TTR.L Regulatory News (TTR)

13 Mar 2007 07:02

32Red Plc13 March 2007 32Red Plc("32Red" or "the Company") Preliminary results for the year ended 31 December 2006 32Red, the UK focused casino, poker and sportsbook operator today announcespreliminary results for the year ended 31 December 2006. Financial highlights 2006 2005Net gaming win £14.44m £9.77mGross profit £4.36m £3.49m(Loss)/Profit before taxation (£3.74m) £1.30m(Loss)/earnings per share (7.0p) 2.8pCasino revenues £9.42m £8.90mPoker revenues £1.49m £0.84m Key points Successfully renegotiated banking facilities with The Royal Bank of Scotland plc(see separate announcement) Proposed placing to raise £3m Casino and poker continue to build customer base and profits Proposed move of Betdirect operations to Gibraltar to be completed by June 2007thereby making significant savings in betting and gaming taxes and levies Management team strengthened during the year through the appointment of FinanceDirector and Trading Director Key performance indicators Significant customer growth • Active Customers in 2006 84,595 (2005 : 17,587)• New Customers in 2006 42,866 (2005 : 14,451) Casino • Active casino players up 90% to 20,184 (2005 : 10,605)• New casino players up 103% to 16,663 (2005 : 8223)• Cost per Acquisition £135 (2005: £205) Poker • Active poker players up 161% to 18,272 (2005 : 6992)• New poker players up 142% to 15,088 (2005 : 6228)• Cost per Acquisition £20 (2005: £69) Betdirect • Active players 46,139• New Betdirect players 11,115 Current trading • Trading since the year end has been in line with management expectations Commenting on the results Ed Ware, Chief Executive Officer, said: "2006 has been a year of transition for the company: we have continued to growour casino and poker platforms and acquired a strategically important sportsbookoperation. Integration with our other businesses will be complete by June 2007delivering the planned benefits of significant cost savings and improving ourability to migrate players across platforms and games. "Trading this year has been as expected. We have renegotiated our bankingfacilities and seek to further strengthen our financial position through aplacing, creating a sound footing for the future." 13 March 2007 Enquiries: 32Red plc Tel: +350 49 396Ed Ware, CEOJon Hale, Finance Director College Hill Tel: 020 7457 2020Matthew SmallwoodJamie Ramsay 32Red Plc Chairman's Statement I am pleased to set out below my review of the Director's Report and FinancialStatements of 32Red Plc (the "Company") for the year ended 31 December 2006. Theresults include 29 weeks trading from Betdirect which was acquired from Sportechplc on the 7 June 2006. Financial review Net gaming wins for 32Red Plc, 32Red Ltd, Bet Direct Ltd and Bet Direct N.V.(the "Group") during the year ended 31 December 2006 increased by 48% to £14.44m(year ended 31 December 2005:£9.77m). 2006 gaming wins were driven by increasedcontributions from both the casino, up 5.5% on prior year and from poker, up77.2% on 2006. This is particularly pleasing given the adverse effects of thehot UK summer and the 2006 FIFA World Cup felt by the industry. Net gaming winsinclude a contribution of £3.53m Gross Win from Betdirect. Prior to acquisition, Betdirect has historically made a loss and has experienceddifficult trading conditions during the period of ownership ended 31 December2006. As reported across the sector there has been an abnormally high number ofwinning favourites in UK horseracing markets, which, allied with unfavourableChampions League football results in September, has severely impacted gross winmargins experienced by Betdirect. As a direct result of the performance of Betdirect, the Group made a loss of£3.7m for the year ended 31 December 2006 (2005: profit of £1.3m). The Boarddoes not recommend payment of a dividend in 2006 (2005: 3.08p per share). Acquisition of Betdirect Betdirect was acquired on 7 June 2006 for a total consideration of £12.5m (lesscustomer balances). Betdirect offers online, interactive TV, mobile andtelephone based sportsbetting as well as other remote gaming products. The Board has highlighted three areas, which, allied with a return to normalsporting results, are fundamental to moving the Betdirect business toprofitability:- 1. The completion of the relocation of operations from Liverpool to Gibraltar,thereby making significant savings in betting and gaming taxes and levies. 2. The implementation of operational improvements including the appointment of anew Trading Director, the launch of a new website with new and more in depthmarkets, the implementation of the new player tracking and risk assessmentsoftware and more efficient online-focused marketing campaigns. 