Companies news of 2017-11-14 (page 1)

 
Trifast Releases Half Year Earnings

LONDON, November 14, 2017 /PRNewswire/ --

Trifast plc (LSE Premium Listing: Ticker: TRI), leading international specialists in the engineering, manufacturing and distribution of high quality industrial fastenings to major global assembly industries has released its Half-year report for the period to September 2017 - the results reflect "Another six months of strong growth, with increased trading driving up the Group's underlying PBT."

Trifast (TR) has a global footprint that meets the needs of the Multinational OEM and Tier 1 customers that it supports in the key sectors of automotive, domestic appliances, electronics and distributors. It operates in 18 countries through 28 locations and exports to over 60 countries around the world supplying over 8 billion components every year to over 5000 companies globally.

To read the HY Financial Report in full, please go to www.trifast.com

To listen to the CEO, Mark Belton talking about trading and the business follow this live link:

https://www.brrmedia.co.uk/broadcasts-embed/5a057df02acfc74f9342e193/event

Malcolm Diamond MBE, Non-Executive Chairman at Trifast commented:

"HY2018 delivered another six months of strong growth, with ongoing investment across all of our regions. 

Our strong first half results, together with a robust balance sheet, good access to banking facilities and a proven track record of profitable investment, means the Group is in a great position to keep moving forward. The second half has started well and, with a robust pipeline in place, the Board remain confident of delivering its expectations for the current financial year. 

As an international business with over 70% of our revenue being generated outside of the UK, and a very well-balanced geographical and sector spread, the Board remains confident we have the flexibility and foresight to continue to grow, while facing any challenges head on as and when they arise." 

"I am personally proud and delighted to oversee the further capability development of our business whilst the core Trifast caring and informal interpersonal culture is jealously guarded by our management." 

"WE ARE FOCUSSED ON LEVERAGING OUR COMBINED STRENGTHS AS AN INTEGRATED AND INTERACTIVE GROUP" 

SUMMARY POINTS: 

TR strategy update 

"Our commitment to continuous operational improvement over the past five years has been rewarded with positive KPI performance against targets on a consistent annual basis, together with financial reward for our investors and staff.

Building on this success, the Board, led by Mark Belton, has initiated a major long-term project to provide the Group with improved real-time management information (including an innovative customer relationship management (CRM) and global enquiry system), paralleled with regular senior team training and operational meetings. This is aimed at significantly developing and integrating our existing IT infrastructure around the world so as to support our ongoing growth plans and meet our multinational OEM customers' evolving demands. One early benefit of this improved approach is that our six Asian factories are now sharing factory capacity data to enable work to be shared at times of feast and famine production issues - previously these were managed on a local basis, thus restricting revenue and cost recovery opportunities.

Furthermore, this enhanced use of collective resources is supported by major capital investments in Italy, Singapore and Taiwan, plus distribution and engineering capacity investment in the UK, Sweden, Spain and China.

Our search for suitable acquisitions continues to be a major strategic aim. Since we last reported in June 2017, two larger international targets were thoroughly investigated over several months by our newly formed global acquisitions team, but regrettably, both were finally rejected - more due to future revenue growth risk than to high valuations. Our team brings together the skills and experience needed to conduct initial due diligence without the need to appoint costly external financial advisers. These advisers will only be appointed in the future following the successful agreement of non-binding heads of terms."

Global market overview 

"We imagine that there are very few of us in commerce that have failed to be influenced by the recent geopolitical uncertainty that has abounded, and which shows every sign of continuing.

The Trifast Board and management team have concluded, that in our view, global market demand will remain dynamic, and so we have increased our focus on our customers and our supply chain, including our pricing negotiations with key suppliers. This is coupled with our ongoing forward investment in plant and machinery, automation and people skills."  

HY OPERATIONAL HIGHLIGHTS: 

  • Revenue up by 4.8% at Constant Exchange Rate (CER), 9.0% at AER, all organic growth
  • Underlying diluted earnings per share up by 8.1% at AER
  • Confidence for the future and continued profitable growth in a period of investment, drives an interim dividend increase of 10.0% to 1.10p
  • Ongoing investment for growth in our sales teams and operations around the world
  • Capital investment of £1.3m increases our manufacturing capacity and capability, with more to follow
  • Expanded distribution facilities in Shanghai, with plans in place for Holland and Northern Ireland
  • New TR Innovation and Technical Centre to be set up in Gothenburg, Sweden's electric vehicle development area
  • TR Fastenings Espana up and running, with a strong pipeline in place

Group website: www.trifast.com    

The Group employs c.1,200 staff across 28 global locations across the UK, Europe, Asia and the USA.

For more information, visit

Commercial website: www.trfastenings.com

LinkedIn: www.linkedin.com/company/tr-fastenings

Twitter: www.twitter.com/trfastenings

Facebook: www.facebook.com/trfastenings

Enquiries please contact:
Trifast plc
Office: +44(0)1825-747630
Head of Group Marketing - Abi Burnett
Email: corporate.enquiries@trifast.com

TooleyStreet Communications, IR & media relations
Fiona Tooley
Tel: +44(0)7785-703523
Email: fiona@tooleystreet.com

Hisense Purchases Toshiba Television Business

TOKYO, Nov. 14, 2017 /PRNewswire/ -- Hisense Electric Co., Ltd, a publicly listed subsidiary of Hisense Group, announced the purchase of Toshiba TV production, brand, R&D & operation service on November 14, 2017.

Hisense Purchases Toshiba Television Business

With its 142-year rich history, Toshiba has a leading display technology in Japan with the brand ranked highly international global technology brand list's.

Hisense will purchase 95% stock shares of Toshiba Visual Solutions Corporation ("TVS"), a wholly owned subsidiary of Toshiba Corporation for 12.9 billion Japanese Yen with Toshiba retaining 5% stock holding. Hisense will obtain the TVS businesses including production, research and development, and sales functions as well as license to use the Toshiba brand for a period of 40 years for visual solution partners operating in Europe, South East Asia and other markets.

TVS primarily operates in TV and variety of ancillary products, including commercial and advertisement display products. The TVS purchase also secures two factories in Japan and hundreds of talented Toshiba R&D employees as well as a significant IP portfolio relating to TV technology business patents for image quality and acoustics.

Mr. Liu Hongxin, the CEO of Hisense Group, said that Hisense would optimize TVS's resources on R&D, supply chain or global sales channels, cooperate with and support each other in display technology, provide competitive content operation services for smart TVs for the global market and accomplish fast growth in Japanese market.

According to the IHS, sales of Toshiba TV ranked No.3 in Japanese market in 2016 with the Hisense TV market share in Japan the highest among all non-Japanese brands. Collectively both brands' cumulative market share reaches over 20% after the transaction. Hisense's TV business in 2016 ranked third in the world (IHS) and has held NO.1 market share in China for 13 consecutive years.

As the Official Television Sponsor of the FIFA World Cup Russia 2018, Hisense is poised to continue to expand and implement its global brand vision and strategy. With the benefit of this acquisition, Hisense will develop and enlarge its international strategy of TV business in R&D, branding and marketing by operating under multiple brands. The cooperation between Hisense and Toshiba will drive changes to the new picture of TV business.

Photo - https://mma.prnewswire.com/media/603689/Hisense_Toshiba.jpg

MTS Announces Financial Results for the Third Quarter Ended September 30, 2017

MOSCOW, November 14, 2017 /PRNewswire/ --

MTS PJSC ("MTS" - NYSE: MBT; MOEX: MTSS), the leading telecommunications provider in Russia and the CIS, today announces its unaudited IFRS financial results for the three months ended September 30, 2017.

Andrei Dubovskov, President and Chief Executive Officer, commented on the results:

"We are pleased to report another strong set of results for MTS. For the period, Group revenue increased 2.1% year-over-year to RUB 114.6 bln as a sustained improvement in business and consumer sentiment has allowed us to monetize the strong growth in voice and data usage in Russia despite a slight year-over-year decline in subscribers. We saw a positive contribution from our Ukraine subsidiary, where growth is also fueled by increased data adoption. Our strong growth in profitability derives from increased usage of higher-value data products in Russia, including increased international roaming activity, in addition to our efforts to optimize retail operations. For the period, we realized gains from both a small reduction in retail outlets, dating from the beginning of the year, as well as a slight reduction in SIM-card sales.

We have been active in the digital space by expanding into areas, which complement our core offerings. We acquired LiteBox, a dynamic provider of online cash register services, to enhance our payments ecosystem and expand our B2B platform for merchants and other business customers. We also acquired a stake in Sistema Capital Management to enrich our financial service portfolio. We launched a Big-Data-as-a-Service (BDaaS) product, introduced a new app MTS Taxi and improved our interactive TV service offering with the goal of providing customers with broader and better services. We also signed a milestone agreement with Ericsson to prepare MTS' network for 5G services over the next few years.

Given our strong 9M performance, we feel we can amend our guidance to reflect our improving market position. For Group Revenue, we are narrowing our outlook from -2/+2% growth to 0/+2% growth. For Adjusted OIBDA, we are confident that we can raise guidance from >4% to >5% in spite of developments in Turkmenistan, which have negatively impacted both Group revenue and Adjusted OIBDA."

The full text of the release could be found at the Company's website http://www.mtsgsm.com/resources/reports/

Contact: Joshua B. Tulgan, Director, Corporate Finance & Investor Relations, Mobile TeleSystems PJSC, Tel: +7-495-223-2025, E-mail: ir@mts.ru

New Scan Heads Deliver Increased Stability of Laser Beam Focus

Cambridge Technology launches 3-Axis Lightning? II FX and ProSeries 2 FX for fiber laser applications

BEDFORD, Massachusetts, Nov. 14, 2017 /PRNewswire/ -- Cambridge Technology, a business unit of Novanta Corporation ("Novanta"), announced today the launch of its newest 3-axis scan heads, the Lightning? II FX and ProSeries 2 FX for fiber laser applications. The Lightning II FX and ProSeries 2 FX are part of a suite of 3-axis scan heads that feature an integrated dynamic focus module (DFM) that ensures the laser spot remains in focus across the entire work surface.

The Lightning II FX builds on the industry's most advanced all-digital technology, offering ultra-high levels of speed and accuracy. This new scan head is designed to meet the most demanding requirements of fiber laser applications. The ProSeries 2 FX offers field-proven, reliable, and cost-effective technology for a wide range of applications. Both products are designed for applications including laser additive manufacturing, laser welding and cutting, and laser surface treatment.

The new FX version of both products expands their ability to deliver a stable and high-quality laser beam spot when used with higher-power fiber lasers. The Lightning II FX and ProSeries 2 FX feature new mirror coatings with high reflectivity at fiber laser wavelengths and a new dynamic focus module lens to minimize optical loss and absorption. When working together, these features provide stable focus characteristics with reduced potential of thermal lensing at higher power levels.

"The new FX version of the Lightning II delivers enhanced laser beam focus stability, which delivers consistent power density on the work surface to achieve high-quality finish goods, a critical requirement for the aerospace, automotive, and electronics industries," said Gunnar Stolze, Vice President Global Sales, Cambridge Technology.

