3 March 2016

 

Sportech PLC ("Sportech" or the "Group")

Preliminary results for the twelve months ended 31 December 2015

 

Sportech, one of the world's leading pool betting operators and technology suppliers, focused on highly regulated markets worldwide, is pleased to announce its preliminary results for the twelve months ended 31 December 2015.

 

Group Highlights

 

·      Results in line with expectations with EBITDA of £23.1m (2014: £24.0m)

·      Balance sheet strengthened with net debt down by 10%

·      Investment in technology delivering new international customers

·      Expansion into providing lottery products for professional sports teams

·      Football Pools division nearing completion of modernisation programme

·      Expansion of venues strategy into California

·      Disposal of online interests in New Jersey for a pre-tax gain of £8.1m

·      £97m VAT refund appeal to be held in Court of Appeal on 7/8 April

 

Ian Penrose, Chief Executive of Sportech PLC, said:

 

"The Group has reached an important stage in its development, as our US business makes continued progress on many fronts, and our UK Football Pools business arrives at the inflection point of expected stability after years of modernisation. Overall, the Board is pleased with the strategic position that each of its divisions has secured, but recognises that each division will also require further investment, ahead of anticipated revenue and profit benefits, to better enable them to deliver their full potential.

 

We have invested substantial time into developing our activities and licensing position in the US. During the year, we sold our iGaming interest in New Jersey, realising a threefold return on our investment after only three months of operation.

 

We continue to evaluate opportunities to deliver the full potential of our divisions whilst ensuring we maintain prudent financial ratios. In this regard, over the past twelve months we have considered approaches for the Group as well as for The Football Pools. Despite this, we have remained focused on our operations and we will continue to investigate any proposals that recognise the value of the inherent potential of these businesses. We look forward to moving into a year of growth in 2016."

 

Financial and operational highlights

 

	Reported 2015 FY £m	Reported 2014 FY £m	Change %
Revenue	100.2	104.1	-4%
EBITDA1	23.1	24.0	-4%
Adjusted profit before tax	11.8	14.4	-18%
Adjusted2 earnings per share (basic) Statutory profit/(loss) before tax	4.4p 9.7	5.5p (20.0)	-20% 149%
Net debt	(57.7)	(63.8)	10%

 

·      EBITDA at £23.1m (2014: £24.0m), in line with expectations.

·      The Group's balance sheet strengthened with net debt reducing by 10% (£6.1m) to £57.7m.

·      Statutory profit before tax increased to £9.7m (2014: loss of £20.0m, primarily due to non-cash impairment of the Football Pools goodwill).

·      On a constant currency basis, revenue declined by 6% and EBITDA declined by 5%. 2014 revenue and EBITDA were £106.4m and £24.3m respectively at constant currency.

 

Sportech Racing and Digital

 

·      EBITDA growth of £0.5m to £8.6m (2014: £8.1m).

·      Continued investment in technology attracting new international customers and successful installation of new hardware and software for Betfred (Totepool).

·      Opening of office in Asia delivering benefits with new contracts.

 

Sportech Venues

·      EBITDA of £2.8m (2014: £3.2m), affected by the previously highlighted severe winter weather in Connecticut and year-long closure for refurbishment of a key Jai-Alai venue.

·      Officially opened on 28 January 2016 the only sports bar, restaurant and betting venue in San Diego.

·      Discussions continue regarding expanded gaming (slots) in Connecticut.

Football Pools

 

·      EBITDA of £15.2m (2014: £16.6m) in line with expectations.

·      Ongoing improvements in technology platforms and processes.

·      The division is now set for stability and growth.

  

⁽¹⁾    EBITDA is stated before exceptional costs, impairment of assets and share option expense.

⁽²⁾    Adjusted profit figures are stated before amortisation of acquired intangibles, impairment of assets, exceptional items, share of loss after tax and impairment of joint ventures and associates, and other finance income.

