Embargoed until 0700                                                                                                     9 February 2010

 

Alphameric plc

("Alphameric" or the "Group")

Preliminary Results for the year ended 30 November 2009

 

Alphameric is a leading provider of end to end technology solutions to the gaming market in the UK and the Republic of Ireland comprising Electronic Point of Sale (EPoS) systems, display systems and a range of other value added business focussed solutions.

 

Alphameric is a 50% shareholder in AMRAC, its joint venture with Racecourse Media Services Limited ('RMS') (which is in turn owned by a number of the UK's foremost racecourses and Racecourse Investments Limited), which holds exclusive licences with 31 racecourses to broadcast pictures, audio and data from these courses to licensed betting offices within the UK and the Republic of Ireland on its television channel, TurfTV.

 

Highlights

·      Successful year for the Group

 

Results

·      Significantly improved financial performance, with pre-tax profits of £7.9 million (2008: pre-tax loss of £2.2 million) on revenues of £40.0 million (2008: £35.9 million)

 

·      The Group's balance sheet is strong, with cash at the year-end of £20.8 million (2008: cash net of debt £17.8 million). The Group has no bank debt.

 

Operations

·      AMRAC

-       Alphameric's share of AMRAC's revenues grew to £26.1 million (2008: £20.6 million) and its share of profits grew to £7.1 million (after management charges) (2008: £3.4 million before exceptional administrative charges but after management charges)

-       Subscriber base grew to more than 10,000 licensed betting offices

-       Successful closure of long-running legal dispute 

-       Since the year end AMRAC has secured the extension until 2018 of its exclusive media rights with 30 of the UK's  most prestigious racecourses 

 

·      Alphameric Solutions

-       returned to profitable trading for the year, with an operating profit of £0.6 million (2008: operating loss of £0.5 million before exceptional administrative expenses) on turnover of £13.9 million (2008: £15.3 million)

-       towards the end of the year Alphameric Solutions was awarded a major new contract for the supply of EPOS and ALBOS systems to the Tote

 

Recommencement of payment of dividend to shareholders

·      The payment of dividends to shareholders recommenced during the year and it is the Board's intention to pursue a progressive dividend policy, returning a significant proportion of net profits to shareholders each year. The final dividend for the year of 0.95 pence (2008: nil) making the total dividend for the year 1.70p (2008: nil). 

 

Board Change

·      Alan Morcombe, Chief Executive of the Group since 1995 and Executive Chairman of TurfTV since 2007, is to stand down on 28 February 2010. The Board thanks Alan for all his endeavours over the years.

 

Peter Bertram, Chairman, commented:

"AMRAC now has over 10,000 licensed betting office subscribers for its TurfTV service, which represents the vast majority of the available marketplace. It has delivered a good trading performance for the year and has commenced the payment of dividends to its joint shareholders, Alphameric and Racecourse Media Services. The extension of its exclusive media rights with 30 of the UK's most prestigious UK horse racecourses underpins the business for the foreseeable future.

 

"Alphameric Solutions is now trading profitably, has refreshed much of its product offering and secured a major contract for roll out during 2010.

 

"The Group has a strong balance sheet, significant cash balances and has re-introduced a progressive dividend policy.

 

"I believe that the Group is now well positioned to generate enhanced levels of return for its shareholders whilst delivering growth in its core businesses.

 

"Alan Morcombe has been instrumental in setting up TurfTV and negotiating its media rights contracts and is leaving the business in good shape for the next stage of its development. The Board thanks Alan for all his endeavours over the years."

 

Alan Morcombe, Chief Executive, who leaves the Group on 28 February 2010, commented:

"I have enjoyed my time at Alphameric and leave the business in excellent shape. The last three years have been noteworthy with the emergence of TurfTV establishing a significant new profit stream for the group. The Alphameric team is a good one and I wish the Company every success."

 

- Ends -

 

For further information, please contact:

 

Alphameric plc
Peter Bertram, Chairman Mike McLaren, Finance Director	Today: 020 7067 0700 Thereafter: 01483 293971
Weber Shandwick Financial
Nick Oborne / Clare Thomas	020 7067 0700

 

Notes to Editors

 

Alphameric plc and its subsidiaries (together 'Alphameric' or 'the Group') and Amalgamated Racing Limited ('AMRAC').

 

Alphameric is a leading provider of end to end technology solutions to the gaming market in the UK and the Republic of Ireland comprising Electronic Point of Sale (EPoS) systems, display systems and a range of other value added business focused solutions.

 

Alphameric is also a 50% shareholder in AMRAC, the joint venture company between Alphameric and Racecourse Media Services Limited (which is in turn owned by a number of the UK's foremost racecourses and Racecourse Investments Limited), which holds exclusive licences with 31 racecourses to broadcast pictures, audio and data from these courses to licenced betting offices within the UK and Republic of Ireland on its television channel, TurfTV.

