of goodwill. Outlook I am pleased to say that we are currently reviewing a number of businesses whichhave met with our initial investment criteria and whilst we are still at anearly stage with each, I am encouraged by the progress made to date and willreport further progress to shareholders as and when it is appropriate to do so. Ron Trenter Chairman 31 January 2007 Enquiries: John Bick tel: 07917 649362 GLOBAL GAMING TECHNOLOGIES PLCGROUP PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 JULY 2006 2006 2005 Notes £ £ Net trading margin (11,646) (302) Administrative expenses:Impairment of goodwill (10,539,668) - Other administrative expenses (1,401,908) (377,972) (11,941,576) (377,972) Other operating income 35,585 19,839 Operating loss 3 (11,917,637) (358,435) Other income 6 13,977 13,392 Loss on ordinary activitiesbefore (11,903,660) (345,043)taxation Tax on loss on ordinary 7 - -activities Loss on ordinary activitiesafter 8 & 18 (11,903,660) (345,043)taxation Loss per share - Basic and diluted 9 £(0.0637) £(0.0084) The profit and loss account has been prepared on the basis that all operations arecontinuing operations. There are no recognised gains and losses other than those passing through theprofit and loss account. The comparatives cover the period from incorporation to 31 July 2005. GLOBAL GAMING TECHNOLOGIES PLCBALANCE SHEETSAS AT 31 JULY 2006 Group Company 2006 2005 2006 2005 Notes £ £ £ £Fixed assetsIntangible assets 10 100,000 11,248,205 - -Tangible assets 11 - 1,844 - -Investments 12 - - 100,000 10,989,540 100,000 11,250,049 100,000 10,989,540 Current assetsDebtors 13 23,799 55,742 11,666 1,110,402Cash at bank and inhand 56,941 750,578 - - 80,740 806,320 11,666 1,110,402Creditors: amountsfalling due withinone year 14 (90,037) (115,392) (48,266) (19,954) Net current assets (9,297) 690,928 (36,600) 1,090,448 Total assets lesscurrent liabilities 90,703 11,940,977 63,400 12,079,988 Capital and reservesCalled up sharecapital 17 471,673 465,146 471,673 465,146Share premium account 18 1,364,673 1,370,990 1,364,673 1,370,990Merger reserve 18 - 10,397,916 - 10,397,916Profit and lossaccount 18 (1,745,643) (293,075) (1,772,946) (154,064) Shareholders' funds -equity interests 19 90,703 11,940,977 63,400 12,079,988 GLOBAL GAMING TECHNOLOGIES PLCGROUP CASH FLOW STATEMENTFOR THE YEAR ENDED 31 JULY 2006 2006 2005 Notes £ £ Net cash outflow from operating 20 (743,745) (534,215)activities Returns on investments and servicingof financeInterest received 13,977 13,392 Net cash inflow from returns on 13,977 13,392investmentsand servicing of finance Capital expenditureReceipts from sales of tangible 380 -fixed assets Net cash inflow from capital expenditure 380 -andfinancial investment Acquisitions and disposalsPurchase of subsidiary 10 35,541 (256,207)undertakingsCash acquired with subsidiary - 26,889undertakings Net cash inflow/(outflow) on acquisitions 35,541 (229,318)anddisposals Net cash outflow before financing (693,847) (750,141) FinancingIssue of ordinary share capital 210 1,675,000Cost of share issue - (174,281) Net cash inflow from financing 210 1,500,719 (Decrease)/increase in cash (693,637) 750,578 GLOBAL GAMING TECHNOLOGIES PLCNOTES TO THE GROUP ACCOUNTSFOR THE YEAR ENDED 31 JULY 2006 1 Accounting policies 1.1 Basis of preparation The accounts have been prepared under the historical cost convention and on a going concern basis. The accounts have been prepared in accordance with United Kingdom applicable accounting standards (United Kingdom Generally Accepted Accounting Practice), which is applied consistently (except as otherwise stated). 1.2 Going concern The financial statements have been prepared on a going concern basis on the basis that the directors have secured sufficient funds to ensure that the company can continue to meet its liabilities as and when they fall due and are actively reviewing future funding requirements. The directors have considered the cash requirements for 12 months from the balance sheet date. The accounts do not contain any adjustments that would be necessary should this basis not be appropriate. 1.3 Basis of consolidation The consolidated profit and loss account and balance sheet include the accounts of the company and its subsidiary undertaking, Event Data Correlation Limited, made up to 31 July 2006. The results of subsidiaries sold or acquired are included in the profit and loss account up to, or from the date control passes. Intra-group sales and profits are eliminated fully on consolidation. A separate profit and loss accounting dealing with the results of the company only has not been presented as permitted by Section 230 of the Companies Act 1985. 