Audited results for the year ending 31 July 2006 were published today by Sportingbet Plc. Apart from financial and business highlights the company listed post balance sheet events, including the disposal of US-facing sports and casino operations for US$1. According to the company, this move discharged excess liabilities of approximately US$13.2 million and saved potential severance and closure costs of approximately US$14 million. US-facing poker operations have been closed and Paradise Poker continues to focus on other markets.

As of 13 October 2006, cash on balance sheet net of client liabilities stood at £35.2 million (US$65.8 million) and all bank debt repaid. Sportingbet financial highlights show operating profit up 70.2% for the year to £103 million (US$192.5 million). Gross margin was up 72.5% to £303.3 million (US$566.8 million). Business highlights include new real money sign-ups up 34.2% and the number of sports and gaming bets up 41.8% on the previous year. The average daily rake for Paradise Poker was up 81.1% to US$513,995.

Nigel Payne moves from being Sportingbet’s Group Chief Executive but remains an Executive Director. Group Finance Director Andrew McIver is the new Group Chief Director. Nigel Paynesaid: “The past financial year, and my last as Group Chief Executive, has demonstrated the potential of the internet gaming industry and the strength of Sportingbet’s operations to deliver a wide range of gaming products in a safe, secure and entertaining environment. Sportingbet delivered record profits as we achieved significant organic growth from our key products and markets.

He added, “The Board has continued to lobby for the adoption of consistent and transparent policies promoting the benefit of proper regulation. However this year has seen a fragmentation of the Group’s efforts, with many governments compromising this policy for various motives, be they fiscal protectionism or political gain. As we move into a new financial year, there is still little sign that governments are ready to embrace the Board’s belief in the harmonisation of internet trading across geographic borders. Important international entities such as the European Union and the World Trade Organisation are seemingly unable, at this time, to provide much needed clarity. “

Andrew McIver, incoming Group Chief Executive, commented, “My first review as Group Chief Executive comes at a very disappointing time. The Board and I are particularly dismayed by the regulatory developments in the US over recent months. “ He went on to say, “The post year end sale of the US-facing sports and casino business and closure of the US-facing poker operations will result in significant exceptional costs in the new financial year. These will include an impairment of the goodwill relating to the investments in the US-facing sports and casino operations and Paradise Poker together with a restructuring of overheads, the cost of which is expected to be in the region of £10m. Following this restructuring, the remaining three income streams will be more profitable and will be supported by a much leaner cost structure. “ (E-10.19.06)

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