For more information about the Lightning II FX digital scan head and ProSeries 2 FX scan head, visit www.cambridgetechnology.com. The launch of Cambridge Technology's latest Lightning II FX and ProSeries 2 FX scan heads represents a commitment to enable their customers' success by offering a broad range of options, from individual beam steering components to fully-integrated photonics solutions.

About Cambridge Technology and Novanta
For almost 50 years, the Cambridge Technology business of Novanta has developed innovative beam steering solutions, including polygon- and galvanometer-based optical scanning components, 2-axis and 3-axis scan heads, scanning subsystems, high power scanning heads, and controlling hardware and software.

We collaborate with key OEMs to engineer products that meet their needs. Key market applications include advanced industrial processes including additive manufacturing, laser converting, laser marking, and via-hole drilling, and medical applications such as laser treatment and optical coherence tomography. Novanta (which trades publicly under its parent entity, Novanta Inc., NASDAQ: NOVT) is a trusted technology partner to original equipment manufacturers in the medical and advanced industrial technology markets, with deep proprietary expertise in photonics, vision and precision motion technologies.

Yatra Online, Inc. Announces Results for the Three Months Ended September 30, 2017

GURGAON, India and NEW YORK, November 14, 2017 /PRNewswire/ --

Yatra Online, Inc. (NASDAQ: YTRA) (OTCQX: YTROF), India's leading online travel company, today announced its unaudited financial and operating results for three months ended September 30, 2017.

     (Logo: http://mma.prnewswire.com/media/538225/Yatra_Logo.jpg )

Commenting on the performance, Dhruv Shringi, Yatra's Co-founder and CEO, said, "The symbiotic relationship between our consumer direct business and corporate travel business enabled us to deliver our highest quarterly growth in our history as a public company with improving economics - our Revenue less Service Cost grew 46.1% YoY while our adjusted EBITDA improved by over 50% sequentially. The acquisition of Air Travel Bureau ('ATB'), one of India's largest independent corporate travel companies during the quarter enabled us to create India's largest corporate travel platform with over 660 large customers. ATB for the moment continues to operate as an independent entity and we expect further growth and improved operating leverage once the ATB business is fully integrated."

Yatra Online, Inc.'s financial and operating results for the three months ended September 30, 2017, include the financial and operating results of Air Travel Bureau Limited for two months in which we acquired a majority ownership stake on August 4, 2017.

Financial and Operating highlights for the three months ended September 30, 2017:

  • Revenue increased by 33% year-over-year (YOY) to INR 2,575.3 million.
  • Revenue Less Service Cost[1] increased to INR 1,689.8 million, representing an increase of 46.1% YOY.
  • Revenue Less Service Cost[1] from Hotels and Packages increased to INR 320.1 million, an increase of 42.3% YOY.
  • Standalone Hotel Room Nights Booked during the quarter of 0.4 million, represented an increase of 47.7% YOY.
  • Revenue Less Service Cost[1] from Air Ticketing increased to INR 1,200.1 million, an increase of 40.3% YOY
  • Gross Air Passengers Booked were 2.2 million representing YOY growth of 31.7%.
  • Total Gross Bookings (Air Ticketing and Hotels and Packages) [3] reached INR 21.9 billion representing YOY growth of 40.2%.
  • Adjusted EBITDA[2] Loss of INR 288.5 million, an improvement of 12.1% YOY
Three months ended September 30,
2017        2017                   2016            YOY Change
Unaudited
(in thousands except
percentages)                      INR          USD           INR                     %
Financial Summary as
per IFRS
Revenue                    2,575,327         39,438     1,936,172                33.0%
Results from
operations                  (575,357)       (8,811)     (394,298)                45.9%
Loss for the period         (777,431)      (11,906)     (411,900)
Financial Summary as
per non-IFRS measures
Revenue Less Service
Costs [1]                   1,689,804        25,877     1,156,778                46.1%
Air Ticketing               1,200,146        18,379       855,704                40.3%
Hotels and Packages           320,076         4,902       224,946                42.3%
Other                         169,582         2,596        76,128               122.8%
Adjusted EBITDA [2]         (288,470)       (4,418)     (328,217)                12.1%
Operating Metrics
Gross Bookings [3]         21,905,258       335,456    15,619,316                40.2%
Air Ticketing              19,149,305       29,3251    13,423,566                42.7%
Hotels and Packages         2,755,953        42,205     2,195,750                25.5%
Net Revenue Margin%
[4]
Air Ticketing                   6.3%                         6.4%
Hotels and Packages            11.6%                        10.2%
Quantitative details
[5]
Air Passengers Booked           2,187                       1,660                31.7%
Stand-alone Hotel Room
Nights Booked                     443                         300                47.7%
Packages Passengers
Travelled                          32                          26                23.1%

Note: 

  1. Revenue Less Service Cost represents Revenue after deducting service costs. See "Certain Non-IFRS Measures"
  2. See section "Certain Non-IFRS Measures"
  3. Gross Bookings represent the total amount paid by our customers for travel services and products booked through us, including taxes, fees and other charges, and are net of cancellation fees and refunds.
  4. Net Revenue Margin is defined as Revenue Less Service Cost as a percentage of Gross Booking.
  5. Quantitative details are considered on a gross basis.

More details are available on our site - http://investors.yatra.com/home/default.aspx

About Yatra Online, Inc. and Yatra.com 

Yatra Online, Inc is the parent company of Yatra Online Pvt Ltd which is based in Gurugram, India and is one of India's leading online travel companies and operates the website Yatra.com. The company provides information, pricing, availability, and booking facility for domestic and international air travel, domestic and international hotel bookings, holiday packages, buses, trains, in city activities, inter-city and point-to-point cabs, homestays and cruises. As a leading platform of accommodation options, Yatra provides real-time bookings for more than 70,000 hotels in India and over 500,000 hotels around the world.

Customers can access Yatra in multiple ways: through a user-friendly website, mobile optimised WAP site and applications, a multi-lingual call centre, a countrywide network of Holiday Lounges and Yatra Travel Express stores.

Launched in August 2006, Yatra was ranked the Most Trusted e-Commerce Travel Brand in India in the Economic Times Brand Equity Survey 2016 for the second successive year, and has won the National Tourism Award for 'Best Domestic Tour Operator (Rest of India)' at the India Tourism Awards held in September 2017 for the third time in a row.

Safe Harbor Statement: 

This press release contains certain statements concerning the Company's future growth prospects and forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the Company's current expectations, assumptions, estimates and projections about the Company and its industry. These forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "anticipate," "believe," "estimate," "expect," "intend," "will," "project," "seek," "should" and similar expressions. Such statements include, among other things, management's beliefs as well as our strategic and operational plans. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, the slow-down of economic growth in India and the global economic downturn, general declines or disruptions in the travel industry, volatility in the trading price of our shares, our reliance on our relationships with travel suppliers and strategic alliances, failure to further increase our brand recognition to obtain new business partners and consumers, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in India and overseas, failure to successfully develop our corporate travel business, damage to or failure of our infrastructure and technology, loss of services of our key executives, and inflation in India and in other countries. These and other factors are discussed in our reports filed with the U.S. Securities and Exchange Commission. All information provided in this press release is provided as of the date of issuance of this press release, and we do not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For further information, please contact: 
Manish Hemrajani
Yatra Online, Inc.
VP, Head Investor Relations
manish.hemrajani@yatra.com
+1-646-875-8380

 

Sectra Wins Deal as Dutch Hospitals Merge and Consolidate Imaging

LINKÖPING, Sweden, Nov.14, 2017 /PRNewswire/ -- International medical imaging IT and cybersecurity company Sectra(STO: SECT B) has signed a PACS contract with the Dutch hospital Zuyderland. Zuyderland is a merger of two hospitals that have now chosen to replace their separate IT environments for reviewing radiology and nuclear medicine images and consolidate in a single common system from Sectra. The enterprise-wide solution will give physicians at Zuyderland a consolidated patient overview regardless of which hospital a patient has previously visited. 

"When merging, we of course wanted to consolidate our different IT environments," says Dirk Jan van Berckel, Department Manager Screening & Diagnostics at Zuyderland. "For us, it was important to partner with a vendor with proven high system availability and whose solution would also allow us to increase reading efficiency?in this case, for example, through integrated speech."

The contract comprises Sectra's solutions for reviewing medical images, PACS, and for handling radiology information, RIS. It will handle Zuyderland's approximately 400,000 radiology and nuclear medicine examinations.

About Sectra PACS
Sectra PACS is optimized for high production environments with stability and usability in focus. It is designed to shorten report turnaround times, enhance result distribution workflows, and improve communication between radiology and referring departments. For four continuous years, Sectra PACS has won the customer satisfaction award "Best in KLAS" for US hospitals with over 200 beds, and for three years in a row the "Best in KLAS" for Global (Non-US) PACS.

Experience the solutions at RSNA 2017
Sectra's solutions for radiology imaging will be showcased at RSNA in booth #6113. Read more and book a meeting with Sectra at RSNA.

For further information, please contact:
Dr. Torbjörn Kronander
CEO and President Sectra AB
46(0)705-23-52-27

Marie Ekström Trägårdh
Executive Vice President Sectra AB and President Sectra Imaging IT Solutions
46(0)708-23-56-10

This information was brought to you by Cision http://news.cision.com
http://news.cision.com/sectra/r/sectra-wins-deal-as-dutch-hospitals-merge-and-consolidate-imaging,c2390602

The following files are available for download:

 

Jackpotjoy plc: Results for the Three Months and Nine Months Ended 30 September 2017

LONDON, November 14, 2017 /PRNewswire/ --

Jackpotjoy plc (LSE: JPJ), the largest online bingo-led operator in the world, today announces the results of the Jackpotjoy group (the "Group") for the three and nine months ended 30 September 2017.