 

ALPHAMERIC PLC

CHAIRMAN'S STATEMENT

YEAR TO 30 NOVEMBER 2009

 

Background to Alphameric plc

 

Alphameric plc and its subsidiaries (together 'the Group' or 'Alphameric') and Amalgamated Racing Limited ('AMRAC')

 

Alphameric is a leading provider of end to end technology solutions to the gaming market in the UK and the Republic of Ireland comprising Electronic Point of Sale (EPoS) systems, display systems and a range of other value added business focussed solutions.

 

Alphameric is a 50% shareholder in AMRAC, its joint venture with Racecourse Media Services Limited ('RMS') (which is in turn owned by a number of the UK's foremost racecourses and Racecourse Investments Limited), which holds exclusive licences with 31 racecourses to broadcast pictures, audio and data from these courses to licensed betting offices within the UK and the Republic of Ireland on its television channel, TurfTV.

 

Introduction

 

The financial year to 30 November 2009 was a successful year for the Group which saw the achievement of a number of key objectives, including:

 

·      Significantly enhanced profits from AMRAC and the successful closure of its long running litigation;

 

·      The return to profitable trading for the Alphameric Solutions business;

 

·      The securing by Alphameric Solutions of a major new contract for the supply of EPoS and ALBOS systems to Tote Bookmakers; and

 

·      The recommencement of the payment of dividends to shareholders.

 

Since the year end AMRAC has also secured the extension until 2018 of its exclusive media rights with 30 of the UK's most prestigious racecourses.

 

We look forward to working hard to continue the Group's success and to deliver acceptable levels of return for our shareholders going forward.

 

Results

 

-     Consolidated Income Statement

 

Revenues for the year to 30 November 2009 increased to £40.0 million (2008: £35.9 million) which generated an improved operating profit of £7.7 million (2008:  operating profit before exceptional administrative expenses and share based payment charges £2.9 million).

 

The Group returned a pre-tax profit of £7.9 million, compared to a loss before tax of £2.2 million last year.

 

The basic earnings per share were 3.0 pence (2008: 0.8 pence before exceptional administrative expenses).

 

In accordance with IAS 31; 'Interests in Joint Ventures' Alphameric's consolidated results include 50% of AMRAC's revenues, costs and balance sheet headings.

 

-     Consolidated Balance Sheet

 

The Group's consolidated balance sheet remains robust with net assets at 30 November 2009 of £30.3 million including £20.8 million in cash  (30 November 2008: net assets of £25.4 million including cash balances net of debt of £17.8 million).

 

In December 2008 the Group repaid all of its outstanding bank debt.

 

In January 2009 a term loan from Alphameric of £3 million (plus interest) was repaid in full by AMRAC.

 

AMRAC's customer supply contracts typically run annually from 1 January with a number of its larger customers paying in advance for the service.  Consequently, the Group consolidated cash balances are usually higher in the earlier months of the financial year.

 

In December 2009 AMRAC entered into a series of contracts which extended its exclusive media rights with 30 racecourses until 2018; certain of these contracts required in advance payments to be made by AMRAC which have reduced its cash balances since the financial year end.

 

Review of Operations

 

-     Alphameric Solutions (ASL)

 

ASL is focused on the provision of end to end technology to high street bookmakers, predominantly in the UK and the Republic of Ireland.

 

Having repositioned ASL over the past couple of years and lowered its overhead base, it is pleasing to note that ASL traded profitably for the year as a whole, marginally exceeding our own financial expectations. Towards the end of the financial year, we were pleased to announce that ASL had secured a major new contract to roll out its latest EPoS and display systems to Tote Bookmakers; the majority of the roll out will fall in the 2010 financial year.

 

ASL's revenues for the year were £13.9 million which produced an operating profit of £0.6 million (2008: revenues of £15.3 million; operating loss £0.5 million before exceptional administrative expenses).

 

-     AMRAC

 

Through its television channel, TurfTV, AMRAC provides betting opportunities for bookmakers in the UK and the Republic of Ireland, predominantly focused on the best UK horse racing.  The TurfTV television channel consists of pictures and associated real time race day data from 31 of the UK's horse racecourses, together with international horse racing and a range of virtual horse and dog race meetings.  TurfTV is a closed user group service, delivered by satellite, to customers who pay in advance for the service.

 

During the year AMRAC's subscriber base rose to more than 10,000 licensed betting offices following the signing of BetFred as a long term customer in April 2009 and a number of independent bookmakers throughout the year.

 

In December 2009 AMRAC announced that it had signed exclusive agreements with 30 of its current 31 racecourses which extended its media rights relating to those racecourses by a further 5 years from 2013 to 2018.  Under the terms of these contracts, which reflect the increasingly competitive market and pricing for racecourse media rights, £6.0 million of the race fees due for the 5 year period have been paid in advance by AMRAC.  In addition, AMRAC has entered into new 3 year sponsorship agreements, with effect from 1 December 2009, with certain of the racecourses to reflect the long-term partnership arrangements in existence; the total cost to AMRAC of these sponsorship agreements is £4.6 million.