3. The successful cross-selling between casino and poker and sportsbetting. Theupgraded Betdirect poker and casino products have already been launched and the32Red sportsbook will be launched in the first half of 2007. The completion of the Betdirect acquisition concludes the initial phase of ourmove into sportsbetting and provides our customers with a full suite of remotegambling products. Whilst much remains to be done to move the Betdirect businessinto profitability, we are pleased with the acquisition and are encouraged bythe opportunities presented by it. Financing restructure As a direct result of trading experienced at Betdirect the Company, as reportedin December 2006, breached a covenant with The Royal Bank of Scotland plc withwhom 32Red Plc has an outstanding loan of approximately £5.4m as at 31 December2006. The Company announces today that it intends to raise approximately £3m beforeexpenses from a Placing (see separate announcement). I am also pleased toannounce that the Company has entered into a revised loan facility with itsbankers for £3.5m. We are pleased to maintain a constructive relationship withThe Royal Bank of Scotland plc and believe that our revised gearing forms asound financial platform for the upcoming phase in the Company's development. Strategy The changes in US legislation support the Company's long term strategy not tomarket in the US and Betdirect's policy has always been rigorously to prohibitUS based customers. The business was, therefore, largely unaffected by thepassing of the Unlawful Internet Gambling Enforcement Act in the US duringOctober 2006. As previously stated, the Group's strategy is only to commit fundsto new markets once our research shows that such markets are viable. Board The Board has been strengthened by the appointment of three directors during theyear. Ed Andrewes was appointed on 23 February 2006 as Development Director,Martin Saunders was appointed as Trading Director on 21 October 2006 and JonHale was appointed as Finance Director on 1 December 2006. These three keyappointments further underline our belief that strong management will be centralto our future success. The Executive team now boasts approximately 80 yearsexperience in the betting and gaming industry. Bruno Callaghan will resign his post as non-executive director at the AGM and Iwould like to take this opportunity to thank Bruno for all his hard work sincethe Company was incorporated. The Board expects to appoint a replacement laterin the year. Outlook The focus for the forthcoming year will be on relocating the Betdirect operationto Gibraltar and moving that business into profitability. The Company willbenefit from all departments being based in one location engendering operationalsynergies and consistent delivery of our strategies. Trading in 2007 to date has been in line with management expectations despitethe high level of UK horse racing cancellations. I would like to take thisopportunity to thank all our employees for their continued hard work during 2006and I look forward to an exciting year in 2007. David Fish QCChairman, 32Red Plc 32Red Plc CEO's Statement 2006 has been very much a transitional year for the Company following theacquisition of Betdirect from Sportech plc in June. 2006 has also been aturbulent one for the industry as a whole and the Company faces two keychallenges in 2007:- 1. The Betdirect business has historically been loss making and is likely toremain so whilst it resides in the UK. I am delighted with the operationalimprovements made to date and I am confident that the Board has the necessaryexpertise to move the business to profitability during 2007. The acquisitionwill allow the business to offer the full suite of casino, poker and sportsbookproducts across two strong gaming brands. 2. While the changes in US legislation support the Company's long term strategynot to market in the US, the UK and European market is likely to become morecompetitive during 2007. The strength of the 32Red Casino is founded on a highlyprofessional customer service team and approach to marketing. I am thereforedelighted that the Company recently won the Casinomeister Best Casino of theYear award for the fourth consecutive year, and feel that the Company is wellpositioned to meet this challenge. Key Performance Indicators Total revenues increased by 48% to £14.44m, including a contribution of £3.96mfrom the Betdirect business acquired in June. Active customers in 2006 grew to84,595 (2005: 17,587) and new customers grew to 42,866 (2005: 14,451). Casino Total Casino revenues during 2006 increased by 5.5% to £9.42m (2005: £8.93m).This was not withstanding the undoubted distraction to our players during theFIFA World Cup Finals and the longest period