Financial summary 

Three      Three
months     months               Nine months Nine months
ended      ended                ended       ended
Reported                         Reported
30 Sept    30 Sept              30 Sept     30 Sept
2017       2016        Change   2017        2016        Change
(GBPm)     (GBPm)      %        (GBPm)      (GBPm)      %
Gaming revenue    75.4       66.4        14       222.0       194.0       14
Net loss (as
reported under
IFRS)[1]          (7.7)      (18.6)      59       (27.7)      (28.4)      2
Adjusted
EBITDA[1]         26.7       25.6        4        85.9        77.1        11
Adjusted net
income            18.3       21.2        (14)     60.9        63.7        (4)
Operating cash
flows             32.6       18.3        78       78.2        63.3        24

Financial highlights for the third quarter 

  • Strong financial performance:
    • Gaming revenue rose 14%, supported by 12% growth in the Jackpotjoy segment and 28% growth at Vera&John
    • Adjusted EBITDA[1] increased 4%, reflecting planned increase in marketing costs
    • Adjusted net income[1] decreased 14% year on year due to higher interest costs related to additional debt acquired to pay the earn-out
  • Ongoing good cash generation and net debt reduction:
    • Operating cash flow growth of 78% year on year, including a working capital inflow
    • 44p of operating cash flow per share[2]
    • Adjusted EBITDA[1] to cash conversion of over 100%
    • Adjusted net debt[1] reduced by £23.4 million; adjusted net leverage ratio[1] of 3.35x reduced from 3.60x at 30 June 2017

No change to full year 2017 outlook, management confident of meeting recently increased market consensus


Operational highlights for the third quarter 

  • Continued improvement in core KPIs[1] year on year
    • Average Active Customers[5] grew to 251,186 in LTM to 30 September 2017, an increase of 13% year on year
    • Average Real Money Gaming Revenue per month[5] grew to £22.6 million, an increase of 16% year on year
    • Monthly Real Money Gaming Revenue per Average Active Customer[5] of £90, an increase of 2% year on year

Business segments highlights for the third quarter 

  • Jackpotjoy (69% of Group revenue) - Positive quarterly performance across all brands with total revenue growth of 12%; Adjusted EBITDA[1] growth of 3% impacted by launch of new TV advertising in September; Starspins and Botemania brands (23% of segment revenues) continued to perform particularly strongly
  • Vera&John (24% of Group revenue) - Revenue growth of 28% and Adjusted EBITDA[1] growth of 40%; on a constant currency basis, revenue increased by 21%
  • Mandalay (7% of Group revenue) - Revenue decline of 8% and an Adjusted EBITDA[1] increase of 36% due to lower marketing spend

Financial highlights for the nine months of the year 

  •  Strong financial performance:

    • Gaming revenue growth of 14% year on year
    • Adjusted EBITDA[1] increased 11% year on year
    • Adjusted net income[1]decreased 4% year on year

Outlook  

The strong trading momentum seen over the first six months of the year continued into Q3 and into the early stages of Q4. As previously flagged, there will be an impact on profitability from Q4 onwards from the introduction of the UK point of consumption ("POC") tax on bonuses. Likewise, and also as previously highlighted, marketing spend is weighted towards the second half of the financial year. Management, however, remains confident in meeting the upper end of market expectations for FY17.  

Neil Goulden, Executive Chairman, commented: 

"The third quarter has seen a continuation in the strong underlying momentum that we saw during the first six months of 2017, with gaming revenue up 14% and Adjusted EBITDA[1] up 4%. There continues to be solid customer growth across the Group, with our Vera&John business segment performing particularly well, with constant currency revenue growth of 21% in the quarter.

I am very proud of the new integrated advertising campaign for our Jackpotjoy brand, which launched in the UK in mid-September. Television personality, Paddy McGuinness, succeeded Barbara Windsor as the new brand ambassador and early signs indicate that the campaign is helping to reinforce our market leadership position in online bingo in the UK.

Finally, in October, the Group announced that Andrew McIver will be stepping down from his role as Chief Executive Officer, having successfully overseen the listing on the London Stock Exchange earlier this year. In my new role as Executive Chairman, I will be responsible for leading the development and execution of long term strategy, while Simon Wykes has joined us as Group Managing Director to provide additional operational expertise.

Andy will step down as a Director on 31 December 2017 and will remain with the Company until 31 January 2018 to ensure a smooth transition of duties to the new members of the executive team. On behalf of the Board of Directors I would like to thank him for his work in helping establish the Group as a UK plc and I wish him well in the future.

Against a positive operational backdrop and given the new management structure in place, I have full confidence that Jackpotjoy plc will continue to go from strength to strength and generate attractive returns for our shareholders."

Conference call 

A conference call for analysts and investors will be held today at 1.00pm GMT / 8.00am ET. To participate, interested parties are asked to dial +44 (0) 20 3003 2666 or +1 800 608-0547, or for US shareholders +1 866 966-5335, 10 minutes prior to the scheduled start of the call using the reference ''Jackpotjoy'' when prompted.  A replay of the conference call will be available for 30 days by dialling +44 (0) 20 8196 1998 or +1 888 889-0604 and using reference 7636835#. A transcript will also be made available on Jackpotjoy plc's website at http://www.jackpotjoyplc.com/investors.

Note Regarding Non-IFRS Measures 

The following non-IFRS measures are used in this release because management believes that they provide additional useful information regarding ongoing operating and financial performance. Readers are cautioned that the definitions are not recognised measures under IFRS, do not have standardised meanings prescribed by IFRS, and should not be considered in isolation or construed to be alternatives to revenues and net income (loss) and comprehensive income (loss) for the period determined in accordance with IFRS or as indicators of performance, liquidity or cash flows. The Group's method of calculating these measures may differ from the method used by other entities. Accordingly, the Group's measures may not be comparable to similarly titled measures used by other entities or in other jurisdictions.   

Adjusted EBITDA, as defined by the Group, is income before interest expense (net of interest income), income taxes, amortisation and depreciation, share-based compensation, independent committee related expenses, severance costs, (gain)/loss on cross currency swap, fair value adjustments on contingent consideration, transaction related costs, foreign exchange, and gain on sale of intangible assets. Management believes that Adjusted EBITDA is another important indicator of the issuer's ability to generate liquidity to service outstanding debt and fund acquisition earn-out payments and uses this metric for such purpose. The exclusion of share-based compensation eliminates non-cash items and the exclusion of independent committee related expenses, severance costs, (gain)/loss on cross currency swap, fair value adjustments on contingent consideration, transaction related costs, foreign exchange, and gain on sale of intangible assets eliminates items which management believes are non-operational and non-routine.  

Adjusted net income, as defined by the Group, means net income plus or minus items of note that management may reasonably quantify and believes will provide the reader with a better understanding of the Group's underlying business performance. Adjusted net income is calculated by adjusting net income for accretion, amortisation of acquisition related purchase price intangibles and non-compete clauses, share-based compensation, independent committee related expenses, severance costs, (gain)/loss on cross currency swap, fair value adjustments on contingent consideration, transaction related costs, foreign exchange, and gain on sale of intangible assets. The exclusion of accretion and share-based compensation eliminates the non-cash impact and the exclusion of amortisation of acquisition related purchase price intangibles and non-compete clauses, independent committee related expenses, severance costs, (gain)/loss on cross currency swap, fair value adjustments on contingent consideration, transaction related costs, foreign exchange, and gain on sale of intangible assets eliminates items which management believes are non-operational and non-routine.   Adjusted net income is considered by some investors and analysts for the purpose of assisting in valuing a company.          

Cautionary Note Regarding Forward-Looking Information 

This release contains certain information and statements that may constitute "forward-looking information" (including future-oriented financial information and financial outlooks) within the meaning of applicable securities laws. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "estimates", "projects", "predicts", "targets", "seeks", "intends", "anticipates", "believes" or "is confident of" or the negative of such words or other variations of or synonyms for such words, or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause actual results, performance, achievements or developments to be materially different from those anticipated by the Group and expressed or implied by the forward-looking statements. Forward-looking information contained in this release includes, but is not limited to, statements with respect to the Group's future financial performance (including with respect to 2017 trading, POC tax, and our ability to pay down debt and earn-outs from future internally generated cash), the future prospects of the Group's business and operations, the Group's growth opportunities and the execution of its growth strategies. Certain of these statements relating to the Company's anticipated revenue growth and/or meeting the upper end of market expectations for FY 2017 and other similar statements may constitute a financial outlook within the meaning of Canadian securities laws. These statements reflect the Group's current expectations related to future events or its future results, performance, achievements or developments, and future trends affecting the Group. All such statements, other than statements of historical fact, are forward-looking information. Such forward-looking information is based on a number of assumptions which may prove to be incorrect, including, but not limited to, the ability of the Group to secure, maintain and comply with all required licenses, permits and certifications to carry out business in the jurisdictions in which it currently operates or intends to operate; governmental and regulatory actions, including the introduction of new laws or changes in laws (or the interpretation thereof) related to online gaming; general business, economic and market conditions (including market growth rates and the withdrawal of the UK from the European Union); the Group operating in foreign jurisdictions, the competitive environment; the expected growth of the online gaming market and potential new market opportunities; anticipated and unanticipated costs; the protection of the Group's intellectual property rights; the Group's ability to successfully integrate and realise the benefits of its completed acquisitions; the amount of expected earn-out payments required to be made; the Group's continued relationship with the Gamesys group and other third parties; the Group's ability to service its  debt obligations; and the ability of the Group to obtain additional financing, if, as and when required. Such statements could also be materially affected by risks relating to the lack of available and qualified personnel or management; stock market volatility; taxation policies; competition; foreign operations; the Group's limited operating history; and the Group's ability to access sufficient capital from internal or external sources. The foregoing risk factors are not intended to represent a complete list of factors that could affect the Group. Additional risk factors are discussed in Jackpotjoy plc's annual information form dated 29 March 2017. Although Jackpotjoy plc has attempted to identify important factors that could cause actual results, performance, achievements or developments to differ materially from those described in forward-looking statements, there may be other factors that cause actual results, performance, achievements or developments not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results, performance, achievement or developments are likely to differ, and may differ materially, from those expressed in or implied by the forward-looking information contained in this release. Accordingly, readers should not place undue reliance on forward-looking information. While subsequent events and developments may cause the Group's expectations, estimates and views to change, Jackpotjoy plc does not undertake or assume any obligation to update or revise any forward-looking information, except as required by applicable securities laws. The forward-looking information contained in this release should not be relied upon as representing the Group's expectations, estimates and views as of any date subsequent to the date of this release. The forward-looking information contained in this release is expressly qualified by this cautionary statement. Investors should not place undue reliance on forward-looking statements as the plans, intentions or expectations upon which they are based might not occur.  

Any future-oriented financial information or financial outlooks in this release are based on certain assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities. While Jackpotjoy plc considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. These risks, uncertainties and other factors include, but are not limited to: credit, market, currency, operational, liquidity and funding risks, including changes in economic conditions, and interest rates or tax rates. 

Financial Review 

Revenue 

The Group's revenues during the three months ended 30 September 2017 consisted of:

£52.2 million in revenue earned from Jackpotjoy's operational activities.  

£18.4 million in revenue earned from Vera&John's operational activities.

£4.9 million in revenue earned from Mandalay's operational activities.


The Group's revenues during the three months ended 30 September 2016 consisted of:

£46.7 million in revenue earned from Jackpotjoy's operational activities.  

£14.4 million in revenue earned from Vera&John's operational activities.

£5.3 million in revenue earned from Mandalay's operational activities.


The increase in revenue for the three months ended 30 September 2017 in comparison with the three months ended 30 September 2016 relates primarily to organic growth of the Vera&John and Jackpotjoy segments, where revenue increased by 28% and 12%, respectively.

