Amounts wagered for the year ended 31 July 2011 grew by 4.2% to £2,053.9m (2010: £1,971.3m), earning net gaming revenue ("NGR") of £204.0m (2010: £207.5m), down 1.7% on the prior year. At constant currency and taking into account our exit from France and Norway in the prior year, NGR was up 1.2% on a like for like basis.
Amounts wagered on sports betting in Europe (incorporating the financial results for the Emerging Markets division) grew by 0.8% to £1,174.6m (2010: £1,165.1m), earning NGR of £109.5m (2010: £111.6m) down 1.9% year on year. On a like for like basis European sports NGR was up 3.9%.
Casino and gaming contributed a further £44.0m, and poker £13.3m, to both amounts wagered and NGR (2010: £44.9m and £17.4m).
Amounts wagered on Australian sports betting grew by 10.5% to £822.0m (2010: £743.9m), earning post betting tax NGR of £37.2m (2010: £33.6m). This growth excludes the Centrebet acquisition which was completed following the year end.
As a percentage of amounts wagered, the European and Australian sports NGR were 9.3% and 4.5% respectively (2010: 9.6% and 4.5%). However, amounts wagered and NGR are stated after a deduction for customer bonuses of £20.3m (2010: £18.8m). Without the bonus deduction the equivalent numbers would have been 10.0% and 4.9% (2010: 10.3% and 4.7%).
Costs (excluding exceptional items, share option charge and amortisation) in the year were £168.2m (2010: £172.1m), accounting for 81.5% of revenue (2010: 82.9%).
Operating profit (before exceptional items, share option charge and amortisation) for the year increased 8% to £38.1m (2010: £35.4m).
Earnings before interest, tax, depreciation and amortisation (before exceptional items and share option charge) increased 11% to £51.4m (2010: £46.5m).
Operating profit after the exceptional costs of £10.8m (2010: £24.5m), share option charge of £1.2m (2010: £2.0m) and amortisation of other intangible assets of £1.7m (2010: £1.8m) was £24.4m (2010: £7.1m).
Net finance cost was £0.6m (2010: £0.2m).
Corporation tax increased to £3.1m (2010: £3.0m) due to the increased profitability of our Australian business.
Exceptional costs totalled £10.8m (2010: £24.5m). These costs relate mostly to the acquisition of Centrebet International Limited and the possible disposal of the Turkish language website.
Adjusted basic earnings per share (before exceptional items, share option charge and amortisation) was 6.6p (2010: 6.5p). Diluted earnings per share (before exceptional items, share option charge and amortisation) was 6.3p (2010: 6.2p). Basic Group statutory earnings per share was 3.9p (2010: 0.8p).
As at 31 July 2011, the Group had £180.2m (2010: £58.9m) of cash and liquid resources on its balance sheet. After taking into account £123.6m held in respect of the acquisition of Centrebet, £22.7m (2010: £18.2m) of customer liabilities, £4.0m (2010: £4.0m) of bank loans secured on residential properties in the Channel Islands and £3.1m (2010: £2.5m) of finance leases, net cash at the period end stood at £26.8m (2010: £34.2m).
The Group's treasury function provides a centralised service for the provision of finance and the management and control of liquidity, foreign exchange and interest rates. The function operates as a cost centre and manages the Group's treasury exposure to reduce risk in accordance with policies approved by the Board.
It is not the policy of the Group to trade in or enter into speculative transactions. Authorities, procedures and reporting responsibilities are documented and regularly reviewed.
Due to the international nature of its core activities, the Group's reported profits, net assets and cash flows are all affected by foreign exchange rate movements.
Operations are financed by a mixture of retained profits, bank borrowings and long-term loans. In addition, various financial instruments, such as trade receivables and trade payables, arise directly from the Group's operations.
Certain customers in the Australian region are allowed to place bets on credit. The Group's policy of respect of credit risk is to require that appropriate credit checks are made on potential customers before bets are placed and credit limits set accordingly.
The Group continues to use forward currency contracts to manage foreign currency risks.