 

For further information, please contact:

 

Sportech PLC                                                                                Tel: +44 (0)20 7268 2400

Ian Penrose, Chief Executive

Mickey Kalifa, Chief Financial Officer

 

Brunswick Group LLP                                                                    Tel: +44 (0)20 7404 5959

Mike Smith, Stuart Donnelly

 

Investec Bank PLC                                                                         Tel: +44 (0)20 7597 4000

Patrick Robb, Henry Reast

 

Peel Hunt LLP                                                                               Tel: +44 (0)20 7418 8900

Dan Webster, Adrian Trimmings

 

Forward-looking statements

 

Certain statements in this Preliminary Statement are forward-looking. Although the Group believes that the expectations reflected in this forward-looking statement are reasonable, it can give no assurance that these expectations will prove to be correct. As these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

 

 

Sportech PLC ("Sportech" or the "Group")

Preliminary results for the twelve months ended 31 December 2015

 

Group Overview 

 

Sportech is one of the world's leading pool betting operators and technology suppliers, focused on highly regulated markets worldwide.

 

The Group comprises three divisions: Racing and Digital, Venues and The Football Pools. Both the Racing and Digital (which processes $13 billion bets annually) and Venues (which operates legal betting exclusively and in perpetuity in Connecticut in venues, online and mobile on horseracing and greyhounds) divisions are based in the US and Canada where we employ 630 people across field operations and four corporate offices. We are licensed by gaming regulators in 28 US States. The Football Pools is based in the UK, and is the oldest football gaming business in the world.

 

Group Financial Overview

 

	Revenue		EBITDA
£m	2015 FY	2014 FY	2015 FY	2014 FY
Sportech Racing and Digital	34.6	35.2	8.6	8.2
Sportech Venues	32.7	34.2	2.8	3.4
Football Pools	33.8	38.0	15.2	16.6
FX effect	-	(2.3)	-	(0.3)
Trading divisions	101.1	105.1	26.6	27.9
Inter-segment elimination and corporate costs	(0.9)	(1.0)	(3.5)	(3.9)
Total Group	100.2	104.1	23.1	24.0

 

Group revenue was £100.2m (2014: £104.1m and £106.4m at constant currency) with the £3.9m reduction due primarily to the expected fall in revenues from the Football Pools collector channel. EBITDA reduced by 4% to £23.1m (2014: £24.0m and £24.3m at constant currency). Adjusted profit before tax was £11.8m (2014: £14.4m), the EBITDA shortfall and increased depreciation and interest costs being offset by a lower share based payment charge. Profit before tax was £9.7m (2014: loss £20.0m) with basic earnings per share of 3.3p (2014: loss of 10.4p) and adjusted earnings per share of 4.4p (2014: 5.5p). The Group's balance sheet has been strengthened, with net debt reducing by 10% (£6.1m) to £57.7m.

 

Sportech Racing and Digital

 

(i)   Sportech Racing and Digital: Business Review

Sportech entered the market in the US five years ago, and has substantially developed its technology, gaming products and licensing position over that time.

 

In 2015, we have seen the benefits of our significant investment in improving our systems with the deployment of new hardware and software to Betfred's Totepool business in the UK, (our largest, single customer contract to date). Furthermore, we have secured several other new customer contracts in the US, and two new contracts in Asia (Malaysia and Vietnam), following the opening of our office in Singapore. However, we lost our contract with racing in California to an industry competitor with extensive interests in racehorse, racetrack, media and online betting in the State.

 

Bump 50:50 provides in-stadia electronic lotteries to professional sports teams. Since acquiring the business in late 2014, we have grown the seven contracts the business had at that time to 21, with new customers including teams from the NHL, NBA, NFL, Nascar, MLS and the Canadian F1 Grand Prix. 2016 has already seen the launch of the first 50/50 lottery in the State of Texas and the launch of the first ever online raffles, providing fans of the Colorado Avalanche, Denver Nuggets, Colorado Mammoth and Colorado Rapids, the chance to play on PC, tablet and mobile, as well as in-stadia. Under Sportech's ownership, Bump 50:50 is forecast to make profits for the first time in 2016. The acquisition ensures the name and responsible betting reputation of Sportech is known in the North American professional sports market ahead of any regulation to enable sports betting.

