Altenholz, March 31, 2009 - JAXX AG (ISIN DE000A0JRU67) publishes its 2008 Annual Report today. As previously announced, the effects of the State Treaty on gaming, which took effect on January 1, 2008, led to an exceptionally high consolidated loss of EUR 16.9 million. EUR 15 million of that amount alone is attributable to non-cash write-offs and impairment which were necessitated by the new regulations that have descended into a legal wrangle in Germany. The JAXX Group has filed compensation claims amounting to more than EUR 9.0 million to date.
'We have been vehemently opposing a wave of over-regulation that has been threatening our home market of Germany,' remarked Mathias Dahms, founder of JAXX AG and also its new Management Board spokesman from April 1, 2009. 'But the notorious closed-shop deal among those who run the lottery organisation ultimately meant this trend was unstoppable. It is now up to EU judges to overturn the new gaming legislation.'
Consolidated revenue up 67 percent
Thanks solely to its prompt expansion into other European countries, the JAXX Group continues to post steep international growth despite the adverse conditions in Germany. Consolidated revenue was increased by 67 percent in the 2008 financial year, to EUR 123.5 million. The lion's share of revenue was again contributed by Sports Betting, which generated EUR 73.9 million (+73% compared with 2007), followed by Horse Betting on EUR 25.8 million, predominantly as a result of the first-time consolidation of pferdewetten.de AG, and Lottery on EUR 23.8 million (-18%).
'We have been forging ahead with expansion into new markets in order to make JAXX independent of the German lottery market, mired as it is in red tape,' added Mathias Dahms. 'And we can now claim to have achieved that goal.' Over 90 percent of the JAXX Group's revenue came from international activities in 2008.
Earning before interest, taxes, depreciation and amortisation fell from EUR 6.5 million in 2007 to EUR 6.0 million in 2008 due to the much higher non-recurring expenses. The increased depreciation and amortisation caused EBIT to tumble from EUR -4.9 million in the previous year to EUR -10.4 million in 2008.
Record revenue in fourth quarter
The JAXX Group posted the highest quarterly revenue in its ten-year history in the fourth quarter of 2008. Nevertheless, the extraordinary expense, depreciation of property, plant and equipment and goodwill amortisation left a clearly negative EBIT of EUR -9.7 million. After elimination of the non-recurring effects, EBIT for the fourth quarter was slightly positive at EUR 0.3 million.
The investments mybet (Malta), Digidis (Spain) and pferdewetten.de (Baden-Baden) established or acquired in an effort to move away from the German lottery market all posted earnings contributions ranging from the balanced to the clearly positive. Following its entry into the strategically significant British market, the subsidiary JAXX UK Ltd. still reported start-up losses of around EUR 2.0 million.
EUR 4.3 million cash flow from operations
The intact progress at operating level is reflected by the high cash flow
from operations of EUR 4.3 million. At the end of 2008, cash and cash
equivalents after investing and financing activities amounted to EUR 12.9 million (previous year: EUR 13.8 million). The equity ratio at December 31, 2008 was 41.8 percent, with a balance sheet total of EUR 48.6 million.
Meaningful forecast not yet possible
The 2008 financial year will be characterised by the strategic
repositioning of the JAXX Group. While the previous core business will
subside due to the cessation of agency operations for German lotteries,
fresh potential for earnings has been created by moving promptly into new markets and diversifying the product range.
It was already becoming apparent during 2008 that new products such as the pan-European lottery 'EuroMillions', the Spanish lotteries as well as casino and poker products are being well received by users. Other
attractive products such as new betting services from the British
subsidiary JAXX UK Ltd will extend the JAXX Group's product portfolio in
2009. In Germany, JAXX will restrict its activities to state-licensed
products or those not requiring permits.
The JAXX Group in addition continues to look for opportunities to venture into new markets in Europe, both through organic expansion and through appropriate acquisitions. The specific focus is on those countries in which the gaming market is already liberalised or where liberalisation is on the cards. They include Eastern European countries, but also nations where gaming is popular, such as Italy and France.
From an economic viewpoint, the JAXX AG Management Board expects revenue growth to remain in double figures in the 2009 financial year, with the betting segments again driving this development. While the investments mybet, DigiDis and pferdewetten.de should be able to boost their profitability in 2009, the successful performance of the remaining companies in the JAXX Group depends very much on how successfully they are able to compensate for the loss of online lottery agency business in Germany with new products.
'The first few weeks of the 2009 financial year have made a positive
impression,' commented Stefan Hänel, Finance Director of JAXX AG. 'But nobody can say at present how far the economic and financial crisis will affect our further development. It is not currently possible to make any meaningful statements on how the financial performance, net worth and financial position will develop over the next two financial years.'
0 People say:
Print
Send