Costs and expenses 

Three month period ended   Three month period ended
30 September 2017          30 September 2016
(GBP000's)                 (GBP000's)
Expenses:
Distribution costs               36,448                     31,518
Administrative costs             29,068                     24,689
Transaction related costs         1,361                     10,414
Severance costs                  -                          -
66,877                     66,621

Distribution costs 

Three month period ended    Three month period ended
30 September 2017           30 September 2016
(GBP000's)                  (GBP000's)
Selling and marketing           12,591                      10,796
Licensing fees                  11,771                      10,510
Gaming taxes                     8,742                       7,334
Processing fees                  3,344                       2,878
36,448                      31,518

Selling and marketing expenses consist of payments made to affiliates and general marketing expenses related to each brand.  Licensing fees consist of the fees for the Mandalay and Jackpotjoy segments to operate on their respective platforms and game suppliers' fees paid by the Vera&John and Jackpotjoy segments. Gaming taxes largely consist of POC tax, which is a 15% tax on Real Money Gaming Revenue[5] introduced in the UK in December 2014. Processing fees consist of costs associated with using payment providers and include payment service provider transaction and handling costs, as well as deposit and withdrawal fees.  With the exception of selling and marketing expenses, distribution costs tend to be variable in relation to revenue.

The increase in distribution costs for the three months ended 30 September 2017 compared to the same period in 2016 is mainly due to the higher revenues achieved.

Administrative costs 

Three month period ended Three month period ended
30 September 2017        30 September 2016
(GBP000's)               (GBP000's)
Compensation and benefits           9,631                    7,840
Professional fees                     670                      476
General and administrative          2,276                    1,920
Amortisation and depreciation      16,491                   14,453
29,068                   24,689

Compensation and benefits costs consist of salaries, wages, bonuses, directors' fees, benefits and share-based compensation expense. The increase in costs for the three months ended 30 September 2017 compared to the same period in 2016, relates to staff additions, operational bonus accruals, and salary increases in various business units.

Professional fees consist mainly of legal, accounting and audit fees.  The variance in professional fees for the three months ended 30 September 2017 compared to the same period in 2016 relates to increases in consulting and legal costs associated with the Group's growth and dual listings on both the London Stock Exchange and the Toronto Stock Exchange. 

General and administrative expenses consist of items, such as rent and occupancy, travel and accommodation, insurance, listing fees, technology and development costs, and other office overhead charges. The increase in these expenses for the three months ended 30 September 2017 compared to the same period in the prior year can be attributed mostly to higher travel costs incurred in the current period.

Amortisation and depreciation consists of amortisation of the Group's intangible assets and depreciation of the Group's tangible assets over their useful lives.  The increase in amortisation and depreciation for the three months ended 30 September 2017 is due to intangible and tangible asset additions since Q1 2016, particularly the non-compete clauses (as defined below).

Transaction related costs 

Transaction related costs consist of legal, professional, due diligence, and special committee fees; other direct costs/fees associated with transactions and acquisitions contemplated or completed; costs associated with the UK strategic review undertaken by the Intertain board of directors; implementing Intertain's UK-centred strategic initiatives; and costs related to corporate structure optimisation.  

Business unit results 

Jackpotjoy 

Q3 2017       Q3 2016       Variance
GBP(millions) GBP(millions) GBP(millions) Variance%
Revenue                       52.2          46.7          5.5           12%
Distribution costs            24.8          20.3          4.5           22%
Administration costs           4.2           3.9          0.3           8%
Adjusted EBITDA[1]            23.2          22.5          0.7           3%

Revenue for the Jackpotjoy segment increased quarter over quarter due to organic growth in all real money brands. Jackpotjoy UK brand revenue accounted for 65% of the Jackpotjoy segment's revenue for the three months ended 30 September 2017.  While there has been steady growth at Jackpotjoy UK and Jackpotjoy Sweden brands, the sharp increase in revenue is due to the substantial growth and progression of the Starspins and Botemania brands. Collectively, they accounted for 23% of the segment's revenue, for the three months ended 30 September 2017.

Selling and marketing costs increased as expected compared to Q3 2016 and prior quarters as a substantial Jackpotjoy UK television campaign was launched in September 2017.  In the three months ended 30 September 2017, compared to the same period in 2016, selling and marketing costs increased by 53%.

Vera&John 

Q3 2017       Q3 2016       Variance
GBP(millions) GBP(millions) GBP(millions) Variance%
Revenue                       18.4          14.4          4.0           28%
Distribution costs             9.1           7.5          1.6           21%
Administration costs           4.4           3.4          1.0           29%
Adjusted EBITDA[1]             4.9           3.5          1.4           40%

Revenue for the Vera&John segment in Q3 2017 increased by 28% compared to Q3 2016 due to organic growth (including new jurisdictions) and GBP to EUR exchange rate movement. On a constant currency basis, revenue increased by 21% from Q3 2016. Distribution costs also increased by 21% in Q3 2017 compared to Q3 2016, as game suppliers and payment providers' costs moved proportionally with revenue. Selling and marketing costs increased by 17%.  

Increases in administration costs for the three months ended 30 September 2017 compared to the same period in 2016, were mainly driven by increases in personnel costs as the segment continues to grow.

Mandalay 

Q3 2017       Q3 2016       Variance
GBP(millions) GBP(millions) GBP(millions) Variance%
Revenue                       4.9           5.3           (0.4)         (8%)
Distribution costs            2.6           3.7           (1.1)         (30%)
Administration costs          0.4           0.2            0.2          100%
Adjusted EBITDA[1]            1.9           1.4            0.5           36%

Revenue for the Mandalay segment for the three months ended 30 September 2017 was 8% lower compared to the prior period in 2016 but due to lower marketing spend, the Adjusted EBITDA[1] was 36% higher.  Operational margins and deposit hold have been improving since the segment focused on changing promotional spend in Q1 2017.  The segment continues to focus on developing a long term strategy to best maximise future growth.

Unallocated Corporate Costs 

Unallocated corporate costs increased from £1.8 million to £3.2 million in the three months ended 30 September 2017 compared to the three months ended 30 September 2016. The variance mainly relates to a £1.0 million increase in compensation due to the addition of new staff and operational bonuses, a £0.3 million increase in general and administrative overhead costs associated with increased headcount and higher travel costs, as well as a £0.2 million increase in professional fees.

Key performance indicators 

Average Active Customers is a key performance indicator used by management to assess real money customer acquisition and real money customer retention efforts of each of the Group's brands. The Group defines Average Active Customers as being real money customers who have placed at least one bet in a given month ("Average Active Customers"). "Average Active Customers per Month" is the Average Active Customers per month, averaged over a twelve-month period. While this measure is not recognised by IFRS, management believes that it is a meaningful indicator of the Group's ability to acquire and retain customers.

Real Money Gaming Revenue and Average Real Money Gaming Revenue per month are key performance indicators used by management to assess revenue earned from real money gaming operations of the business. The Group defines Real Money Gaming Revenue ("Real Money Gaming Revenue") as revenue less revenue earned from the Revenue Guarantee, affiliate websites and social gaming. The Group defines Average Real Money Gaming Revenue per month ("Average Real Money Gaming Revenue per month") as Real Money Gaming Revenue per month, averaged over a twelve-month period. While these measures are not recognised by IFRS, management believes that they are meaningful indicators of the Group's real money gaming operational results.

Monthly Real Money Gaming Revenue per Average Active Customer is a key performance indicator used by management to assess the Group's ability to generate Real Money Gaming Revenue on a per customer basis. The Group defines Monthly Real Money Gaming Revenue per Average Active Customer ("Monthly Real Money Gaming Revenue per Average Active Customer") as being Average Real Money Gaming Revenue per month divided by Average Active Customers per Month. While this measure is not recognised by IFRS, management believes that it is a meaningful indicator of the Group's ability to generate Real Money Gaming Revenue. 

Twelve months Twelve
ended         months ended
30 September  30 September           Variance
2017          2016         Variance  %
Average Active Customers per month (#) 251,186       222,082      29,104    13%
Total Real Money Gaming Revenue
(GBP000's) [(1)]                       271,508       233,514      37,994    16%
Average Real Money Gaming Revenue per
month (GBP000's)                        22,626        19,460       3,166    16%
Monthly Real Money Gaming Revenue per
Average Active Customer (GBP)               90            88           2     2%
[(1)]Total Real Money Gaming Revenue for the twelve months ended 30 September 2017 consists of total revenue less other income earned from the Revenue Guarantee and Platform Migration Revenue of £nil (30 September 2016 - £3.6 million) and revenue earned from affiliate websites and social gaming revenue of £23.5 million (30 September 2016 - £24.1 million).

 

Monthly Real Money Gaming Revenue per Average Active Customer[5] is consistent year over year which is in line with the Group's overall customer acquisition and retention strategy.  

Independent review report to Jackpotjoy plc 

Introduction 

We have been engaged by the company to review the condensed set of financial statements in the interim financial report for the three and nine months ended 30 September 2017 which comprise the Interim Condensed Consolidated Statement of Comprehensive Income, Interim Condensed Consolidated Balance Sheet, Interim Condensed Consolidated Statement of Changes in Equity, Interim Condensed Consolidated Statement of Cash Flows and the related notes.  

We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities 

The interim financial report for the three and nine months ended 30 September 2017 is the responsibility of and has been approved by the directors.  

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board and International Financial Reporting Standards (IFRSs) as adopted by the European Union.  The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, '?Interim Financial Reporting'?, as issued by the  International Accounting Standards Board and International Accounting Standard 34, '?Interim Financial Reporting'?, as adopted by the European Union.

Our responsibility 

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the interim financial report based on our review.

Our report has been prepared in accordance with the terms of our engagement and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

Scope of review 

We conducted our review in accordance with International Standard on Review Engagements 2410, '?Review of Interim Financial Information Performed by the Independent Auditor of the Entity'? as issued by the International Auditing and Assurance Standards Board and  International Standard on Review Engagements (UK and Ireland) 2410, '?Review of Interim Financial Information Performed by the Independent Auditor of the Entity'?, issued by the Financial Reporting Council for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing or International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.

Conclusion 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the three and nine months ended 30 September 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34, as issued by the International Accounting Standards Board and International Accounting Standard 34, as adopted by the European Union.

