REG - GVC Holdings PLC - Interim Results and Q3 Trading Update <Origin Href="QuoteRef">GVC.L</Origin> - Part 2
29/10/2014 13:19
- Part 2: For the preceding part double click ID:nRSV1934Sa
2,935 14,491 5,510
15,995 28,298 18,808
9. TRADE AND OTHER PAYABLES
Sixmonthsended30 June2014 Sixmonthsended30 June2013 Yearended31 Dec2013
E000's E000's E000's
Other trade payables 10,581 9,511 9,586
Finance leases 945 - 945
Non-interest-bearing loan from William Hill PLC (see note 10) 2,735 - 2,514
Accruals 11,964 19,457 11,044
26,225 28,968 24,089
10. NON INTEREST-BEARING LOAN
As part of the Group's acquisition of Sportingbet PLC, a credit facility was
made available to the Group by William Hill PLC to fund working capital.
The principal amount, together with the prevailing exchange rate between the £
and the E and the resultant balance, expressed in E is shown below:
30 June2014 30 June2013 31 Dec2013
Principal amount in £ 6,862 6,862 6,862
Prevailing exchange rate 1.2477 1.1687 1.2031
Principal amount expressed in E 8,562 8,020 8,256
Repayment profile (base currency)
By 31 December 2014 2,287 2,287 2,287
By 31 December 2015 2,287 2,287 2,287
By 30 June 2016 2,288 2,288 2,288
6,862 6,862 6,862
IAS 39 Financial Instruments: Recognition and Measurement, states that all
loans and receivables should initially be measured at their fair value. The
loan has therefore been discounted at a rate of 4% and will be unwound over
the period of the loan.
The facility is repayable in three instalments and should GVC declare
dividends in excess of 58 Ecents per share, William Hill are entitled to
receive an accelerated repayment equal to the excess of the actual dividend
over 58 Ecents per share. The instalments as well as the impact of the
discount are shown below:
Amount in Euro's
Total Current liabilities Non-current liabilities
E000's E000's E000's
Loan balance on initial recognition 8,020
Revaluation at 30 June exchange rate 542
8,562
Discount on recognition of the loan (780) (424) (356)
Unwinding of discount at 30 June 2014 305 305 -
Loan balance at 30 June 2014 8,087 2,735 5,352
Future discount 475 119 356
8,562 2,854 5,708
11. SHARE CAPITAL
Number of shares
At 1 January 2014 60,906,760
Shares issued pursuant to the exercise of options by Directors (admitted to trading on 21 May 2014) 26,667
At 30 June 2014 60,933,427
Shares issued pursuant to the exercise of options by third parties** (admitted to trading on 1 July 2014) 343,053
At 1 July 2014 61,276,480
Share options currently in issue are:
Directors and Executives:
1,600,000* at £2.13
1,600,000* at £1.5479
3,100,000 at E0.01
6,300,000 61,276,480
Provided to third parties following underwriting commitments made at the time
of the acquisition:
156,947** at £2.335
* These share options attract a dividend credit payable by way of bonuses and
through the payroll.
**These share options have the exercise price reduced by the value of any
dividends declared up to the point of exercise.
12. ACQUISITIONS
12.1 TRADE INVESTMENT IN BETIT SECURITIES LIMITED
The Group announced on 14 May 2014 that it had paid E3.5 million for a 15%
stake in Betit Holdings Limited ("Betit").
The Group has a call option to acquire the balance of the outstanding shares.
The call option can be exercised no earlier than 1 July 2017 and no later than
30 September 2017, and would be subject to further LGA clearance and the AIM
Rules (principally the rules on a Reverse Takeover if applicable). The
minimum call option price is E70 million, and the actual price would be
determined by the mix of revenues between regulated and non-regulated markets
and certain multiples attaching thereto which at our current multiple levels
would lead to the transaction being accretive for shareholders.
If the Group decides not to exercise its call option then Betit may require
the Group to acquire its shares in Betit at a price determined by the mix of
revenues between regulated and non-regulated markets and certain multiples
thereof (but absent any floor on the price). Completion of this purchase
would be subject to certain conditions including the Group's ability to raise
the necessary financing. Should the Group fail to raise the required
financing, Betit Securities Limited may acquire the Group's shares in Betit
for nominal consideration.