 

During the year a long running legal dispute between Alphameric, AMRAC and a large number of racecourses and William Hill, Ladbrokes and the Bookmakers Afternoon Greyhound Service Limited  (BAGS) was finally settled following determination by the Court of Appeal in favour of Alphameric, AMRAC and the racecourses.  On 9 November 2009 the Supreme Court refused to grant the claimants leave to appeal the Court of Appeal's decision.  The majority of costs payable and receivable in relation to the dispute have been settled and accounted for as at 30 November 2009.

 

Alphameric's share of AMRAC's revenues for the year grew to £26.1 million which produced an increased operating profit share of £7.1 million after management charges (2008: revenue £20.6 million and operating profit £3.4 million before exceptional administrative charges).

 

Dividends

 

At a general meeting of the Company on 20 April  2009, shareholders approved a capital reorganisation which eliminated the deficit on the Company's profit and loss account.  Subsequently the realisation by the Company of an element of its merger relief reserve and the resulting transfer to retained reserves placed the Company in a position to re-introduce the payment of dividends.   An interim dividend for the year to 30 November 2009 of 0.75 pence per share was paid on 30 September 2009.

 

Going forward, subject to the Group's cash requirements, financial conditions and the availability of sufficient distributable reserves, and in the absence of alternative mechanisms, it is now your Board's intention that the Company pursues a progressive dividend policy that returns a significant proportion of net profits to shareholders each year. 

 

The Directors are recommending a final dividend for the year to 30 November 2009 of 0.95 pence per share (2008: nil), payable on 31 March 2010 to shareholders on the register on 12 March 2010.  This would bring the total dividends for the 2009 financial year to 1.70 pence per share (2008: nil).

 

Board Change

 

The group announces that Alan Morcombe, Chief Executive of the Group since 1995 and Executive Chairman of Turf TV since 2007, is to stand down on 28 February 2010. Alan has been instrumental in setting up Turf TV and negotiating its media rights contracts and is leaving the business in good shape for the next stage of its development. The Board thanks Alan for all his endeavours over the years.

 

Mike McLaren, Chief Operating Officer and Group Finance Director and James Soulsby, Commercial Director, will report directly to Peter Bertram, Chairman. The Board is seeking to appoint an additional independent non-executive director, and the search for a suitable candidate is underway.

 

Mike McLaren will replace Alan Morcombe as one of the two Alphameric representatives on the TurfTV Board. The senior management of TurfTV has recently been strengthened by the appointments of a Managing Director and Finance Director.

 

Outlook

 

AMRAC now has over 10,000 licensed betting office subscribers for its TurfTV service, which represents the vast majority of the available marketplace. It has delivered a good trading performance for the year and has commenced the payment of dividends to its joint shareholders, Alphameric and Racecourse Media Services. The extension of its exclusive media rights with 30 of the UK's most prestigious UK horse racecourses underpins the business for the foreseeable future.

 

Alphameric Solutions is now trading profitably, has refreshed much of its product offering and secured a major contract for roll out during 2010.

 

The Group has a strong balance sheet, significant cash balances and has re-introduced a progressive dividend policy.

 

I believe that the Group is now well positioned to generate enhanced levels of return for its shareholders whilst delivering growth in its core businesses.

 

Forward Looking Statements

 

This document includes forward looking statements concerning both the Group and AMRAC.  Whilst these forward looking statements are made in good faith they are based upon the information available as at the date of this document and upon current expectations, projections and assumptions about future events.  These forward looking statements are subject to risks, uncertainties and assumptions about the Group and AMRAC and should be treated with an appropriate degree of caution.

 

Peter Bertram

Chairman

9 February 2010.

ALPHAMERIC PLC

CONSOLIDATED INCOME STATEMENT

YEAR ENDED 30 NOVEMBER 2009

 

	Note	2009		2008
		£'000		£'000
Revenue		39,986		35,915
Operating costs		(32,273)		(33,010)
Operating profit before exceptional administrative expenses and share-based payment charge		7,713		2,905
Exceptional administrative expenses	3	-		(5,314)
Share-based payment charge		-		(180)
Operating  profit/( loss)		7,713		(2,589)
Finance income		216		748
Finance costs		(24)		(343)
Profit/(loss) on ordinary activities before taxation		7,905		(2,184)
Income tax (charge)/credit	5	(1,130)		57
Profit/(loss)  for the financial year from continuing operations		6,775		(2,127)
Loss for the financial year from discontinued operations	4	-		(24,962)
Profit/(loss) for the financial year attributable to equity holders of the parent		6,775		(27,089)

 

Basic and diluted earnings/(loss) per share	6	2009	2008
		pence	pence
Basic and diluted earnings per share for the year from continuing operations before exceptional administrative expenses and share-based payment charge		3.0	0.8
Exceptional administrative expenses and share-based payment charge per share		-	(1.8)
Basic and diluted earnings/(loss) per share - from continuing operations		3.0	(1.0)
Basic and diluted earnings/(loss) per share - discontinued operations		-	(11.4)
Total basic and diluted earnings/(loss) per share		3.0	(12.4)