12/20/11 : GALA CORAL LANGUISHES IN Q4
Remote gambling interests underperform, but a change of platform is in sight
Gala Coral, a major land and online gambling group in the UK has released mediocre results for the fourth quarter of its financial year, with turnover declining three percent year-on-year to GBP 249 million excluding the accounting effects associated with the removal of prize bingo.
Pre-exceptional earnings before interest, tax, depreciation and amortisation for the three-month period decreased GBP 14.7 million from twelve months ago to GBP 55 million, with management attributing the decline to poor sportsbetting results and increased costs including value-added tax (VAT).
For the twelve months to the end of September 2011, the betting group noted that turnover had fallen by two-percent year-on-year to GBP 1.117 billion excluding the 2010 World Cup and the accounting effects associated with the removal of prize bingo, while pre-exceptional earnings before interest, tax, depreciation and amortisation slumped 8 percent on an underlying basis to GBP 261 million.
The company advised that it had cashflow of GBP 230.1 million for the twelve months to the end of September with an 88 percent cash conversion rate partnered with cash outflow of GBP 118.7 million, which included a net repayment of GBP 190.1 million in senior debt and refinancing costs of GBP 41 million.
This resulted in a finish to the year which saw the company carrying a net debt of GBP 1.323 billion.
“The main drivers of the underlying earnings before interest, tax, depreciation and amortisation reduction were poor over-the-counter performance and increased costs in Coral and a decline in remote [gambling],” read a statement from Gala Coral.
“The second half of the year saw a return to growth in over-the-counter stakes although margins have remained below the long-term average. Cost increases in the Coral business were primarily driven by estate growth and property and content costs.
“Remote [gambling] remains limited by uncompetitive technology although trends in active customers were materially improved in the second half.
"The project to re-platform all websites onto Playtech software is well progressed with a re-launch of the new sites planned for spring and summer of 2012.”