Worldlink Grp Regulatory News (WGP)

19 Jan 2006 07:01

World Gaming PLC19 January 2006 FOR IMMEDIATE RELEASE 19 JANUARY 2006 WORLD GAMING PLC (AIM) ('the Company') TRADING STATEMENT The Company is pleased to issue an update in respect of trading in the twelvemonths ended 31 December 2005 which included three months of trading from theSPORTSBETTING.COM group acquisition and an update on the consideration payablerelating to that acquisition. Subsequent to the Company's acquisition of the SPORTSBETTING.COM group effective1 October 2005, the business has maintained strong performance in respect ofcustomer sign-ups, deposits, customer activity levels and wagering volumes, allof which have exceeded management's expectations. Similarly, the Company's software licensing business has continued to experiencestrong growth in licensee wagering volume throughout the fourth quarter of2005. It has been widely publicised that sports betting win margins, particularly withrespect to American NFL results in the fourth quarter have been well belowindustry trends and well below margins that the SPORTSBETTING.COM group has experienced in comparative prior periods. As previously announced, the terms of the acquisition for the SPORTSBETTING.COMgroup provide that should Profit Before Tax ("PBT") of the SPORTSBETTING.COMgroup fall below $15.0 million for the twelve months ended 31 December 2005,then the total consideration shall be equal to the PBT multiplied by six times.It is expected that PBT for the SPORTSBETTING.Com group, calculated inaccordance with the terms of the acquisition agreement will be approximately $13.8 million. On this basis, consideration payable to the vendors of the SPORTSBETTING.COMgroup is expected to be reduced from the maximum consideration payable of $96.0million to approximately $82.8 million, a reduction of approximately $13.2m. Thereduction in consideration is therefore expected to be approximately $9.9million in cash and $3.3 million or approximately 1.5 million in shares. Allamounts shall be finalised on conclusion of an independent audit. This reduction in the number of shares to be issued to the vendors of theSPORTSBETTING.COM group means that earnings per share for the Company for 2006,based on current market expectations, would rise by approximately 3%. Management expects that operating profit before goodwill amortisation (EBITA)for the Company shall be approximately $6.5 million for the twelve months ended31 December 2005. Chief Executive Officer Daniel Moran commented: "We are delighted to bereporting on a highly successful year of change and rapid growth for WorldGaming. Our admission to AIM and acquisition of the SPORTSBETTING.COM group, ourlargest licensee, have put the Company in a very strong trading position. The Directors are pleased to report that the structure of the transaction forthe acquisition of the SPORTSBETTING.COM group has been highly effective inmaintaining and growing earnings for shareholders. While a short-termabnormality in American NFL trading margins has produced a lower thananticipated sports margin in the fourth quarter, the anticipated reduction inconsideration of over $13 million comfortably mitigates this issue. Strongunderlying performance indicators remain and the start of 2006 has seen areturn to historic margin levels. The Directors look to the future with confidence and a commitment to continueddevelopment of our business in coming years." --ENDS-- Enquiries: World Gaming plc Tel. +1 888 883 0833Daniel Moran, Chief Executive Daniel Stewart Securities Tel. 020 7776 6550Ruari McGirr Bishopsgate Communications Limited Tel: 020 7430 1600Maxine BarnesDominic Barretto The Ordinary Shares have not been and will not be registered under the U.S.Securities Act of 1933 (the "Securities Act") and may not be offered or sold inthe United States or to a U.S. person (as such term is defined in Regulations Sunder the Securities Act) absent registration or an applicable exemption fromregistration under the Securities Act. Notes to Editors World Gaming plc is a UK based holding company whose subsidiaries participate inInternet gaming software licensing and operations. The World Gaming Group is aninternational developer, licensor, and provider of online gaming products, including casino, sportsbook, and pari-mutuel betting. World Gaming's Ordinary Shares are traded on the London Stock Exchange,Alternative Investment Market ("AIM") under the symbol WGP and the Over TheCounter Bulletin Board market in the U.S. under symbol WGMGY. Further information on the Company can be found at:www.worldgaming.com This information is provided by RNS The company news service from the London Stock Exchange