 

We were pleased to demonstrate the value of our licensed position when we sold our iGaming interests in New Jersey only three months into its operation. The sale generated a net profit on disposal before tax of £8.1m and consideration of £10.9m, including 2.2m shares in the Canadian-listed NYX Gaming Group ("NYX") and £1.1m in contingent consideration (which, due to the expected introduction of iGaming in North America later this decade, we expect to receive). The Group continues to hold a 4% stake in NYX (whose shares traded at CAD $2.72 each at 31 December) as a result of this transaction.

 

The Group's existing Indian joint venture with Playwin, India's largest lottery provider, has agreed to supply technology and services to an Indian company which has been engaged by a Sikkim licence holder to support the operation of pool games. These operations commenced in February 2016.

 

To further develop our US positioning, in September we entered the daily fantasy sports market through the acquisition (for zero cash consideration and for effecting a number of customer introductions) of a 39.2% stake in DraftDay Gaming Group, whose largest shareholder is the NASDAQ listed DraftDay Fantasy Sports Inc.

 

(ii)   Sportech Racing and Digital: Financial Review

 

	Revenue		EBITDA
£m	2015 FY	2014 FY	2015 FY	2014 FY
Tote services and equipment sales	32.1	31.2	8.0	7.0
Digital	2.5	4.0	0.6	1.2
FX effect	-	(0.7)	-	(0.1)
Total	34.6	34.5	8.6	8.1

 

 

For the Racing and Digital division, overall revenues have increased to £34.6m (2014: £34.5m) with a foreign exchange benefit of £0.7m, and EBITDA for the division has increased by £0.5m to £8.6m (2014: £8.1m) with a foreign exchange benefit of £0.1m. Within tote services and equipment sales, on a constant currency basis, revenues are £0.9m ahead of prior year. Overall revenues from the US and Dominican Republic were in line with prior year with growth from Bump. Total equipment sales revenues in the period were £4.7m (2014: £3.4m, constant currency basis).

 

Strong EBITDA performance in tote services was driven by the new contract with Betfred (Totepool), increased maintenance revenues from new customers, and cost efficiencies.

 

In addition to the successful implementation of our Quantum Tote system, together with supporting software and hardware to Betfred, in the US Sportech Racing has signed new long-term contracts with Remington Park and Lonestar Park to supply on-track technology, including the recently launched Digital Link mobile betting app. The announcement in December of our two new customers in Asia, Royal Sabah Turf Club of Malaysia and Sports Network Limited, a reseller to Vietnamese tracks, mark our first steps into Asia, further expanding our global presence.

 

As previously reported, we lost two significant Digital customers earlier in the year, one of whom ceased all racing operations in April 2015. Cost actions, including a management restructure, have helped mitigate the EBITDA impact, although EBITDA has fallen to £0.6m (2014: £1.2m, constant currency basis). However, since then we have secured new customers, including Hawthorne racecourse in Chicago and a contract with Penn National Gaming Inc. to deliver new internet and mobile solutions, providing the G4 internet betting platform and Digital Link mobile betting app, together with associated services, including telephone betting, customer services and technical support.

 

The exit from our contract to operate betting for the California racing industry in October incurred exceptional costs of £0.6m relating to staff restructuring and terminal transport. We have reallocated a number of betting terminals from the California business to new and existing contracts, with the remaining book value of those terminals and associated software of £2.4m being written off. To drive further efficiencies, we also decided to exit our loss-making contract with German racing at the end of the year. As a result, we have consolidated our data and operations centre activities into New Jersey, and therefore closed the German-based operations centre. Restructuring costs of £0.8m were incurred as part of these actions.