1.4 Net trading margin Net trading margin represents the net results of trades placed in the betting markets as the outcome of the bet is settled. The directors consider that for the group's operations during the period, net trading margin is a better description of its generation of income from its principal activity than turnover and hence have used net trading margin as an equivalent for turnover in these accounts. 1.5 Goodwill Goodwill is amortised over its useful economic life, which is considered for each acquisition separately. It is reviewed for impairment at the end of its first full financial year following the acquisition and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill relating to Event Data Correlation Limited is estimated to have a life of 20 years. 1.6 Software development licence The software development licence is stated at cost less amortisation. Amortisation is provided over the two year term of the licence. 1.7 Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less depreciation. Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows: Fixtures, fittings & equipment 33.33% Straight line 1.8 Deferred taxation Deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the accounts. Deferred tax is not provided on timing differences arising from the revaluation of fixed assets where there is no commitment to sell the assets. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted. GLOBAL GAMING TECHNOLOGIES PLC NOTES TO THE GROUP ACCOUNTSFOR THE YEAR ENDED 31 JULY 2006 2 Net trading margin The net trading margin of the group for the year has been derived from its principal activity wholly undertaken in the United Kingdom. 3 Operating loss 2006 2005 £ £ Operating loss is stated after charging: Amortisation of intangible assets 572,996 59,750 Depreciation of owned tangible assets 624 52 Auditors' remuneration 9,750 7,500 Impairment of goodwill (see note 10) 10,539,668 - 4 Directors' emoluments 2006 2005 £ £ Aggregate emoluments 142,892 60,209 The 2005 costs include one month of ownership of the company's subsidary so the figures are not directly comparable. 5 Employees Number of employees The average weekly number of employees during the year was: 2006 2005 Number Number Production/ development 4 4 Administration 5 5 9 9 Employment costs £ £ Wages and salaries 416,469 105,499 Social security costs 12,736 12,575 429,205 118,074 As noted above, the 2005 costs only include one month of ownership of the company's subsidary so the figures are not directly comparable. GLOBAL GAMING TECHNOLOGIES PLC NOTES TO THE GROUP ACCOUNTSFOR THE YEAR ENDED 31 JULY 2006 6 Other income 2006 2005 £ £ Interest receivable and similar income 13,977 13,392 7 Tax on loss on ordinary activities £ £ Current tax Factors affecting the tax charge for the year Loss on ordinary activities before taxation (11,903,660) (345,043) Loss on ordinary activities before taxation (3,571,098) (65,558) multiplied by standard rate of UK corporation tax of 30.00% (2005: 19.00%) Effects of: Expenses not deductible for tax purposes 3,350,228 36,448 Depreciation for period in excess of 3,439 485 capital allowances Consolidation adjustments - 10,878 Movement in tax losses 235,916 17,747 Share option provision adjustments (18,485) - Current tax charge - - The group has estimated losses of £2,044,726 (2005: £1,258,338) which are available to carry forward against future trading profits. No provision has been made for corporation tax on this basis. 