The audited figures cover over 16 months from August 2004 to 31 December 2005 and include the post-acquisition results of VIP, Stanley Entertainment, Nine.com and English Harbour. L&G completed two share placings and raised £27.1m from a group of institutional investors to fund the acquisitions.
The company has also prepared pro forma figures to provide the performance of the group as if all acquisitions had been made at 1 January 2005. The combined businesses delivered a pretax profit of $7.1m from a total net win of $80.9m, up 32% on 2004.
Sportsbook (including racebook) net win was of $34.9m (up 23% on 2004) at a net margin of 6.2%. Customers placed 8.9 million sports bets in the year (up 11% on 2004), with an average bet size of $63 per bet which is consistent with the company\’s recreational customer base and focus.
The successful launch of a Real Time Gaming casino product at VIP sites in the second half of 2005 led to a strong uplift in revenues, with a casino net win of $44.9m (up 37% on 2004), corresponding to a net margin percentage of 3.1%.
New customer sign-ups increased by 21% on 2004, while the total number of active customers in the year was up 13% on 2004. Cost of acquisition per new customer for 2005 was $203 and pro forma net win per customer in 2005 was $974. Strong customer retention and loyalty led to an average player lifetime of 18 months in the VIP business, significantly higher than the industry average.
L&G expects to relaunch the VIP website in June 2006 under the premium domain name VIP.com. The domain, acquired in 2005, offers the opportunity to leverage the group distinct brands under one umbrella providing customers with a \’one stop shop\’.
To date, trading in 2006 has been very encouraging, with total net win to 20 March 2006 up by 28% compared to last year. The company continues to actively review a number of potential acquisition opportunities in line with the group\’s strategy of acquire US facing sportsbooks and casinos or to enter new geographic markets and add scale to the existing operation.
“With the acquisition of VIP, L&G has established an excellent foundation for its buy and build strategy, and with the subsequent acquisitions of Stanley Entertainment, Nine.com and English Harbour, L&G has developed a strong base from which to drive earnings and further consolidate the online leisure and gaming industry,” said Philip Parker, Chairman of Leisure & Gaming.
“Early trading in 2006 shows group net win ahead of last year by 28%, with active customers up by 16% and new customer sign-ups are up by 7%. We are pleased with the progress on our key integration and business consolidation objectives – further supporting our confidence in the outlook for the Group.”
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