 

Sportech Venues

 

(i)   Sportech Venues: Business Review

In the State of Connecticut, Sportech Venues operates all betting on horseracing, greyhound racing and Jai-Alai under an exclusive and in perpetuity licence for retail, telephone, internet and mobile. The business, which is operated with close consultation and oversight from the State, is the only legally permitted betting operator in Connecticut. In time, we would hope to be in a position to offer betting on sports and slots.

 

Further to this, we remain involved in the ongoing debate and discussions concerning the expansion of machine slots. Our involvement is based on the potential opportunity for the business, but also acts as a defensive move to counter the expected loss of taxation revenues for, and employment in, the State through the expected opening of new casinos in neighbouring states.

 

We continue to develop our retail estate under our exclusive licence, and have full approvals for the development of a $7m flagship sports bar, restaurant and betting venue in downtown Stamford. As with our sports bar and betting facility in Bradley, this will be done in partnership with Bobby Valentine, who will relocate his existing renowned sports bar and restaurant into the new facility. An additional venue is progressing through the planning stage.

 

We have appointed the land and property consultant, CBRE, to market and sell surplus property and land assets we own in New Haven, Connecticut. This is expected to realise capital capable of funding the majority of our venues build out strategy up to 2018.

 

We previously announced that our Connecticut venues business was impacted by the severe winter weather at the beginning of 2015 which caused significant race cancellations, together with the absence of popular betting content due to the temporary closure of a Jai-Alai venue throughout the year. Despite this and competition faced from unlicensed illegal internet operators who continue to take bets (together with tax and jobs) from Connecticut residents, despite the issue of cease and desist letters, a 50% growth in internet betting was achieved. We anticipate support from the State to protect the terms of our licence, and to grow jobs and State tax revenues.

 

We have extended our business strategy from Connecticut into California, where the Group has an agreement to develop up to ten new sports bar, restaurant and betting venues across Southern California under the brand name "Striders". The first of these had its launch on 28 January 2016, having had its soft launch in late 2015.  This venue has been developed as a joint venture with local operator, Silky Sullivan Group. The Group also has approval to construct a second site in the town of Norco.

 

In the Netherlands we operate a number of OTBs, point-of-sale terminals and online betting on horseracing, all on an exclusive basis under a licence from the Ministry of Justice. This licence is in place until December 2016 and we continue to work closely with the Government, the regulator and the horseracing industry regarding the future regulatory plans.

 

 

(ii)   Sportech Venues: Financial Review

	Revenue		EBITDA
£m	2015 FY	2014 FY	2015 FY	2014 FY
Venues            -  Connecticut	27.6	29.2	2.6	3.3
Other Venues   -  Netherlands	4.6	4.6	0.2	0.1
-  California	0.5	0.4	-	-
FX effect	-	(1.6)	-	(0.2)
Total	32.7	32.6	2.8	3.2

 

Overall revenues have increased to £32.7m (2014: £32.6m), which includes a £1.6m benefit from foreign exchange, whilst EBITDA has fallen to £2.8m (2014: £3.2m), again with a £0.2m benefit from foreign exchange.

 

The impact of the previously mentioned extreme weather in Connecticut and the temporary Jai-Alai venue closure for refurbishment accounted for 6% reduction in betting volumes in the year and we anticipate a recovery in betting volumes in 2016, and indeed the Jai-Alai venue has now re-opened. The reduction in betting revenues has contributed to revenues and EBITDA in Connecticut declining by £1.6m and £0.7m respectively, compared to prior year at constant currency.

 

Our venue at Bradley made a contribution of $1.0m, before central costs, and it was pleasing that the food and beverage at this venue (Bobby V's sports bar and restaurant) moved to break-even in 2015 and in 2016 is currently more than 30% up compared to the same period last year.

