Trading update shows re-domiciliation from Luxembourg to IOM is in train
Online betting group Gaming VC Holdings S.A. has announced its intention to seek the formal approval of shareholders for a redomiciliation of the company from Luxembourg to the Isle of Man.
The disclosure came during a trading update on the first six months of 2009 showing that Gaming VC experienced a decline in volumes during Q4 2008 as a result of the global economic downturn.
Management reported that although trading conditions remain challenging, the company has seen some recovery in volumes.
Unaudited revenues for the six months to 30 June 2009 were Euro 26.5 million versus Euro 24 million in H2 2008 and Euro 26.1 million in H1 2008.
H1 2009 sportsbook volumes are up at Euro 4.9 million (H1 2008: Euro 3.1 million), whilst gaming volumes have declined to Euro 21.6 million (H1 2008: Euro 21.9 million)
Management reported that at Gaming VC's mainstream casino offering, Casino-club.com, volumes have been affected by global economic conditions with "high-roller" customers spending less rather than a decline in overall active numbers.
Sportsbook revenues continued to grow and the sportsbook margin was 16.3 percent in H1 2009 compared to 14.7 percent in H1 2008. Margins were affected by predictable football results in the closing weeks of the season but the directors are pleased with the overall sports margin and turnover achieved in the first six months.
"Trading in the second half of 2009 remains in line with management expectations over all areas of the business," the statement reads. "The company's recent South American acquisition is performing and growing well.
"Trading conditions for the rest of 2009 are expected to remain challenging but the Board remains cautiously confident for the second half of the year."
At 30 June 2009, the Gaming VC had net cash balances of Euro 20.8 million. The initial purchase consideration for Betboo (see previous InfoPowa report) was US$4 million (Euro 3 million), paid on 2 July 2009. The net cash balances at 14 August 2009 were Euro 19.1 million.
Regarding its move to the Isle of Man, Management said the principal benefits include:
* The Company's shares will become CREST eligible, therefore avoiding the need for Depositary Receipts;
* The Company will become subject to the City Code on Takeovers and Mergers;
* Dividends will be paid without the 15 percent withholding tax deduction applicable in Luxembourg; and
* The Isle of Man, as a "white-listed" jurisdiction, is familiar with internet gaming companies.
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