8 Loss for the financial year As permitted by section 230 of the Companies Act 1985, the holding company's profit and loss account has not been included in these accounts. The loss for the financial year is made up as follows: 2006 2005 £ £ Holding company's loss for the financial year (12,069,974) (206,032) 9 Loss per share The calculation of the basic loss per share is based on the loss of ordinary activities after taxation of £11,903,660 and on a weighted average number of 186,808,822 Ordinary Shares in issue during the period. There was no dilutive effect from the share options outstanding during the year. GLOBAL GAMING TECHNOLOGIES PLC NOTES TO THE GROUP ACCOUNTSFOR THE YEAR ENDED 31 JULY 2006 10 Intangible fixed assets Group Goodwill Software Total development licence £ £ £ Cost At 1 August 2005 11,295,455 60,000 11,355,455 Adjustments (35,541) - (35,541) At 31 July 2006 11,259,914 60,000 11,319,914 Amortisation At 1 August 2005 57,250 50,000 107,250 Charge for year 562,996 10,000 572,996 Impairment 10,539,668 - 10,539,668 At 31 July 2006 11,159,914 60,000 11,219,914 Net book value At 31 July 2006 100,000 - 100,000 At 31 July 2005 11,238,205 10,000 11,248,205 The goodwill brought forward arose on the acquisition of Event Data Correlation Limited on 27 June 2005. The adjustment relates to VAT on professional fees incurred in respect of the acquisition of Event Data Correlation Limited which was recovered in the year. The directors have undertaken an impairment review of the goodwill arising on the acquisition of Event Data Correlation Limited due to the lack of significant trading in the year and the continuing losses incurred. As a result an impairment provision of £10,539,668 has been recorded in the financial statements. Based on their review, the directors consider that the remaining value represents the recoverable amount of the goodwill at 31 July 2006. GLOBAL GAMING TECHNOLOGIES PLC NOTES TO THE GROUP ACCOUNTSFOR THE YEAR ENDED 31 JULY 2006 11 Tangible fixed assets Group Fixtures, fittings & equipment £ Cost At 1 August 2005 2,000 Disposals (2,000) At 31 July 2006 - Depreciation At 1 August 2005 156 On disposals (780) Charge for the year 624 At 31 July 2006 - Net book value At 31 July 2006 - At 31 July 2005 1,844 GLOBAL GAMING TECHNOLOGIES PLC NOTES TO THE GROUP ACCOUNTSFOR THE YEAR ENDED 31 JULY 2006 12 Fixed Asset Investments Company Shares in subsidiary undertaking £ Cost At 1 August 2005 10,989,540 Adjustment (see note 10) (35,541) Impairment (10,853,999) At 31 July 2006 100,000 At 31 July 2005 10,989,540 Holdings of more than 20% The company holds more than 20% of the share capital of the following companies: Company Country of registration Class Shares held % or incorporation Subsidiary undertakings Event Data Correlation Limited United Kingdom Ordinary 100 The principal activity of these undertakings for the last relevant financial year was as follows: Principal activity Event Data Correlation Limited Software development to exploit real-time statistical data in the online sports betting markets As a result of the impairment review undertaken in the year, which is referred to in Note 10, the directors consider that the carrying value of the investment in Event Data Correlation Limited has been impaired and consequently the carrying value has been written down to £100,000, which the directors consider to be the recoverable amount of the investment at 31 July 2006. 13 Debtors Group Company 2006 2005 2006 2005 £ £ £ £ Trade debtors 6,275 16,285 - - Amounts owed by group undertakings - - - 1,075,640 Other debtors 10,459 24,714 4,999 20,362 Prepayments and accrued income 7,065 14,743 6,667 14,400 23,799 55,742 11,666 1,110,402 GLOBAL GAMING TECHNOLOGIES PLC NOTES TO THE GROUP ACCOUNTSFOR THE YEAR ENDED 31 JULY 2006 14 Creditors : amounts falling due within one year Group Company 2006 2005 2006 2005 £ £ £ £ Trade creditors 54,238 22,244 33,402 2,322 Taxes and social security costs 10,714 22,418 282 - Other creditors 573 - - - Accruals and deferred income 24,512 70,730 14,582 17,632 90,037 115,392 48,266 19,954 15 Provisions for liabilities Deferred tax is calculated at 19% over the following timing differences: Group 2006 2005 £ £ Accelerated capital allowances 1,339 (1,870) Short term timing differences 80,885 - Tax losses available 613,418 239,084 695,642 237,214 Company 2006 2005 £ £ Tax losses available 32,795 2,910 Deferred tax assets of £695,642 (2005: £237,214 - group) and £32,795 (2005: £2,910 - company) have not been recognised in these accounts because there is insufficient certainty over their recoverability. 