BDO LLP   
Chartered Accountants   
London 
United Kingdom 
14 November 2017 
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  

Three
months
ended 30
September
2017
(GBP000's)
Revenue and other income
Gaming revenue                                                    75,423
Other income earned from revenue guarantee                        -
Other income earned from platform migration                       -
Total revenue and other income[4]                                 75,423
Costs and expenses
Distribution costs[4],[5]                                         36,448
Administrative costs[5]                                           29,068
Severance costs[4]                                                -
Transaction related costs[4]                                      1,361
Foreign exchange loss[4]                                          4,607
Total costs and expenses                                          71,484
Gain on sale of intangible assets                                 -
Fair value adjustments on contingent consideration[15]            1,663
(Gain)/loss on cross currency swap[10]                            -
Interest income[6]                                                (41)
Interest expense[6]                                               9,648
Financing expenses                                                11,270
Net loss for the period before taxes                              (7,331)
Current tax provision/(recovery)                                  447
Deferred tax recovery                                             (109)
Net loss for the period
attributable to owners of the parent                              (7,669)
Other comprehensive income/(loss):
Items that will or may be reclassified to
profit or loss in subsequent periods
Foreign currency translation gain/(loss)                           10,150
Unrealised loss on cross currency hedge reserve[10]                (2,892)
Total comprehensive loss for the period attributable
to owners of the parent                                            (411)
Net loss for the period per share
Basic[7]                                                           GBP(0.10)
Diluted[7]                                                         GBP(0.10)
See accompanying notes
Three      Nine       Nine
months     months     Months
ended 30   ended 30   ended
September  September  September
2016       2017       2016
(GBP000's) (GBP000's) (GBP000's)
Revenue and other income
Gaming revenue                                             66,368     221,992    193,952
Other income earned from revenue guarantee                 -          -          1,181
Other income earned from platform migration                -          -          925
Total revenue and other income[4]                          66,368     221,992    196,058
Costs and expenses
Distribution costs[4],[5]                                  31,518     101,994    93,669
Administrative costs[5]                                    24,689     81,945     70,050
Severance costs[4]                                         -          -          5,695
Transaction related costs[4]                               10,414     2,676      16,578
Foreign exchange loss[4]                                   591        11,506     3,106
Total costs and expenses                                   67,212     198,121    189,098
Gain on sale of intangible assets                          -          (1,002)    -
Fair value adjustments on contingent consideration[15]     14,549     16,364     33,499
(Gain)/loss on cross currency swap[10]                     (5,693)    3,534      (23,954)
Interest income[6]                                         (63)       (136)      (119)
Interest expense[6]                                        9,173      32,366     25,938
Financing expenses                                         17,966     52,128     35,364
Net loss for the period before taxes                       (18,810)   (27,255)   (28,404)
Current tax provision/(recovery)                           (118)      806        276
Deferred tax recovery                                      (113)      (319)      (295)
Net loss for the period
attributable to owners of the parent                       (18,579)   (27,742)   (28,385)
Other comprehensive income/(loss):
Items that will or may be reclassified to
profit or loss in subsequent periods
Foreign currency translation gain/(loss)                   (1,223)    28,793     (7,886)
Unrealised loss on cross currency hedge reserve[10]         -         (7,737)    -
Total comprehensive loss for the period attributable
to owners of the parent                                    (19,802)   (6,686)    (36,271)
Net loss for the period per share
Basic[7]                                                    GBP(0.26)  GBP(0.38)  GBP(0.40)
Diluted[7]                                                  GBP(0.26)  GBP(0.38)  GBP(0.40)
See accompanying notes

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS 

As at             As at
30 September      31 December
2017              2016
ASSETS                                                   (GBP000's)        (GBP000's)
Current assets
Cash[8]                                                  39,208            68,485
Restricted cash[8]                                       189               253
Customer deposits                                        8,736             8,573
Trade and other receivables[9]                           15,625            16,763
Current portion of cross currency swap[10],[15]          -                 38,171
Taxes receivable                                         9,619             6,832
Total current assets                                     73,377            139,077
Tangible assets                                          1,368             852
Intangible assets[11]                                    308,619           352,473
Goodwill[11]                                             296,334           296,352
Other long-term receivables                              2,169             2,624
Total non-current assets                                 608,490           652,301
Total assets                                             681,867           791,378
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities[12]             12,363            8,992
Current portion of cross currency swap payable [10],[15] 756               -
Other short-term payables[13]                            12,163            15,321
Interest payable                                         547               633
Payable to customers                                     8,736             8,573
Current portion of long-term debt[14]                    24,583            26,695
Current portion of contingent consideration[15]          41,073            86,903
Provision for taxes                                      7,056             7,743
Total current liabilities                                107,277           154,860
Contingent consideration[15]                             6,480             33,284
Other long-term payables[16]                             9,852             14,505
Cross currency swap payable[10],[15]                     6,709             -
Deferred tax liability                                   1,280             1,897
Convertible debentures[17]                               255               3,266
Long-term debt[14]                                       312,634           344,098
Total non-current liabilities                            337,210           397,050
Total liabilities                                        444,487           551,910
Equity
Retained earnings                                        (198,374)         (170,737)
Share capital[17]                                        7,405             7,298
Other reserves                                           428,349           402,907
Total equity                                             237,380           239,468
Total liabilities and equity                             681,867           791,378

  See accompanying notes 

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share-Based
Share      Share     Merger Redeemable     Payment
Capital    Premium    Reserve     Shares     Reserve
(GBP000's) (GBP000's) (GBP000's) (GBP000's)  (GBP000's)
Balance 1
January 2016  7,051      406,002    (15,521)   -          6,779
Comprehensive
loss for the
period:
Net loss for
the period    -          -          -          -          -
Other
comprehensive
loss          -          -          -          -          -
Total
comprehensive
loss for the
period:       -          -          -          -          -
Contributions
by and
distributions
to
shareholders:
Conversion of
debentures[17
]             128        3,689      -          -          -
Exercise of
common share
warrants[17]  4          187        -          -          -
Exercise of
options[17]   55         1,140      -          -          (349)
Share-based
compensation[
17]           -          -          -          -          1,503
Total
contributions
by and
distributions
to
shareholders  187        5,016      -          -          1,154
Balance at 30
September
2016          7,238      411,018    (15,521)   -          7,933
Balance at 1
January 2017  7,298      413,293    (15,521)   50         8,598
Comprehensive
income (loss)
for the
period:
Net loss for
the period    -          -          -          -          -
Other
comprehensive
income (loss) -          -          -          -          -
Total
comprehensive
income (loss)
for the
period        -          -          -          -          -
Contributions
by and
distributions
to
shareholders:
Conversion of
debentures[17
]             92         2,986      -          -          -
Exercise of
options[17]   15         357        -          -          (105)
Cancellation
of redeemable
shares        -          -          -          (50)       -
Share-based
compensation[
17]           -          -          -          -          1,198
Total
contributions
by and
distributions
to
shareholders  107        3,343      -          (50)       1,093
Balance at 30
September
2017          7,405      416,636    (15,521)   -          9,691
See
accompanying
notes
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Cross
Currency   Retained
Translation      Hedge (Deficit)/
Reserve    Reserve   Earnings      Total
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Balance 1
January 2016  14,816      -          (130,094)  289,033
Comprehensive
loss for the
period:
Net loss for
the period    -           -          (28,385)   (28,385)
Other
comprehensive
loss          (7,886)     -          -          (7,886)
Total
comprehensive
loss for the
period:       (7,886)     -          (28,385)   (36,271)
Contributions
by and
distributions
to
shareholders:
Conversion of
debentures[17
]             -           -          -          3,817
Exercise of
common share
warrants[17]  -           -          -          191
Exercise of
options[17]   -           -          349        1,195
Share-based
compensation[
17]           -           -          -          1,503
Total
contributions
by and
distributions
to
shareholders  -           -          349        6,706
Balance at 30
September
2016          6,930       -          (158,130)  259,468
Balance at 1
January 2017  (3,513)     -          (170,737)  239,468
Comprehensive
income (loss)
for the
period:
Net loss for
the period    -           -          (27,742)   (27,742)
Other
comprehensive
income (loss) 28,793      (7,737)    -          21,056
Total
comprehensive
income (loss)
for the
period        28,793      (7,737)    (27,742)   (6,686)
Contributions
by and
distributions
to
shareholders:
Conversion of
debentures[17
]             -           -          -          3,078
Exercise of
options[17]   -           -          105        372
Cancellation
of redeemable
shares        -           -          -          (50)
Share-based
compensation[
17]           -           -          -          1,198
Total
contributions
by and
distributions
to
shareholders  -           -          105        4,598
Balance at 30
September
2017          25,280      (7,737)    (198,374)  237,380
See
accompanying
notes

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

Three          Three
months         months
ended 30       ended 30
September      September
2017           2016
(GBP000's)     (GBP000's)
Operating activities
Net loss for the period                                    (7,669)        (18,579)
Add (deduct) items not involving cash
Amortisation and depreciation                              16,491         14,453
Share-based compensation expense[17]                       320            957
Current tax provision/(recovery)                           447            (118)
Deferred tax recovery                                      (109)          (113)
Interest expense, net[6]                                   9,607          9,110
Gain on sale of intangible assets                          -              -
Fair value adjustments on contingent consideration[15]     1,663          14,549
Realised/unrealised (gain)/loss on cross currency swap[10] -              (5,693)
Foreign exchange loss                                      4,607          591
25,357         15,157
Change in non-cash operating items
Trade and other receivables                                1,311          169
Other long-term receivables                                84             (363)
Accounts payable and accrued liabilities                   2,766          614
Other short-term payables                                  384            857
Cash provided by operating activities                      29,902         16,434
Income taxes paid                                          -              -
Incomes taxes received                                     2,656          1,872
Total cash provided by operating activities                32,558         18,306
Financing activities
Restriction of cash balances                               (229)          -
Proceeds from exercise of warrants                         -              -
Proceeds from exercise of options                          -              1,093
Proceeds from cross currency swap settlement[10]           -              -
Repayment of non-compete liability                         (2,000)        -
Interest repayment                                         (7,903)        (3,228)
Payment of contingent consideration[15]                    -              -
Principal payments made on long-term debt[14]              (5,965)        (4,369)
Total cash used in financing activities                    (16,097)       (6,504)
Investing activities
Purchase of tangible assets                                (88)           (500)
Purchase of intangible assets                              (822)          (374)
Proceeds from sale of intangible assets                    -              -
Total cash used in investing activities                    (910)          (874)
Net increase/(decrease) in cash during the period          15,551         10,928
Cash, beginning of period                                  23,963         51,569
Exchange (loss)/gain on cash and cash equivalents          (306)          (1,641)
Cash, end of period                                        39,208         60,856
See accompanying notes

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

Nine       Nine
months     months
ended 30   ended 30
September  September
2017       2016
(GBP000's) (GBP000's)
Operating activities
Net loss for the period                                    (27,742)   (28,385)
Add (deduct) items not involving cash
Amortisation and depreciation                              46,651     41,559
Share-based compensation expense[17]                       1,198      1,503
Current tax provision/(recovery)                           806        276
Deferred tax recovery                                      (319)      (295)
Interest expense, net[6]                                   32,230     25,819
Gain on sale of intangible assets                          (1,002)    -
Fair value adjustments on contingent consideration[15]     16,364     33,499
Realised/unrealised (gain)/loss on cross currency swap[10] 3,534      (23,954)
Foreign exchange loss                                      11,506     3,106
83,226     53,128
Change in non-cash operating items
Trade and other receivables                                786        4,556
Other long-term receivables                                536        (416)
Accounts payable and accrued liabilities                   922        (414)
Other short-term payables                                  (3,158)    10,824
Cash provided by operating activities                      82,312     67,678
Income taxes paid                                          (6,899)    (6,296)
Incomes taxes received                                     2,758      1,872
Total cash provided by operating activities                78,171     63,254
Financing activities
Restriction of cash balances                               (54)       -
Proceeds from exercise of warrants                         -          191
Proceeds from exercise of options                          372        1,192
Proceeds from cross currency swap settlement[10]           34,373     -
Repayment of non-compete liability                         (3,333)    -
Interest repayment                                         (23,112)   (11,685)
Payment of contingent consideration[15]                    (94,218)   (6,308)
Principal payments made on long-term debt[14]              (18,771)   (18,225)
Total cash used in financing activities                    (104,743)  (34,835)
Investing activities
Purchase of tangible assets                                (851)      (597)
Purchase of intangible assets                              (2,084)    (1,109)
Proceeds from sale of intangible assets                    1,002      -
Total cash used in investing activities                    (1,933)    (1,706)
Net increase/(decrease) in cash during the period          (28,505)   26,713
Cash, beginning of period                                  68,485     31,762
Exchange (loss)/gain on cash and cash equivalents          (772)      2,381
Cash, end of period                                        39,208     60,856
See accompanying notes


