Cherryföretagen: Interim Report Q1, January 1 - March 31, 2010Highlights
Interim Report;
* On March 31, 2010, Cherry completed the acquisition of AutomatGruppen. The companies within the group are marketing, SverigeAutomaten, NorgesAutomaten and DanmarksAutomaten. The turnover was MSEK 48 and recorded a profit of MSEK 12.8 before tax for Q1 which was in line with the expectations for Q1. (Cherry is entitled to the revenues from AutomatGruppen as of January 1, 2010, but operations are not consolidated in the Cherry Group until the date of the acquisition, March 31, in accordance with IFRS).
* The number of registered customers from the web sites - AutomatGruppen and PlayCherry amounted on March 31 to 70 695. The number of new customers during the period amounted to 7 107 and the number of active clients were 14 763. Deposits in Q1 amounted to MSEK 151,5.
* Cherry has revised its financial targets over a business cycle.
- Sales growth should be at least 10 percent per year (5 percent).
- The profit margin should exceed 10 percent (4 percent).
- The solidity shall be at least 30 percent (40 percent).
- Dividends will be 50 percent of profits after provided that the financial situation and investment needs allow.
* Cherry's rights issue in connection with the acquisition of AutomatGruppen was oversubscribed with 315 percent, of which 99 percent was on the basis of warrants and 216 percent without subscription rights.
* Group turnover, excluding AutomatGruppen, amounted to MSEK 54.2 (59.7).
* EBITDA was MSEK -0.1 (1.3). EBIT amounted to MSEK -2.9 (-1.7). In the results for the period the acquisition cost for AutomatGruppen, amounting to MSEK 1.2, is included.
* Profit after financial items amounted to MSEK -2.8 (-1.9) and first quarter results amounted to MSEK -1.9 (-1.9) equivalent SEK -0.38 (-0.40) per share after minority interests.
* Restaurant & EventCasino increased its revenues by 15.2 percent in Q1 and presents a continued good profitability and EBIT, which rose by 42.9 percent to MSEK 2.0 (1.4).
* Maritime Gaming reduces its revenues by 26.2 percent, mainly explained by the recession and that most of the Maritime Gaming revenues are in EURO and GBP. A Word from the CEO, Gunnar Lind
In the first quarter Cherry has taken a big step forward in online gaming. AutomatGruppen, with the known brands SverigeAutomaten, NorgesAutomaten and DanmarksAutomaten is from March 31 a part of Cherry's gaming pleasures. The acquisition is a part of the growth and development strategy Cherry has worked with for more than three years, during which period we have been an independent listed company. It gives Cherry a new strategic platform to work from. I can also see that the results from our new online activities for the first quarter are good and we see a potential for further growth.
Our traditional activities, Restaurant and EventCasino and Maritime Gaming show mixed results.
Restaurant and EventCasino shows continued growth which partly depends on a strong focus on new customers but also on the acquisition of Joker Casino. In retrospect it feels good that the business actions and the acquisitions that have been made in Restaurant and Event Casino are now paying off.
Cherry has, since long, had cash registers on all gaming tables. It has not previously been required, but as of July 2010, this becomes a legal requirement. We are just about to begin installation of the new cash registers at the tables. It is expected to result, in addition to better control, more sales when all the cash register systems are equipped with card payment function. Cherry has due to its ownership structure; size and seriousness been exempted from the requirement of control boxes. In general we welcome tougher and better monitoring of restaurant casino. We have often expressed views on the increasing and changing demands of the gaming operators in different contexts, while a desired modernization of the Swedish gambling legislation is due. The latter seems to take time - Cherry has not yet received any response to our proposals to adjusted bets, which were submitted over a year ago. A modernization of the legislation does not seem to be a matter of priority of our policy makers.
Maritime gaming is still showing poor results due to the recession. Some of our activities are in the Mediterranean, including traffic to and from Greece. We made some major changes especially in our Nordic operations during 2009 and a streamlining continues in other parts of the organization. In general and in the long-term we remain positive about the business area Maritime Gaming. Although many shipping companies now struggle, which of course have consequences for Cherry; it will sooner or later turn to the better. My view is that we are well equipped to meet increased demands on board the ships where we currently have gaming contracts.
Cherry's future is exciting and with our latest acquisition we now take a big step into the future. The board of Cherry has for 2010, revised Cherrys vision, business concept, long-term strategy and financial objectives. Over a business cycle growth shall increase to 10 percent per year and Cherry will give a dividend of 50 percent of profit after tax provided that the financial situation and investment requirements allow it. At the same time we will focus on increasing profit margins and maintain a sound solidity.
Cherry has from Q2 2010, three business areas and development projects to stand on, which gives us a good platform for the future. As I said earlier I believe that online gaming and physical gaming will, over time, come closer together as new technologies and the modernization of legislation are introduced. Simultaneously online gaming is surrounded by a regulatory framework that might be modified in various European countries. Cherry will continue its focus on development projects, in order to react quickly to different business opportunities that may arise.
Cherry is well equipped for the future!
For more information please see the full report.
Stockholm, May 20, 2010
Gunnar Lind
President and CEO
For further information, please contact Gunnar Lind, President and CEO, phone +46 8 514 969 50, +46 709 279 611, gunnar.lind@cherry.se
Cherry in brief
Cherry is a publicly traded Swedish gaming company with around 2,300 shareholders. Cherry's B share is listed on the AktieTorget Exchange. Cherryföretagen AB operates via its subsidiaries casino and machine gaming, as well as Internet gaming. The gaming operations are conducted via subsidiaries at restaurants in Sweden, on ships in northern Europe, the English Channel, the Irish Sea and the Mediterranean, and Internet gaming (PlayCherry.com, NorgesAutomaten.com, SverigeAutomaten.com and DanmarksAutomaten.com) from Malta. Cherry has a workforce of around 700. www.cherry.se
See Interim report 1 in Adobe Acrobat
Publicerat här: 5/20/2010 1:48:19 PM |