of extended warm weather in UKhistory. In the circumstances and despite a good first half of the year, we arepleased to improve year-on-year Gross Win. The number of casino active players totalled 20,184, up 90% on 2005 with newcasino players totalling 16,663, which is an increase of 103% on the prior year.The large number of new players can in part be attributed to the launch of thenew Dash Casino product in September and the commencement of the Aston Villasponsorship in July. With such a large number of new players, it is unsurprisingthat casino player yield totalled £453, down 46% on 2005. Cost per Acquisition, which is inclusive of affiliate costs, but net of freebets reduced to £135 (if calculated excluding poker marketing costs) during theyear (2005: £205). The changes in US legislation in October did not directlyaffect the 32Red business, but the UK market will become more competitive andthe effectiveness of the Company's marketing will be closely monitored during2007. As an operator licensed and regulated by the Government of Gibraltar, we believethe Company to be well placed to continue to expand its profile in its mainmarket, the United Kingdom. 32Red plc is monitoring the developments in the UKwith respect to the Gambling Act 2005, which comes into force in September 2007. Poker Poker revenues during 2006 increased by 77% to £1.49m (2005:£0.86m) despite thereduced levels of activity experienced in June during the 2006 FIFA FootballWorld Cup finals. While the recovery in the latter half of the year isencouraging, significant growth opportunities for the product remain both in theUnited Kingdom and in Europe. The number of active poker players totalled 18,272, up 161% on 2005 with newpoker players totalling 15,088, which is an increase of 142% on the prior year.With new player recruitment levels reaching record levels during the year,player yields suffered and the Annual Player yield during the year was £73, down30% on prior year. Cost per Acquisition, which is inclusive of affiliate costs, but net of freebets decreased to £20 during 2006 (2005: £69). While the poker market is likelyto become more competitive during 2007, the Company believes that theacquisition of Betdirect in June 2006 will provide a fruitful player databasefor its poker product. The Company firmly believes that a sportsbook customerhas a high propensity to play poker and the cross-selling opportunity betweenpoker and sportsbetting will be key to the growth of Poker in 2007. Betdirect Betdirect generated Gross Win revenues of £3.53m since acquisition from 46,139active customers. Betdirect has attracted 11,115 new customers since acquisitionand the average customer yield was £77 per customer since acquisition. The Betdirect online gaming platform was successfully migrated to Gibraltar inSeptember 2006 and the telephone betting arm has been successfully trialed inGibraltar, but will remain in the UK for Cheltenham and Aintree. The Companyentered into a 3 month consultation process with the employees of Betdirect on10 November 2006 and, following the completion of the consultation process, theremaining business will be relocated to Gibraltar by June 2007. Software Partners 32Red is first and foremost a betting and gaming operator. We believe that themost effective solution for gaming software and a betting engine is throughpartnering with the respective leaders in these fields. Our longstandingrelationship with Microgaming for casino and poker software continues tostrengthen and we believe that Orbis provide the best sportsbetting platform. Edward WareCEO, 32Red Plc 32Red PlcConsolidated Income Statement for the year ended 31 December 2006 Notes 2006 2005 £ £ Net gaming wins 1+3 14,443,459 9,770,770Cost of sales (10,081,473) (6,280,899)Gross profit 4,361,986 3,489,871 Administrative expenses Other administrative expenses (7,741,255) (1,482,494) Provision for restructuring of Betdirect (305,094) - Share issue expenses - (718,414) (8,046,349) (2,200,908) Operating (loss)/profit 2 (3,684,363) 1,288,963Finance income 169,071 11,501Finance costs (229,463) -(Loss)/profit before taxation for the year (3,744,755) 1,300,464Tax on profit on ordinary activities 5 26,531 (225)(Loss)/profit for the year (3,718,224) 1,300,239 (Loss)/earnings per share (pence) Basic 4 (7.0) 2.8 Diluted 4 (7.0) 2.7 DividendsDividends paid in the year (pence per share) - 3.08Dividends paid in the year (£) - 1,460,100 32Red PlcConsolidated Balance Sheet as at 31st December 2006 Notes 2006 2005 £ £ AssetsNon-currentIntangible assets 6 12,636,495 168,165Property, plant and equipment 7 1,731,813 425,718 14,368,308 593,883 CurrentTrade and other receivables 861,407 297,283Cash and cash equivalents 4,945,626 1,471,027 