 

SUPPLEMENTARY NOTES FOR THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2017 

1. Corporate Information  

Jackpotjoy plc is an online gaming holding company and the parent company of The Intertain Group Limited ("Intertain").  Jackpotjoy plc was incorporated pursuant to the Companies Act 2006 (England and Wales) on 29 July 2016. Jackpotjoy plc's registered office is located at 35 Great St. Helen's, London, United Kingdom. Jackpotjoy plc became the parent company of Intertain on 25 January 2017, following a plan of arrangement transaction involving a one-for-one share exchange of all and the then outstanding common shares of Intertain shares for, at each shareholder's election, ordinary shares of Jackpotjoy plc or exchangeable shares of Intertain.  Unless the context requires otherwise, use of "Group" in these accompanying notes means Jackpotjoy plc and its subsidiaries, as applicable.

The Group currently offers bingo, casino and other games to its customers using the Jackpotjoy, Starspins, Botemania, Vera&John, Costa Bingo, InterCasino, and other brands. The Jackpotjoy, Starspins, and Botemania brands operate off proprietary software owned by the Gamesys group, the Group's B2B software and support provider. The Vera&John and InterCasino brands operate off proprietary software owned by the Group. The Mandalay segment's bingo offerings operate off the Dragonfish platform, a software service provided by the 888 group. Additionally, the Group receives fees for marketing services provided by its affiliate portal business.  

These Unaudited Interim Condensed Consolidated Financial Statements were authorised for issue by the Board of Directors of Jackpotjoy plc (the "Board of Directors") on 14 November 2017.

2. Basis of Preparation  

Basis of presentation  

These Unaudited Interim Condensed Consolidated Financial Statements have been prepared by management on a going concern basis, are presented in compliance with International Accounting Standard ("IAS") 34 - Interim Financial Reporting, and have been prepared on a basis consistent with the accounting policies and methods used and disclosed in Intertain's consolidated financial statements for the year ended 31 December 2016 (the "Annual Financial Statements").  Certain information and disclosures normally included in the Annual Financial Statements prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, which also complies with IFRS as issued by the International Accounting Standards Board, have been omitted or condensed.  

These Unaudited Interim Condensed Consolidated Financial Statements should be read in conjunction with the Annual Financial Statements.  All defined terms used herein are consistent with those terms as defined in the Annual Financial Statements.

These Unaudited Interim Condensed Consolidated Financial Statements have been prepared under the historical cost convention, other than for the measurement at fair value of the Group's cross currency swap and contingent consideration.

Following Jackpotjoy plc becoming the parent company of the group (as detailed in note 1), these Unaudited Interim Condensed Consolidated Financial Statements have been prepared under the merger method of accounting as a continuation of the Intertain business.  This method is commonly applied in such situations as the accounting for such transactions is not prescribed by IFRS 3 - Business Combinations or other applicable IFRS, which instead prompts IFRS-reporting entities to look to alternative generally accepted accounting principles for guidance. The result of the application is to present the Unaudited Interim Condensed Consolidated Financial Statements as if Jackpotjoy plc has always been the parent company and owned all of the subsidiaries, and the comparatives have also been prepared on that basis. The adoption of the merger method of accounting had no impact on reported earnings per share.

The comparative financial information for the year ended 31 December 2016 in these Unaudited Interim Condensed Consolidated Financial Statements does not constitute statutory accounts for that year.  The auditors' report on the statutory accounts for the period ended 31 December 2016 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under sections 498(2) or 498(3) of the Companies Act 2006.

As at 30 September 2017, the Group has consolidated current assets and current liabilities of £73.4 million and £107.3 million, respectively, giving rise to a net current liability of £33.9 million. Cash generated through future operating activities is sufficient to cover the net current liability.  

Basis of consolidation  

Jackpotjoy plc's Unaudited Interim Condensed Consolidated Financial Statements consolidate the parent company and all of its subsidiaries. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. All transactions and balances between companies are eliminated on consolidation.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which Jackpotjoy plc obtains control, and continue to be consolidated until the date that such control ceases.

Intercompany transactions, balances, income and expenses on transactions between Jackpotjoy plc's subsidiaries are eliminated.  Profit and losses resulting from intercompany transactions that are recognised in assets are also eliminated.

3. Summary of Significant Accounting Policies   

For a description of the Group's significant accounting policies, critical accounting estimates and assumptions, and related information see note 3 to the Annual Financial Statements.  Other than what is described below, there have been no changes to the Group's significant accounting policies or critical accounting estimates and assumptions during the nine months ended 30 September 2017.

Change in presentation currency  

Effective from 1 January 2017, the Group changed its presentation currency from Canadian dollars ("CAD" or "$") to pounds sterling ("GBP" or "£").  Comparative information has been restated in pounds sterling in accordance with the guidance defined in IAS 21 - The Effects of Changes in Foreign Exchange Rates. The Q3 2016 Unaudited Interim Condensed Consolidated Financial Statements have been retranslated from Canadian dollars to pounds sterling using the procedures outlined below:

- Income and expenses were translated into pounds sterling at average quarterly rates of exchange ($:£ - 0.5840). Differences resulting from the retranslation on the opening net assets and the results for the year have been taken to reserves; 

- Share capital and other reserves were translated at historic rates prevailing at the dates of transactions;

- Quarterly average exchange rates were used to convert changes in items not involving cash and cash provided by/(used in) operating activities, financing activities, and investing activities.  Spot rates were used to convert cash balances, beginning of period and cash balances, end of period.


As a result of this change, no retranslation movement will be recorded in the Statements of Comprehensive Income for subsidiaries whose functional currency is GBP.  

Hedge accounting 

Effective from 31 March 2017, the Group has elected to use hedge accounting for the purposes of recognising realised and unrealised gains and losses associated with the New Currency Swap (as defined in note 10), in accordance with guidance provided in IAS 39 - Financial Instruments:  Recognition and Measurement.  

IAS 39 permits hedge accounting under certain circumstances provided that the hedging relationship is:

- Formally designated and documented, including the entity's risk management objective and strategy for undertaking the hedge, identification of the hedging instrument, the hedged item, the nature of the risk being hedged, and how the entity will assess the hedging instrument's effectiveness;

- Expected to be highly effective in achieving offsetting changes in fair value or cash flows attributable to the hedged risk as designated and documented, and effectiveness can be reliably measured; and

- Assessed on an ongoing basis and determined to have been highly effective.  


Based on the Group's analysis of the requirements outlined above, it was concluded that the New Currency Swap meets all the necessary criteria and qualifies for use of hedge accounting.

4. Segment Information  


The following tables present selected financial results for each segment and the unallocated corporate costs:

Three months ended 30 September 2017: 

Unallocated
Jackpotjoy Vera&John  Mandalay   Corporate Costs    Total
(GBP000's) (GBP000's) (GBP000's) (GBP000's)         (GBP000's)
Total revenue  52,193     18,355     4,875      -                  75,423
Distribution
costs          24,747     9,094      2,587      20                 36,448
Amortisation
and
depreciation   12,243     2,550      1,604      94                 16,491
Compensation,
professional,
and general
and
administrative
expenses       4,240      4,385      411        3,541              12,577
Transaction
related costs  -          -          -          1,361              1,361
Foreign
exchange       172        130        17         4,288              4,607
Financing, net -          (40)       1          11,309             11,270
Income/(loss)
for the period
before taxes   10,791     2,236      255        (20,613)           (7,331)
Taxes          -          338        -          -                  338
Net
income/(loss)
for the period 10,791     1,898      255        (20,613)           (7,669)
Net
income/(loss)
for the period 10,791     1,898      255        (20,613)           (7,669)
Interest
(income)/expen
se, net        -          (40)       1           9,646             9,607
Taxes          -          338        -           -                 338
Amortisation
and
depreciation   12,243     2,550      1,604       94                16,491
EBITDA         23,034     4,746      1,860       (10,873)          18,767
Share-based
compensation   -          -          -           320               320
Transaction
related costs  -          -          -           1,361             1,361
Fair value
adjustment on
contingent
consideration  -          -          -           1,663             1,663
Foreign
exchange       172        130        17          4,288             4,607
Adjusted
EBITDA         23,206     4,876      1,877       (3,241)           26,718
Net
income/(loss)
for the period 10,791     1,898      255         (20,613)          (7,669)
Share-based
compensation   -          -          -           320               320
Transaction
related costs  -          -          -           1,361             1,361
Fair value
adjustment on
contingent
consideration  -          -          -           1,663             1,663
Foreign
exchange       172        130        17          4,288             4,607
Amortisation
of acquisition
related
purchase price
intangibles
and
non-compete
clauses        12,243     2,190      1,588       -                 16,021
Accretion      -          -          -           2,000             2,000
Adjusted net
income/(loss)  23,206     4,218      1,860       (10,981)          18,303

Nine months ended 30 September 2017: 

