Significant revenue increases driven by successful operation of SMS-based lottery
MONTREAL, Aug. 29, 2011 /CNW/ - Amaya Gaming Group Inc. (TSXV: AYA), an entertainment solutions provider for the regulated gaming industry, today announced its financial results for the quarter ended June 30, 2011. All amounts are stated in Canadian dollars unless otherwise noted.
|FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30||
|Net earnings (loss) and comprehensive income (loss)||(1,108,123)||58,751||(2,929,785)||507,814|
|Basic and diluted earnings (loss) per share||(0.03)||0.01||(0.07)||0.02|
OTHER RECENT HIGHLIGHTS
- On April 13, Amaya announced that its SMS-based lottery solution currently in operation in Kenya had surpassed 100,000 SMS lotto tickets purchased in a day, far exceeding initial targets. Subsequent to that announcement, the daily peak surpassed 200,000 SMS lotto tickets sold.
- On April 27, the Corporation announced an agreement with Société des Casinos du Québec to provide virtual horse racing systems for use at several properties including the Montreal and Lac Leamy Casinos.
- On May 26, the Corporation announced a lottery and online gaming contract with Montenegro, its first such contract with a European country.
- On June 15, the Corporation announced the closing of a bought deal private placement of 3,300,000 common shares at a price of $3.10 per share, for aggregate gross proceeds of $10,230,000.
- On July 14, the Corporation completed its previously announced acquisition of Chartwell Technology Inc. for consideration totalling $22.7 million. The combination of the two business is expected to result in synergies and new growth opportunities for both.
"Our second quarter results illustrate the impact our business can experience from launching even a single gaming solution. The majority of our revenue growth was attributable to the operation of the SMS Lottery in the Republic of Kenya for its first full quarter," said Mr. David Baazov, President and Chief Executive Officer of Amaya Gaming Group. "Looking forward, we are in the process of implementing several of the additional contract wins that we have announced in recent months, and we expect these initiatives to lead to further growth in our recurring revenue base in the coming periods. The addition of the Chartwell Technology business will also help us accelerate our growth beginning in our fiscal 2011 third quarter."
Amaya reported revenues of $3.77 million for the second quarter of 2011, an increase of $2.76 million or 275% compared to $1.01 million of revenues in the second quarter of 2010. For the six-month period ending June 30, 2011, revenues were $4.91 million, an increase of $2.42 million or 97% compared to $2.49 million of revenues in the same period of 2010. The increase reflects the Corporation's efforts to gain traction of its solutions aimed at the hospitality and government sectors and SMS sales in the Republic of Kenya.
Amaya's gross profit was 94% in the second quarter of 2011, compared to 82% in the second quarter of 2010. For the year-to-date period, gross profit was 95% for the first six months of 2011, compared to 81% in the first half of 2010. Increases in gross profit for both the three month and six month periods were primarily driven by software license sales and SMS sales in the Republic of Kenya.
Sales and marketing expenses were $1.77 million for the second quarter of 2011, compared to $0.17 million a year earlier. On a year-to-date basis, sales and marketing expenses were $3.69 million in 2011 compared to $0.38 million in 2010. General and administrative expenses were $2.15 million for the second quarter of 2011, compared to $0.79 million in Q2 2010. For the six-month period, general and administrative expenses were $3.56 million in 2011 compared to $1.25 million in 2010. The year-over-year increases are mainly attributable to advertising, marketing, and prize pool funding for the SMS Lottery operation in the Republic of Kenya as well as a growing employee base and a fully staffed operation in that country.
Amaya recorded a net loss of $1.11 million in the second quarter of 2011, representing ($0.03) per share, compared to net earnings of $58,751 or $0.01 per share in the second quarter of 2010. On a year-to-date basis, a net loss of $2.93 million in 2011 compares to net earnings of $0.51 million the previous year. While revenues have grown significantly in 2011, the increases have been offset by substantial increases in operating expenses incurred as the Corporation has invested in its continued growth.
2011 SECOND QUARTER FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS
The complete financial statements, notes to financial statements and Management's Discussion and Analysis for the three-month period ending June 30, 2011, are available on the SEDAR Website at www.sedar.com
ABOUT AMAYA GAMING GROUP INC.
Amaya is engaged in the design, development, manufacturing, distribution and sale of technology based gaming solutions for the regulated gaming industry worldwide. For more information please visit www.amayagaming.com
DISCLAIMER IN REGARDS TO FORWARD-LOOKING STATEMENTS
Certain statements included herein, including those that express management's expectations or estimates of our future performance constitute "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Investors are cautioned not to put undue reliance on forward looking statements. Except as required by law, the Corporation does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events.
"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."