5,807,033 1,768,310 Total assets 20,175,341 2,362,193 EquityEquity attributable to shareholders of 32Red PlcCalled up share capital 113,350 94,871Share premium 11,400,728 942,629Share option reserve 232,540 99,344Retained earnings (3,872,161) (158,614) Total equity 7,874,457 978,230 Current liabilitiesSocial security and other taxes 94,194 60,128Bank loan due within one year 5,416,667 -Trade and other payables 6,484,929 1,323,835Provisions for other liabilities and 305,094 -charges Total liabilities 12,300,884 1,383,963 Total equity and liabilities 20,175,341 2,362,193 32Red PlcConsolidated Statement of Cash Flows for the year ended 31 December 2006 2006 2005 £ £ Operating activities(Loss)/profit for the year before (3,657,832) 1,288,738interestAmortisation 857,606 35,559Depreciation 531,617 125,576Loss on disposal of fixed assets (13,516) -Change in trade and other receivables (27,152) (260,398)Change in trade and other payables 2,363,033 574,014Share options granted 137,873 93,122 191,629 1,856,611InvestingactivitiesAcquisition of subsidiaries (11,607,546) -Additions to other intangible assets (98,737) (44,149)Additions to tangible assets (883,276) (267,311)Disposal of tangible assets 39,676 -Interest received 169,071 11,501 (12,380,812) (299,959)FinancingactivitiesProceeds from share issue 11,297,262 302,500Share issue costs set against equity (820,684) (215,000)Proceeds from borrowings 6,500,000 -Repayment of borrowings (1,083,333) -Interest paid (229,463) -Dividends paid - (1,460,100) 15,663,782 (1,372,600) Cash and cash equivalents, beginning of period 1,471,027 1,286,975Net increase in cash and cash equivalents 3,474,599 184,052Cash and cash equivalents, end of period 4,945,626 1,471,027 32Red PlcConsolidated Statement of Changes in Equity for the year ended 31 December 2006 Equity attributable to equity holders of 32Red Plc Total Equity Share Share premium Share Retained capital options earnings reserve £ £ £ £ £ Balance at 1 January 2005 94,200 855,800 6,908 561 957,469 Shares issued 671 301,829 - - 302,500Share options granted - - 93,122 - 93,122Share options exercised - - (686) 686 -Profit for the period - - - 1,300,239 1,300,239Dividends - - - (1,460,100) (1,460,100)Share issue expenses - (215,000) - - (215,000) Balance 1 January 2006 94,871 942,629 99,344 (158,614) 978,230 Shares issued 18,479 11,278,783 - - 11,297,262Share options granted - - 137,873 - 137,873Share options exercised - - (4,677) 4,677 -Loss for the period - - - (3,718,224) (3,718,224)Share issue expenses - (820,684) - - (820,684) Balance 31 December 2006 113,350 11,400,728 232,540 (3,872,161) 7,874,457 Notes 1. Basis of preparation The financial statements have been prepared in accordance with InternationalFinancial Reporting Standards ('IFRS') as adopted by the European Union asissued by International Accounting Standards Board ( IASB). The accountingpolicies that have been applied in the opening balance sheet have also beenapplied through out all periods presented in these financial statements. Theseaccounting policies comply with each IFRS that is mandatory for accountingperiods ending on 31st December 2006. The financial statements have beenprepared under the historical cost convention and on a going concern basis,which is dependant upon the Company signing a revised bank facility with itsbankers, following a breach of covenant in 2006. The revised loan facility of£3.5m was signed on 9 March 2007 and is subject to the Company raising net fundsof at least £2.25m via a Placing. The directors have prepared revised forecasts incorporating these facilitieswhich indicate that the Group has sufficient resources to continue in operationfor the foreseeable future. The directors have reviewed the accounting policies used by the Group andconsider them to be the most appropriate. No changes have been made from theprior year. The following standards, issued by the IASB, have not been adopted by the Groupand the Group is currently assessing the impact these standards will have on thepresentation of the consolidated results in future periods: IFRS 7 - Financial Instruments: Disclosure (effective for accounting periodsbeginning on or after 1 January 2007) IFRS 7 introduces new disclosures to improve the information about financialinstruments. It requires the disclosure of qualitative and quantitativeinformation about exposure to risks arising from financial instruments,including specified minimum disclosures about credit risk, liquidity risk andmarket risk, including sensitivity to market risk. It replaces the disclosurerequirements in IAS 32 "Financial Instruments: Disclosure and Presentation". IFRS 8 - Operating segments (effective for accounting periods beginning on orafter 1 January 2009) IFRS 8 contains requirements for the disclosure of information about an entity'soperating segments and also about the entity's products and services, thegeographical areas in which it operates, and its major customers. The standardis concerned only with disclosure and replaces IAS 14 "Segment reporting". 