Unallocated
Corporate
Jackpotjoy  Vera&John      Mandalay       Costs         Total
(GBP000's) (GBP000's)    (GBP000's)  (GBP000's)    (GBP000's)
Total revenue  155,191       51,458     15,343            -           221,992
Distribution
costs          68,541        25,020     8,355             78          101,994
Amortisation
and
depreciation   34,177        7,383      4,805             286         46,651
Compensation,
professional,
and general
and
administrative
expenses       12,566        12,069     961               9,698       35,294
Transaction
related costs  -             -          -                 2,676       2,676
Foreign
exchange       76            608        26                10,796      11,506
Gain on sale
of intangible
assets         -             (1,002)    -                 -           (1,002)
Financing, net -             (127)      3                 52,252      52,128
Income/(loss)
for the period
before taxes   39,831        7,507      1,193             (75,786)    (27,255)
Taxes          -             487        -                 -           487
Net
income/(loss)
for the period 39,831        7,020      1,193             (75,786)    (27,742)
Net
income/(loss)
for the period 39,831        7,020      1,193             (75,786)     (27,742)
Interest
(income)/expen
se, net        -             (127)      3                 32,354        32,230
Taxes          -              487       -                 -             487
Amortisation
and
depreciation   34,177        7,383      4,805             286           46,651
EBITDA         74,008        14,763     6,001            (43,146)       51,626
Share-based
compensation   -              -         -                 1,198         1,198
Fair value
adjustment on
contingent
consideration  -              -         -                 16,364        16,364
Loss on cross
currency swap  -              -         -                 3,534         3,534
Transaction
related costs  -              -         -                 2,676         2,676
Gain on sale
of intangible
assets         -              (1,002)   -                 -             (1,002)
Foreign
exchange       76             608       26                10,796        11,506
Adjusted
EBITDA         74,084         14,369    6,027             (8,578)       85,902
Net
income/(loss)
for the period 39,831         7,020     1,193             (75,786)      (27,742)
Share-based
compensation   -              -         -                 1,198          1,198
Fair value
adjustment on
contingent
consideration  -              -         -                 16,364         16,364
Loss on cross
currency swap  -              -         -                 3,534          3,534
Transaction
related costs  -              -         -                 2,676          2,676
Gain on sale
of intangible
assets         -              (1,002)   -                 -              (1,002)
Foreign
exchange       76             608       26                10,796         11,506
Amortisation
of acquisition
related
purchase price
intangibles
and
non-compete
clauses        34,177         6,402     4,774             -              45,353
Accretion      -              -         -                 9,051          9,051
Adjusted net
income/(loss)  74,084         13,028    5,993             (32,167)       60,938

Three months ended 30 September 2016: 

Unallocated
Corporate
Jackpotjoy  Vera&John   Mandalay       Costs      Total
(GBP000's) (GBP000's) (GBP000's)  (GBP000's) (GBP000's)
Total revenue and other
income                       46,658     14,422     5,288      -           66,368
Distribution costs           20,315     7,470      3,659      74          31,518
Amortisation and
depreciation                 10,428     2,438      1,585      2           14,453
Compensation, professional,
and general and
administrative expenses      3,876      3,424      264        2,672       10,236
Transaction related costs    -          200        -          10,214      10,414
Foreign exchange             55         343        (34)       227         591
Financing, net               -          (5)        2          17,969      17,966
Income/(loss) for the period
before taxes                 11,984     552        (188)      (31,158)    (18,810)
Taxes                        -          (231)      -          -           (231)
Net income/(loss) for the
period                       11,984     783        (188)      (31,158)    (18,579)

Net income/(loss) for the
period                       11,984   783     (188)   (31,158)  (18,579)
Interest (income)/expense,
net                          -        (5)     2       9,113     9,110
Taxes                        -        (231)   -       -         (231)
Amortisation and
depreciation                 10,428   2,438   1,585   2         14,453
EBITDA                       22,412   2,985   1,399   (22,043)  4,753
Share-based compensation     -        -       -       957       957
Fair value adjustment on
contingent consideration     -        -       -       14,549    14,549
Gain on cross currency swap  -        -       -       (5,693)   (5,693)
Transaction related costs    -        200     -       10,214    10,414
Foreign exchange             55       343     (34)    227       591
Adjusted EBITDA              22,467   3,528   1,365   (1,789)   25,571

Net income/(loss) for the
period                       11,984   783     (188)   (31,158)  (18,579)
Share-based compensation     -        -       -       957       957
Fair value adjustment on
contingent consideration     -        -       -       14,549    14,549
Gain on cross currency swap  -        -       -       (5,693)   (5,693)
Transaction related costs    -        200     -       10,214    10,414
Foreign exchange             55       343     (34)    227       591
Amortisation of acquisition
related
purchase price intangibles   10,428   2,275   1,585   -         14,288
Accretion                    -        -       -       4,650     4,650
Adjusted net income/(loss)   22,467   3,601   1,363   (6,254)   21,177

Nine months ended 30 September 2016:  

Unallocated
Jackpotjoy Vera&John     Mandalay      Corporate Costs     Total
(GBP000's) (GBP000's)    (GBP000's)    (GBP000's)          (GBP000's)
Total revenue
and other
income        135,645    43,857       16,556        -                   196,058
Distribution
costs         61,242     21,427       10,773        227                 93,669
Amortisation
and
depreciation  30,912     6,308        4,328         11                  41,559
Compensation,
professional,
and general
and
administrativ
e expenses    11,505     8,618        825           7,543               28,491
Severance
costs         -          -            -             5,695               5,695
Transaction
related costs -          642          -             15,936              16,578
Foreign
exchange      (278)      636          (102)         2,850               3,106
Financing,
net           -          (48)         5             35,407              35,364
Income/(loss)
for the
period before
taxes         32,264     6,274        727           (67,669)            (28,404)
Taxes         -          (19)         -             -                   (19)
Net
income/(loss)
for the
period        32,264     6,293        727           (67,669)            (28,385)

Unallocated
Jackpotjoy  Vera&John   Mandalay  Corporate
Costs      Total
(GBP000's) (GBP000's)  (GBP000's)(GBP000's) (GBP000's)
Net income/(loss) for the
period                       32,264   6,293       727     (67,669)  (28,385)
Interest (income)/expense,
net                          -        (48)        5       25,862    25,819
Taxes                        -        (19)        -       -         (19)
Amortisation and
depreciation                 30,912   6,308       4,328   11        41,559
EBITDA                       63,176   12,534      5,060   (41,796)  38,974
Share-based compensation     -        -           -       1,503     1,503
Severance costs              -        -           -       5,695     5,695
Independent Committee
related expenses             -        -           -       1,693     1,693
Fair value adjustment on
contingent consideration     -        -           -       33,499    33,499
Gain on cross currency swap  -        -           -       (23,954)  (23,954)
Transaction related costs    -        642         -       15,936    16,578
Foreign exchange             (278)    636         (102)   2,850     3,106
Adjusted EBITDA              62,898   13,812      4,958   (4,574)   77,094

Net income/(loss) for the
period                       32,264   6,293       727    (67,669) (28,385)
Share-based compensation     -        -           -      1,503    1,503
Severance costs              -        -           -      5,695    5,695
Independent Committee
related expenses             -        -           -      1,693    1,693
Fair value adjustment on
contingent consideration     -        -           -      33,499   33,499
Gain on cross currency swap  -        -           -      (23,954) (23,954)
Transaction related costs    -        642         -      15,936   16,578
Foreign exchange             (278)    636         (102)  2,850    3,106
Amortisation of acquisition
related purchase price
intangibles                  30,912   5,925       4,328  -        41,165
Accretion                    -        -           -      12,845   12,845
Adjusted net income/(loss)   62,898   13,496      4,953  (17,602) 63,745

The following table presents net assets per segment and unallocated corporate costs as at 30 September 2017:

Unallocated
Corporate
Jackpotjoy Vera&John  Mandalay   Costs       Total
(GBP000's) (GBP000's) (GBP000's) (GBP000's)  (GBP000's)
Current assets        13,171     34,800     6,747      18,659      73,377
Goodwill              224,348    55,374     16,612     -           296,334
Long-term assets      265,222    33,414     13,425     95          312,156
Total assets          502,741    123,588    36,784     18,754      681,867
Current liabilities   6,360      17,896     1,824      81,197      107,277
Long-term liabilities -          1,280      -          335,930     337,210
Total liabilities     6,360      19,176     1,824      417,127     444,487
Net assets            496,381    104,412    34,960     (398,373)   237,380

The following table presents net assets per segment and unallocated corporate costs as at 31 December 2016:

Unallocated
Corporate
Jackpotjoy Vera&John  Mandalay   Costs       Total
(GBP000's) (GBP000's) (GBP000's) (GBP000's)  (GBP000's)
Current assets        15,033     38,870     6,509      78,665      139,077
Goodwill              224,348    55,392     16,612     -           296,352
Long-term assets      277,702    38,163     18,020     22,064      355,949
Total assets          517,083    132,425    41,141     100,729     791,378
Current liabilities   5,790      16,711     1,483      130,876     154,860
Long-term liabilities -          1,897      -          395,153     397,050
Total liabilities     5,790      18,608     1,483      526,029     551,910
Net assets            511,293    113,817    39,658     (425,300)   239,468

During the nine months ended 30 September 2017 and 2016, substantially all of the revenue earned by the Group was in Europe. Non-current assets by geographical location as at 30 September 2017 were as follows: Europe £88.8 million (31 December 2016 - £93.6 million) and the Americas £519.7 million (31 December 2016 - £558.7 million).

5. Costs and Expenses 

Three Months  Three Months Nine Months   Nine Months
Ended         Ended        Ended         Ended
30 September  30 September 30 September  30 September
2017          2016         2017          2016
(GBP000's)    (GBP000's)   (GBP000's)    (GBP000's)
Distribution costs:
Selling and marketing          12,591        10,796       33,040        32,362
Licensing fees                 11,771        10,510       34,683        31,148
Gaming taxes                   8,742         7,334        25,203        21,498
Processing fees                3,344         2,878        9,068         8,661
36,448        31,518       101,994       93,669
Administrative costs:
Compensation and benefits      9,631         7,840        25,722        20,641
Professional fees              670           476          2,675         3,294
General and administrative     2,276         1,920        6,897         4,556
Tangible asset depreciation    119           51           303           105
Intangible asset amortisation  16,372        14,402       46,348        41,454
29,068        24,689       81,945        70,050

6. Interest Income/Expense 

Three Months  Three Months Nine Months   Nine Months
Ended         Ended        Ended         Ended
30 September  30 September 30 September  30 September
2017          2016         2017          2016
(GBP000's)    (GBP000's)   (GBP000's)    (GBP000's)
Interest earned on cash held
during the period                 41           63           136          119
Total interest income             41           63           136          119
Interest paid and accrued on
long-term debt                    7,645        4,400        23,309       12,743
Accretion of discount recognised
on contingent consideration       752          4,049        5,220        11,197
Interest paid and accrued on
convertible debentures              3            123           43           350
Interest accretion recognised on
convertible debentures              5            106           35           290
Interest accretion recognised on
long-term debt                    774            495        2,334         1,358
Interest accretion recognised on
other long-term liabilities       469          -            1,425        -
Total interest expense            9,648        9,173        32,366       25,938

7. Earnings per Share 

The following table presents the calculation of basic and diluted earnings per share:

Three Months Three Months Nine Months  Nine Months
Ended        Ended        Ended        Ended
30 September 30 September 30 September 30 September
2017         2016         2017         2016
(GBP000's)   (GBP000's)   (GBP000's)   (GBP000's)
Numerator:
Net loss - basic            (7,669)      (18,579)     (27,742)     (28,385)
Net loss - diluted[1]       (7,669)      (18,579)     (27,742)     (28,385)
Denominator:
Weighted average number of
shares outstanding - basic  73,988       70,865       73,801       70,666
Instruments, which are
anti-dilutive:
Weighted average effect of
dilutive share options      434          801          412            833
Weighted average effect of
convertible debentures[2]   87           2,629        294          2,759
Net loss per share[3],[4]
Basic                       GBP(0.10)    GBP(0.26)    GBP(0.38)    GBP(0.40)
Diluted[1]                  GBP(0.10)    GBP(0.26)    GBP(0.38)    GBP(0.40)

[1]    In the case of a net loss, the effect of share options potentially exercisable on diluted loss per share will be anti-dilutive; therefore, basic and diluted net loss per share will be the same.