 

In the Netherlands our business performed in line with last year, with revenues stable at £4.6m (2014: £4.6m) and EBITDA marginally up to £0.2m (2014: £0.1m), comparatives at constant currency.

 

In addition to our recently opened Striders venue, in California, we also supply technology services to eight independently owned sports bar locations in the south of the State. Amounts wagered at these locations generated revenues of £0.5m (2014: £0.4m).

 

Football Pools

 

(i)   Football Pools: Business Review

Several years ago, we set out a clear strategy for the Football Pools division, forecasting EBITDA of £15.0m in 2015, followed by earnings stability and growth thereafter. To achieve that position, the business needed to improve customer retention, increase spend per head from core customers, recruit new players and convert existing paper players into direct debit and online channels. To support delivery of this strategy, the business needed to modernise its operations and consolidate its customers into a single database, enabling greater cross-sell opportunities with a lower, more agile operating cost base.

 

We are pleased, therefore, that the 2015 Football Pools EBITDA was £15.2m. Ongoing improvements in technology platforms will provide a basis for stability and subsequently growth in future years.

 

(ii)   Football Pools: Financial Review

	Revenue		EBITDA
£m	2015 FY	2014 FY	2015 FY	2014 FY
Football Pools	33.8	38.0	15.2	16.6

 

The financial results for the Football Pools were as expected and in line with the strategic plan. Revenues for the period were £33.8m (2014: £38.0m), with 70% of the reduction due to the decrease in the number of customers who play by the collector channel. As mentioned, EBITDA was £15.2m (2014: £16.6m).

 

The continued focus on the subscription channel revenues saw weekly spend per customer increasing 2.7% to £2.95 (2014: £2.88), offsetting some of the reduction in customer numbers. Subscription revenues showed increasing signs of a move towards stability at £27.3m (2014: £28.1m).

 

In December 2015, our main Classic Pools game had 221,000 subscription customers (2014: 240,000). Encouragingly, over 60% of our customers are now playing by direct debit. 18,000 new subscription customers were recruited (2014: 23,000), with 9,300 from digital channels (2014: 8,900).

 

In the second half of 2015, footballpools.com released a newly configured version of the website. The latest code offers flexibility to create new game formats and features, such as new payment types, and also gives the opportunity for improved analysis of players' online behaviour. These developments also provided the launch pad for the development of an iOS App, giving the Football Pools the opportunity to reach more mobile users and raise engagement levels.

 

These developments have put us in the position to drive online revenue growth, and our average weekly gross win in the first 6 weeks of 2016 is 59% higher than the same period in 2015.

 

We anticipate exceptional costs for modernisation of up to £3.0m this year.

 

Corporate costs

 

Corporate costs of £3.5m (2014: £3.9m) have been reduced by 10% and remain tightly controlled. In addition, we also have a non-cash share option expense under IFRS 2 of £0.5m (2014: £0.6m).

 

Depreciation, amortisation and impairment of assets

 

The Group's normal depreciation and amortisation charge increased in the period to £7.6m (2014: £6.2m), principally due to the ongoing capital expenditure in our businesses in North America.

 

The Group incurred a non-cash amortisation charge of £1.2m (2014: £1.4m) on the intangible assets acquired with eBet in 2012, Datatote in 2014 and Bump in 2015. The prior year also included amortisation of intangibles acquired with Vernons in 2007 of £2.7m, which became fully amortised in June 2014. A non-cash impairment charge of £3.7m has been charged against the goodwill recognised on the original acquisition of eBet in 2012. Impairment charges against fixed assets previously deployed in California (£2.4m) have also been recognised in the year. In 2014, an impairment of £28.1m was recorded to reduce the carrying value of the Football Pools goodwill to £119.5m.