16 Financial Instruments The group's financial instruments arise directly from its operations. The group does not operate in foreign currencies and is not directly exposed to foreign exchange risk, or interest rate risk. The directors consider that there is no significant difference between the book value and fair value of the group's financial assets and liabilities. GLOBAL GAMING TECHNOLOGIES PLC NOTES TO THE GROUP ACCOUNTSFOR THE YEAR ENDED 31 JULY 2006 17 Share capital 2006 2005 £ £ Authorised 4,000,000,000 Ordinary Shares of .25p each 10,000,000 10,000,000 Allotted, called up and fully paid 188,669,301 (2005: 186,058,334) Ordinary Shares of 471,673 465,146 .25p each At 1 August 2005, 12,980,257 share options were outstanding. These share options replaced equivalent options which had been granted to directors and certain employees in Event Data Correlation Limited on 27 June 2005, when the company issued its own shares in return for shares in that company. The options are exercisable at .25p per Ordinary Share up to 3 March 2015. The options vest in three-monthly tranches. Exercise of the options is not subject to performance criteria. Because of the difference in the par values of the original Event Data Correlation Limited shares, and the Global Gaming Technologies Plc shares, the exercise of each of the options now comprises the issue of Global Gaming Technologies Plc option shares at par to the value of the subscription price that would have been payable had the option holder exercised the options over Event Data Correlation Limited shares, supplemented by the issue of additional bonus shares by application of part of the share premium account of Global Gaming Technologies Plc on a non-pre-emptive basis. During the year options were satisfied by the issue of 84,000 shares at par and the bonus issue of a further 2,526,967 shares. During the period 5,644,675 of the share options have lapsed and 2,610,967 have been exercised at .25p, leaving 4,724,615 outstanding at 31 July 2006. GLOBAL GAMING TECHNOLOGIES PLC NOTES TO THE GROUP ACCOUNTSFOR THE YEAR ENDED 31 JULY 2006 18 Statement of movements on reserves Group and Group and Group Company company company Share Merger Profit and Profit and premium reserve loss account loss account account £ £ £ £ Balance at 1 August 2005 1,370,990 10,397,916 (293,075) (154,064) Retained loss for the year - - (11,903,660) (12,069,974) Share option charge adjustment - - 53,176 53,176 Premium on shares issued during (6,317) - - - the year Transfer - (10,397,916) 10,397,916 10,397,916 Balance at 31 July 2006 1,364,673 - (1,745,643) (1,772,946) The merger reserve arose on the issue of 134,166,667 shares in return for the entire issued share capital of Event Data Correlation Limited. Under s131 of the Companies Act 1985 the company is exempt from the requirement to establish a statutory share premium account to reflect to excess of the value received for these share above their nominal value, the amount has however been recognised in this non-statutory reserve. The transfer from the merger reserve to the profit and loss reserve represents the utilisation of the merger reserve which arises as a result of the write down of the goodwill for the group, and the investment for the company, which originally arose on the acquisition of Event Data Correlation Limited as described in notes 10 and 12. 19 Reconciliation of movements in shareholders' funds 2006 2005 Group £ £ Loss for the financial period (11,903,660) (345,043) New share capital subscribed 210 1,500,719 Shares issued as consideration for subsidiary - 10,733,333 Share option charge adjustment 53,176 51,968 Net (depletion in)/addition to shareholders' funds (11,850,274) 11,940,977 Opening shareholders' funds 11,940,977 - Closing shareholders' funds 90,703 11,940,977 GLOBAL GAMING TECHNOLOGIES PLC NOTES TO THE GROUP ACCOUNTSFOR THE YEAR ENDED 31 JULY 2006 20 Net cash outflow from operating activities 2006 2005 £ £ Reconciliation to operating loss: Operating loss (11,917,637) (358,435) Depreciation of tangible fixed assets 624 52 Amortisation of intangible fixed assets 572,996 59,750 Impairment 10,539,668 - Share option charge 53,176 51,968 Profit on disposal of tangible fixed assets 840 - Decrease/(increase) in debtors 31,943 (30,117) Decrease in creditors (25,355) (257,433) (743,745) (534,215) 21 Transactions with directors £35,585 (2005: £4,839) is included in other operating income in the year relating to the group provision of office services and sale of equipment to Sweet China plc, a company registered in England and Wales and a business in which C. Cleverly is also a director. At 31 July 2006 £5,828 (2005: £2,843) was owed to the group by Sweet China plc. This information is provided by RNS The company news service from the London Stock Exchange