2. Operating result 2006 2005 £ £This is stated after charging/(crediting) : Auditors remuneration - audit fees 50,000 30,000- taxation 12,500 -- due diligence 75,000 -- reporting accountant fees - 64,688Depreciation of owned property, plant and equipment 531,617 125,576Amortisation of other intangible fixed assets 857,606 35,559Share issue expenses - 718,414Operating lease rentals 219,716 25,244Foreign exchange losses/(gains) 57,252 (22,831) Amortisation and depreciation are charged to administrative expenses. Auditors remuneration in respect of IPO fees incurred during the period were £nil (2005: £129,376). Half of these costs have been charged to the incomestatement and half have been offset against equity 3. Segment information Business segment The Company has three business segments and performance can be analysed as follows: 2006 2005 £ £CasinoNet gaming wins 9,420,724 8,929,140 Segmental gross profit before marketing costs 4,978,701 5,139,083 PokerNet gaming wins 1,491,532 841,630 Segmental gross profit before marketing costs 739,782 469,077 Sports bookNet gaming wins 3,531,202 - Segmental gross profit before marketing costs 2,618,943 - ConsolidatedNet gaming wins 14,443,459 9,770,770 Gross profit before marketing costs 8,337,426 5,608,160 Marketing costs (3,975,440) (2,118,289)Administration expenses (8,046,349) (2,200,908) Operating (loss)/profit (3,684,363) 1,288,963 The Directors consider that is neither possible nor meaningful to distinguishaggregate marketing costs, administration expenses or other operating incomebetween the three business segments. Aggregate net assets are split between the three business segments as follows: 2006 2005 £ £ CasinoTrade and other receivables 137,656 276,537Cash and cash equivalents 4,414,859 1,342,252Trade and other payables (607,277) (833,435) 3,945,238 785,354PokerTrade and other receivables 3,139 20,746Cash and cash equivalents 31,991 128,775Trade and other payables (345,611) (490,400) (310,481) (340,879)Sports bookGoodwill, domain names and player database 12,167,673 -Trade and other receivables 757,085 -Cash and cash equivalents 498,776 -Trade and other payables (5,568,514) -Provisions (305,094) - 7,549,926 - Consolidated net assets 11,184,683 444,475Other non-current assets 2,200,637 593,883Social security and other taxes (94,194) (60,128)Bank loan (5,416,667) - 7,874,459 978,230 Non-current assets are used by all the business segments and an appropriatesplit is not available. Furthermore "other employee obligations" relate to allbusiness segments equally and can not be split in a meaningful way. Geographical segment The Company's performance can also be reviewed by considering the geographicalmarkets in which the Company operates 2006 2005 £ £Net gaming wins by geographical marketUK & Ireland 11,984,035 8,005,360Europe 1,187,678 646,298Rest of the World 1,271,746 1,119,112 14,443,459 9,770,770 Following the changes in US legislation, 32Red no longer accepts any bets fromthe United States with effect from 9am, Friday 13 October 2006. Betdirect, theCompany's UK focussed sports betting operation, has never accepted bets from theUSA. The Group uses the following procedures to block US bets: • the Group's payment processors are configured to block any purchases on debit/credit cards from the USA• registration of player accounts from the USA is disabled as an option from the Group's registration processes• software is in place to detect IP addresses not matching the player's country of registration• IP blocking software is used to identify IP addresses that are potentially from the USA 2006 2005 £ £Total assets by geographical locationUK (4,385,901) -Gibraltar 12,260,360 978,230 7,874,459 978,230 Non-current assets of £13,847,001 (2005: £nil) in the UK and £362,213 (2005:£311,460) in Gibraltar were acquired during the year 4. Earnings per share Basic earnings per share have been calculated by dividing the net resultsattributable to ordinary shareholders by the weighted average number of sharesin issue during the relevant financial periods. The weighted average number of shares used for basic earnings per share amountedto 53,077,615 shares (2005: 47,180,999). Diluted earnings per share is calculated by adjusting the weighted averagenumber of ordinary shares outstanding to assume conversion of all dilutivepotential ordinary shares. For share options, a calculation is done to determinethe number of shares that could have been acquired at fair value (determined asthe average annual market share price of the Company's shares) based on themonetary value of the subscription rights attached to the outstanding shareoptions. The number of shares calculated as above is compared with the number ofshares that would have been issued assuming the exercise of the share options. The effect of dilutive share options has been excluded from the dilutiveearnings per share calculation for 2006 as their inclusion would beanti-dilutive. 