Sportingbet PLC
02 August 2005
Sportingbet Plc
('Sportingbet' or the 'Company')
Trading update
and
acquisition of the business of ISC Entertainment Inc
Sportingbet, one of the world's leading online betting and gaming groups, is
today providing a trading update for the year ended 31 July 2005. In addition,
the Board is pleased to announce the acquisition of the business of ISC
Entertainment Inc the owner of certain US-facing sports betting and gaming
marketing operations including mysportsbook.com, which is currently a white
label partner of Sportingbet.
Trading update
In the seasonally quiet final quarter of the year, Sportingbet has continued to
make good progress across all parts of its business. The board expects that
operating profit before goodwill amortisation for the year ended 31 July 2005
will be not less than £60.5 million.
In the final quarter of the year, organic growth in customer numbers has been
good, and this, combined with solid sports, casino and gaming margins, has
yielded profits ahead of management's expectations. Sportingbet's poker sites
continue to perform very well and early indications from the recently introduced
shared purse are encouraging.
Acquisition of the business of ISC Entertainment Inc
The Board of Sportingbet is pleased to announce that it has entered into an
agreement for the acquisition of the business of ISC Entertainment Inc ('ISC'),
the owner of certain US-facing sports betting and gaming marketing operations
including mysportsbook.com. ISC, based in Antigua, is currently a white label
partner of Sportingbet.
Initial consideration of US$33.0 million will be satisfied by a payment of
US$16.5 million in cash, from the Company's own cash resources, and the issue of
2,745,158 Sportingbet ordinary shares (the 'Consideration Shares', valued at
US$16.5 million at the average closing price of Sportingbet ordinary shares for
a 30 day period prior to this announcement). In addition to the initial
consideration, deferred cash consideration of approximately US$6.0 million will
become payable should the ISC business generate cumulative incremental profits
in excess of US$22.6 million in the three years post completion of the
acquisition.
ISC owns and provides marketing services for certain US-facing sports betting,
casino and gaming websites, including mysportsbook.com and worldwidegamble.com.
The risk management, customer services and back-office functions have been
carried out by Sportingbet under a white label agreement since 2002. ISC's
websites also provide poker functionality through a third party network
arrangement. Post acquisition, Sportingbet will use the newly acquired sites to
drive further traffic to its own poker brand, Paradise Poker, using its shared
purse technology.
ISC generated turnover, as extracted from management accounting information
maintained on the Sportingbet system, of approximately US$90 million in the
twelve months to 30 June 2005 and operating profit for the period of US$6.7
million, after the payment to Sportingbet of certain royalty payments.
Completion remains subject to admission to trading of the Consideration Shares
on AIM ('Admission') and certain tax clearances. Application has been made to
the London Stock Exchange for Admission. It is the Company's intention that this
will become effective and dealings will commence at 8.00 a.m. on 5 August 2005.
Under the terms of the Agreement, should the completion conditions not be
fulfilled by 8.15am on 17th August 2005, the acquisition will terminate. The
Consideration Shares are subject to lock-up arrangements for the 12 months post
completion and orderly market provisions for the six months thereafter.
Following the issue of the Consideration Shares, Sportingbet's issued share
capital will be 330,456,727 shares of 0.1p each and, on a fully-diluted basis,
440,284,491 shares of 0.1p each.
Sportingbet will announce its results for the year ended 31 July 2005 on 12
October 2005.
Commenting on today's announcement, Nigel Payne, Chief Executive of Sportingbet,
said:
'We are pleased that Sportingbet continues to perform strongly. The global
reach, the scalability of the business model and the diversified product
offering are all working to provide solid organic growth in our business.
ISC is a high quality business and the acquisition is a strong addition to our
existing US-facing brands. With almost no integration required and solid organic
growth prospects, we look forward to developing ISC's brands within our industry
leading portfolio.'
For further information please contact:
Sportingbet Plc
Andrew McIver, Finance Director Tel: 07919 485 407 or 020 7251 7260
Smithfield (media) Tel: 020 7903 0669
George Hudson
IR Focus (analysts/investors)
Neville Harris Tel: 020 7378 7033
This information is provided by RNS
The company news service from the London Stock Exchange
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