The Group, as a 15% shareholder in Betit, does not have the power to govern
the financial and operating policies of the company. On this basis the Group
will not be consolidating the results of the company into the Group's
financial statements and has recognised the investment as a non-current asset
at cost. This in accordance with IFRS 10 (Consolidated Financial Statements).
A review of the accounting treatment of the investment will be carried out in
the full year accounts made up to the 31 December 2014.
12.2 Acquisition of Sportingbet plc
Sportingbet plc was acquired on 19 March 2013. During the period ended 30
June 2013, a total of E15,108k of costs were incurred, defrayed by E1,311k of
gain from the disposal (to William Hill plc) of the Sportingbet Spanish
business.
The acquisition balance sheet of Sportingbet plc, for IFRS accounting
purposes, included the contribution made from William Hill (£36.5 million @FX
rate of 1.1661). In more conventional terms the acquisition arrangements
looked like:
TotalE000's Other assetsE000's Cash & debtE000's
Current assets 43,929 21,700 22,229*
Current liabilities (93,537) (62,153) (31,384)
Net balance sheet deficit (49,608) (40,453) (9,155)
Contribution from William Hill 42,563 - 42,563*
(7,045) (40,453) 33,408
* reported in the acquisition balance sheet as a combined figure E66,834k as
subsequently restated to exclude the cash associated with the Spanish business
(E2,042k) and thus netting to E64,792k reported in the acquisition balance
sheet as "Bank borrowings and similar".
13. RESTATEMENTS
The Group has made three modest restatements to the 30 June 2013 interim
financial statement chiefly due to clarification of accounting treatments
associated with the acquisition of Sportingbet plc in March 2013.
13.1 Restatements in Statement of Consolidated Income
Six months ended 30 June 2013 Reference Original Restatements Restated
E000's E000's E000's
Revenue a 72,335 847 73,182
Cost of sales a (26,785) (847) (27,632)
Contribution 45,550 - 45,550
Other expenditure (29,745) - (29,745)
Exceptional items b (15,108) 1,311 (13,797)
Income from assets available for re-sale b 1,311 (1,311) -
Financial income c 5 780 785
Financial expense d (868) (66) (934)
Profit before tax 1,145 714 1,859
Taxation (316) - (316)
Profit after tax 829 714 1,543
Year ended 31 December 2013 Reference Original Restatements Restated
E000's E000's E000's
Revenue a 168,407 1,552 169,959
Cost of sales a (65,776) (1,552) (67,238)
Contribution 102,631 - 102,631
13.2 Restatements in Consolidated Balance Sheet
Reference Original Restatements Restated
E000's E000's E000's
Intangible assets e 146,968 4,906 151,874
Non-interest bearing loan c+d (8,020) 714 (7,306)
All other assets and liabilities (2,342) - (2,342)
136,606 5,620 142,226
13.3 Restatement to the Consolidated Statement of cashflows
Reference Original Restatements Restated
E000's E000's E000's
Cash paid to suppliers & employers (102,148) 2,042 (100,106)
Acquisition of Sportingbet b 66,834 (2,042) 64,792
All other cashflows 63,612 - 63,612
Cash and cash equivalent at end of period 28,298 - 28,298
a. Represents income from customers previously netted-off with cost of sales.
b. Represents a reclassification of the contribution from the Sportingbet Spanish business, which, at the time of the 2013 interim financial statements was an asset for resale, and was sold after the period end, thus disclosed within exceptional items. The cash movement is the cash acquired with the business.
c. Represents the imputed value of interest (under IAS 39) on the interest-free loan from William Hill plc
d. Represents the pro-rata release of the above interest.
e. Retranslation of shares using the price on the first day of post-acquisition trading as opposed to the price on the day on which the shares were suspended.[(£2.48-£2.335) x 29,018,075 x FX rate of 1.1661 = E4,906k]
14. SUBSEQUENT EVENTS
There have been no subsequent events between 30 June 2014 and the date of the
signing of these accounts that merit inclusion.
- Ends -
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