 

Exceptional income

 

During the period, the Group completed the sale of its iGaming interest in New Jersey, generating a profit of £8.1m on disposal. We sold our 50% stake in Sportech-NYX Gaming, LLC ("SNG") to our joint venture partner, NYX Gaming Group Limited ("NYX"), for a total consideration of up to CAD $22.1m (£11.3m), comprising £5.1m cash, 2.2 million NYX ordinary shares equating to an aggregate value of CAD $9.1m (£4.7m) at a price of CAD $4.15 per share and up to a maximum of CAD $3.0m (£1.5m) in contingent consideration. This contingent consideration is discounted at disposal date to £1.1m to give a fair value of total consideration recognised of £10.9m.

 

Exceptional costs

 

The Group has incurred exceptional administration costs of £2.6m (2014: £2.3m) in the twelve-month period. These costs include restructuring and other costs of £1.0m (2014: £1.4m) of which £0.8m relate to the closure of our loss-making German operations. Costs of £0.6m (2014: £nil) comprising restructuring, terminal transport and storage were incurred following the loss of the Californian contract in the Racing & Digital division. We incurred costs of £0.2m (2014: £nil) in relation to potential corporate activity, costs in relation to the set-up of our joint venture companies of £0.2m (2014: £0.6m), costs in relation to the granting of our New Jersey licence of £0.3m (2014: £0.1m), and transaction costs in relation to acquisitions of £0.1m (2014: £0.1m). Realised fair value losses on the NYX ordinary shares held by the Group of £0.2m have also been incurred in the year (2014: £nil), representing movement in the NYX share price from the disposal date to the date the shares were received. The costs disclosed as exceptional are consistent with the type of cost disclosed as exceptional in prior periods.

 

Net finance costs

 

The Group has incurred net interest costs in the period of £3.2m (2014: £2.8m), with the increase over prior year due to the savings made in 2014 from holding £93m in cash in relation to the VAT repayment claim from the end of June to November 2014, when it was repaid. In addition, other finance income amounted to £0.6m (2014: £0.3m), reflecting the credit of fair value movement on interest rate swaps of £0.5m and foreign exchange gains on inter-company loans of £0.4m, net of £0.3m exceptional finance costs (2014: £nil) in relation to banking facility amendments.

 

Taxation

 

A tax charge for the period of £3.0m (2014: £1.3m) has been provided at the weighted average applicable tax rate for the Group of 17.0% (2014: 23.0%) together with the tax effects of permanent differences and other adjustments. The Group has a net deferred tax asset of £0.5m (2014: £0.8m), representing primarily foreign taxes withheld, which can be utilised against future profits. Tax payments of £2.3m were made during the period (2014: £1.3m), principally representing final payments for prior-year tax liabilities and overseas tax deducted at source.

 

Net bank debt

The Group continues to operate comfortably within its covenant test ratios. We amended the terms of our revolving credit facility during the year, reducing the facility to £75m whilst obtaining improved covenant terms. The facility is in place until August 2018 with a banking syndicate of Royal Bank of Scotland plc, Barclays Bank PLC and Bank of Scotland plc. Net bank debt has decreased by £6.1m (10%) in the year to £57.7m (31 December 2014: £63.8m). The Group's bank leverage ratio for covenant testing purposes (adjusted net bank debt/adjusted EBITDA) has improved to 2.50x as at 31 December 2015 (31 December 2014: 2.66x), comfortably satisfying the bank leverage covenant test of 3.00x. Under the revised terms of the facility, this leverage covenant decreases to 2.75x at December 2016 and 2.50x at June 2017.

 

Capital expenditure

 

The Group is starting to see the benefit of its previous heavy technological investment and is now able to reduce its capital expenditure levels accordingly. As the Group has continued to develop its divisional technology offering, capital expenditure reduced 16% (£1.6m) in the period to £8.4m (2014: £10.0m).

 

Acquisitions and investment in joint ventures

 

The Group has invested £1.1m into its Californian joint venture for build-out and start-up costs in relation to its San Diego venue. The Group had also invested £2.1m in our iGaming interests in New Jersey, prior to its profitable disposal and we continue to support the running costs of our Indian joint venture at £0.2m per annum.