2006 2005 £ £ Net (loss)/profit attributable to (£3,718,224) 1,300,239ordinary shares Weighted average number of ordinaryshares: for basic earnings 53,077,615 47,180,999 for diluted earnings 55,060,615 48,681,381 Basic earnings per share (£0.070) 0.028 Diluted earnings per share (£0.070) 0.027 Weighted average number of ordinary shares for basic 53,077,615 47,180,999earningsWeighted average options 1,983,000 1,500,382Weighted average number of ordinary shares for diluted 55,060,615 48,681,381earnings 5. Taxation 2006 2005 £ £ Tax on profit on ordinary activities 450 225 The Company has been granted tax exempt status under the Companies (Taxation andConcessions) Ordinance. Under the terms of such status an annual charge of £450is payable to the Government. Provided the Company complies with the necessarycriteria, payment of such charges will satisfy the Company's tax obligation inGibraltar in relation to the year ended 31 December 2006. 2006 2005 £ £ (Loss)/profit before taxation (3,744,755) 1,300,464Add : UK tax losses not utilised 3,424,451 -Less : tax exempt profit (902,720) (1,300,464)Taxable profit (1,223,024) - Current tax charge - -Deferred Tax (26,981) -Tax exempt fee 450 225Tax charge (26,531) 225 The Group has UK tax losses of approximately £3.4 million (2005: £nil) availableto offset against future taxable profits in the UK 6. Intangible assets Goodwill Domain Names Website Software Total & Player Development License Database £ £ £ £ £CostAt 1 January 2005 - - 77,645 158,664 236,309Additions - - 30,177 13,972 44,149At 1 January 2006 - - 107,822 172,636 280,458 Additions - - 98,193 544 98,737Fair value of 4,737,673 8,200,000 - 289,526 13,227,199assets onacquisition ofBetdirectAt 31 December 4,737,673 8,200,000 206,015 462,706 13,606,3942006 AmortisationAt 1 January 2005 - - 36,787 39,947 76,734Provided during - - 18,363 17,196 35,559the yearAt 1 January 2006 - - 55,150 57,143 112,293 Provided during - 770,000 31,948 55,658 857,606the yearAt 31 December - 770,000 87,098 112,801 969,8992006 Net book valueAt 31 December 4,737,673 7,430,000 118,917 349,905 12,636,4952006At 31 December - - 52,672 115,493 168,1652005 Goodwill acquired has been allocated to the sports book business. The Grouptests goodwill for impairment annually or more frequently if there areindications that goodwill might be impaired. The recoverable amount isdetermined from value in use calculation. Management estimate by assumptions forthe value in use calculations and growth rates based on past experience andexpectation of future changes in the market. The discount rates are based onCompany specific weighted average cost of capital percentages. A period of fiveyears has been used for the value in use calculations. 7. Property, plant and equipment Motor Vehicles Computer and Leasehold Total Office Improvements Equipment £ £ £ £CostAt 1 January 2005 85,000 339,425 7,383 431,808Additions 25,000 228,883 13,428 267,311At 1 January 2006 110,000 568,308 20,811 699,119 Additions 47,795 835,481 - 883,276Acquisition of Bet Direct - 980,596 - 980,596Disposals (25,000) (14,676) - (39,676)At 31 December 2006 132,795 2,369,709 20,811 2,523,315 DepreciationAt 1 January 2005 7,677 138,671 1,477 147,825Charge for the year 22,010 99,444 4,122 125,576At 1 January 2006 29,687 238,115 5,599 273,401 Charge for the year 23,630 503,825 4,162 531,617On disposals (13,333) (183) - (13,516)At 31 December 2006 39,984 741,757 9,761 791,502 Net book valueAt 31 December 2006 92,811 1,627,952 11,050 1,731,813At 31 December 2005 80,313 330,193 15,212 425,718 8. Publication of Non-Statutory Accounts The financial information set out in this preliminary announcement does notconstitute statutory accounts as defined under Gibraltar company. The summarised balance sheet at 31 December 2006 and the summarised profit andloss account, summarised cash flow statement and associated notes for the yearthen ended have been extracted from the Group's 2006 statutory financialstatements upon which the auditors opinion is unqualified and unmodified. Those financial statements have not yet been delivered to the registrar ofcompanies. This information is provided by RNS The company news service from the London Stock Exchange