 

During the year the Group acquired a 39.2% share in DraftDay for nil cash consideration. The Group has recorded an asset and corresponding liability in respect of the management time and customer contacts that will be provided. 

 

 

VAT claim

 

In November, the Group was advised that the scheduled appeal hearing in respect of the "Spot the Ball" VAT claim for approximately £97m was delayed. This appeal will now be heard on 7/8 April 2016.

 

Dividend

 

No dividend is proposed. The Board will continue to assess when to commence the payment of dividends.

 

Shareholders' funds

 

Total equity and the Group's net assets at 31 December 2015 have increased to £126.2m (2014: £119.8m).

 

Board and employees

 

The Board is pleased that the appointment of Mickey Kalifa as Chief Financial Officer takes effect from today. Mickey has been our Corporate Development Director for the last six years. He has extensive experience in finance and executive roles with some of the world's largest media and technology companies, including Young & Rubicam, Disney, Time Warner, BSkyB and Liberty Media. He succeeds Cliff Baty, whom we thank for his contribution to the Group.

Sportech is a geographically diverse business which places significant demands upon executives and employees. The Board would like to thank them for their dedication and commitment to the Group.

 

Corporate Activity

 

During the year the Group received an indicative proposal from Contagious Gaming Inc. but this did not result in a formal offer being made. In December, following receipt of a number of indicative proposals in respect of the Football Pools, the Board invited interested parties to submit their best offers in early 2016, and the Board continues with this process.

 

Outlook

           

We have started the year well and, for the first two months of the year, are trading in line with expectations.

 

Sportech has established a unique position in the regulated gaming market worldwide, most notably with our licensed gaming businesses in the US. Following a number of years of significant investment in our technology and licensing, we are now in the position to grow our business, dispose of surplus property assets, benefit from regulatory change and deliver earnings stability and then growth within the Football Pools.

 

We will take the actions that are required to deliver value to our shareholders.

 

 

Ian Penrose

Chief Executive

 

3 March 2016

 

 

 

Consolidated income statement
For the year ended 31 December 2015

		2015	2014
	Note	£m	£m
Revenue		100.2	104.1
Cost of sales		(58.2)	(58.1)
Gross profit		42.0	46.0
Distribution costs		(0.6)	(0.9)
Administrative expenses		(36.3)	(62.4)
Other operating income		8.1	-
EBITDA before exceptional items, share option expense and impairment of assets		23.1	24.0
Share option expense		(0.5)	(0.6)
Depreciation and amortisation (excluding amortisation of acquired intangibles)		(7.6)	(6.2)
Amortisation of acquired intangibles		(1.2)	(4.1)
Impairment of assets		(6.1)	(28.1)
Exceptional income	6	8.1	-
Exceptional costs	5	(2.6)	(2.3)
Operating profit/(loss)		13.2	(17.3)
Finance costs	7	(3.2)	(2.8)
Other finance income	7	0.6	0.3
Net finance costs	7	(2.6)	(2.5)
Share of loss after tax and impairment of joint ventures and associates		(0.9)	(0.2)
Profit/(loss) before taxation		9.7	(20.0)
Adjusted profit before taxation *		11.8	14.4
Taxation	8	(3.0)	(1.3)
Profit/(loss) for the year		6.7	(21.3)
Attributable to:
Owners of the Company		6.7	(21.3)
Non-controlling interests		-	-
		6.7	(21.3)
Earnings/(loss) per share attributable to owners of the Company
Basic	9	3.3p	(10.4)p
Diluted	9	3.1p	(9.9)p
Adjusted earnings per share attributable to owners of the Company
Basic	9	4.4p	5.5p
Diluted	9	4.2p	5.2p

* Adjusted profit before taxation is profit before taxation, amortisation of acquired intangibles, impairment of assets, exceptional items, share of loss after tax and impairment of joint ventures and associates, and other finance income.