[2]    An assumed conversion of convertible debentures had an anti-dilutive effect on loss per share for the three and nine months ended 30 September 2017 and 30 September 2016.

[3]    Basic loss per share is calculated by dividing the net loss attributable to common shareholders by the weighted average number of shares outstanding during the year.

[4]    Diluted loss per share is calculated by dividing the net loss attributable to ordinary shareholders by the weighted average number of shares outstanding during the period and adjusted for the number of potentially dilutive share options and contingently issuable instruments.

8. Cash and Restricted Cash 

30 September 2017 31 December 2016
(GBP000's)        (GBP000's)
Cash                                               38,994            33,558
Segregated cash*                                      214            34,927
Cash and cash equivalents                          39,208            68,485
Restricted cash - other                               189               253
Total cash balances                                39,397            68,738

*   This balance consists of cash on deposit with payment service providers, as well as segregated funds held in accordance with the terms of the Jackpotjoy earn-out payment, where the Group was required to segregate 90% of its excess cash flow, less mandatory repayments of the Group's long-term debt and earn-out payments, in a non-operational bank account.  Since the Group made a final earn-out payment of £94.2 million for the non-Spanish assets of the Jackpotjoy segment on 21 June 2017, no cash was required to be segregated for this purpose at 30 September 2017 (£34.7 million as at 31 December 2016).  Segregated cash does not qualify as restricted cash and, as such, it is included in cash. 

9. Trade and Other Receivables 


Receivables consist of the following items:

30 September 2017 31 December 2016
(GBP000's)        (GBP000's)
Due from the Gamesys group                         6,289             9,242
Due from the 888 group                             2,650             1,625
Affiliate revenue receivable                       2,178             1,766
Short-term loans receivable                          659               572
Swap-related receivable                            -                 1,948
Prepaid expenses                                   3,548               967
Other                                                301               643
15,625            16,763

10. Cross Currency Swap


On 23 November 2015, the Group entered into a cross currency swap agreement (the "Currency Swap") in order to minimise the Group's exposure to exchange rate fluctuations between GBP and the US dollar ("USD") as cash generated from the Group's operations is largely in GBP, while a portion of the principal and interest payments on the Group's credit facilities are in USD. Under the Currency Swap, 90% of the Group's USD term loan interest and principal payments were swapped into GBP. The Group paid a fixed 7.81% interest in place of floating USD interest payments of LIBOR plus 6.5% (LIBOR floor of 1%). The interest and principal payments were made at a GBP/USD foreign exchange rate of 1.5135 on a USD notional amount of $293,962,500.

On 28 March 2017, the Group terminated the Currency Swap and realised total proceeds of approximately USD 42.6 million (£34.4 million) and subsequently entered into a new cross currency swap agreement (the "New Currency Swap"). Under the New Currency Swap, 50% of the Group's term loan interest and principal payments will be swapped into GBP. The Group will pay a fixed 7.4% interest in place of floating USD interest payments of LIBOR plus 6.5% (LIBOR floor of 1%). The interest and principal payments will be made at a GBP/USD foreign exchange rate of 1.2584 on a USD notional amount of $136,768,333. The New Currency Swap expires on 30 September 2019.  The agreement was entered into at no cost to the Group.

The fair value of the New Currency Swap liability as at 30 September 2017 is £7.5 million (31 December 2016 - asset of £38.2 million).

Jackpotjoy plc has elected to use hedge accounting for the purposes of recognising realised and unrealised gains and losses associated with the New Currency Swap.

11. Intangible Assets and Goodwill 

As at 30 September 2017  

Customer
Gaming     Relationsh
Licenses   ips        Software   Brand
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Cost
Balance, 1 January 2017    94         340,927    21,670     70,054
Additions                  -          -          1,989      -
Translation                (1)            292      592        (110)
Balance, 30 September 2017 93         341,219    24,251     69,944
Accumulated amortisation
Balance, 1 January 2017    34         96,811     7,414      6,523
Amortisation               11         33,801     3,576      2,628
Translation                6              51       241        (30)
Balance, 30 September 2017 51         130,663    11,231      9,121
Carrying value
Balance, 30 September 2017 42         210,556    13,020     60,823
Partnership Non-Compete
Agreements  Clauses     Goodwill   Total
(GBP000's)  (GBP000's)  (GBP000's) (GBP000's)
Cost
Balance, 1 January 2017    12,900      20,434      317,829    783,908
Additions                  -           -           -          1,989
Translation                -           -           (1,715)    (942)
Balance, 30 September 2017 12,900      20,434      316,114    784,955
Accumulated amortisation
Balance, 1 January 2017    2,824       -           21,477     135,083
Amortisation               1,225       5,107       -          46,348
Translation                -           -           (1,697)    (1,429)
Balance, 30 September 2017 4,049       5,107       19,780     180,002
Carrying value
Balance, 30 September 2017 8,851       15,327      296,334    604,953

As at 31 December 2016 

Customer
Gaming     Relationsh            Revenue
Licenses   ips        Software   Guarantee
(GBP000's) (GBP000's) (GBP000's) (GBP000's)
Cost
Balance, 1 January 2016   76         337,502    17,175      4,010
Additions                 -          -          1,836      -
Translation               18         3,425      2,659         783
Expiry                    -          -          -          (4,793)
Balance, 31 December 2016 94         340,927    21,670     -
Accumulated amortisation
Balance, 1 January 2016   23         47,956     3,279      -
Amortisation              9          47,405     3,683      -
Translation               2          1,450        452      -
Balance, 31 December 2016 34         96,811     7,414      -
Carrying value
Balance, 31 December 2016 60         244,116    14,256     -
Partnership Non-Compete
Brand      Agreements  Clauses     Goodwill   Total
(GBP000's) (GBP000's) (GBP000's) (GBP000's) (GBP000's)
Cost
Balance, 1 January 2016   68,284     12,900      -           306,295    746,242
Additions                 -          -           20,434      -          22,270
Translation               1,770      -           -           11,534     20,189
Expiry                    -          -           -           -          (4,793)
Balance, 31 December 2016 70,054     12,900      20,434      317,829    783,908
Accumulated amortisation
Balance, 1 January 2016   2,681      1,558       -           17,969     73,466
Amortisation              3,466      1,232       -           -          55,795
Translation                 376         34          -         3,508      5,822
Balance, 31 December 2016 6,523      2,824       -           21,477     135,083
Carrying value
Balance, 31 December 2016 63,531     10,076      20,434      296,352    648,825

12.  Accounts Payable and Accrued Liabilities 

Accounts payable and accrued liabilities consist of the following items:

30 September
2017           31 December 2016
(GBP000's)     (GBP000's)
Affiliate/marketing expenses payable                    5,112          3,058
Payable to game suppliers                               1,512            950
Compensation payable                                    2,949          2,989
Loyalty program payable                                   252            260
Professional fees                                         730            349
Gaming tax payable                                        416            526
Other                                                   1,392            860
12,363          8,992

13.  Other Short-Term Payables 

Other short-term payables consist of:

30 September     31 December
2017             2016
(GBP000's)       (GBP000's)
Transaction related payables                           3,496            9,321
Current portion of other long-term payables (Note 16)  8,667            6,000
12,163           15,321

14.  Credit Facilities  

Below is the breakdown of the First Lien Facilities and the Second Lien Facility:

Incremental
First Lien   Second Lien
Term Loan  Facility     Facility    Total
(GBP000's) (GBP000's)   (GBP000's)  (GBP000's)
Balance, 1 January 2016                207,158    -            -           207,158
Principal                              -          70,000       90,000      160,000
Repayment                              (26,906)   -            -           (26,906)
Debt financing costs                   -          (2,482)      (6,792)     (9,274)
Accretion[1]                           1,868      16           35          1,919
Foreign exchange translation           37,896     -            -           37,896
Balance, 31 December 2016              220,016    67,534       83,243      370,793
Repayment                              (18,771)   -            -           (18,771)
Accretion[1]                           1,424      290          620         2,334
Foreign exchange translation           (17,139)   -            -           (17,139)
Balance, 30 September 2017             185,530    67,824       83,863      337,217
Current portion                        24,583     -            -           24,583
Non-current portion                    160,947    67,824       83,863      312,634

[1] Effective interest rates are as follows:  Term Loan - 8.69%, Incremental First Lien Facility - 8.32%, Second Lien Facility - 11.75%.

15.  Financial Instruments 

The principal financial instruments used by the Group are summarised below:

Financial assets 

Loans and receivables
30 September     31 December
2017             2016
(GBP000's)       (GBP000's)
Cash and restricted cash                              39,397           68,738
Trade and other receivables                           15,625           16,763
Other long-term receivables                            2,169            2,624
Customer deposits                                      8,736            8,573
65,927           96,698

Financial liabilities 

Financial liabilities at
amortised cost
30 September
2017            31 December 2016
(GBP000's)      (GBP000's)
Accounts payable and accrued liabilities               12,363           8,992
Other long-term payables                                9,852          14,505
Other short-term payables                              12,163          15,321
Interest payable                                          547             633
Payable to customers                                    8,736           8,573
Convertible debentures                                    255           3,266
Long-term debt                                        337,217         370,793
381,133         422,083

The carrying values of the financial instruments noted above, with the exception of convertible debentures, approximate their fair values. The convertible debentures' fair value as at 30 September 2017 amounted to £0.5 million. Fair value was determined based on a quoted market price in an active market.

Other financial instruments 

Financial instruments recognised at
fair value through profit or loss -
assets (liabilities)
30 September 2017  31 December 2016
(GBP000's)         (GBP000's)
Cross currency swap                             (7,465)             38,171
Contingent consideration                       (47,553)           (120,187)
(55,018)           (82,016)

Fair value hierarchy 

The hierarchy of the Group's financial instruments carried at fair value is as follows:  

Level 2                        Level 3
30 September    31 December       30 September   31 December
2017            2016              2017           2016
(GBP000's)      (GBP000's)       (GBP000's)     (GBP000's)
Cross currency swap   (7,465)         38,171           -              -
Contingent
consideration         -               -                (47,553)       (120,187)

The cross currency swap balance represents the fair value of cash inflows/(outflows) under the Currency Swap or the New Currency Swap, as applicable.

Contingent consideration represents the fair value of the cash outflows under earn-out agreements that would result from the performance of acquired businesses.  The key inputs into the fair value estimation of these liabilities include the forecast performance of the underlying businesses, the probability of achieving forecasted results and the discount rate applied in deriving a present value from those forecasts. Significant increase (decrease) in the business' performance would result in a higher (lower) fair value of the contingent consideration, while significant increase (decrease) in the discount rate would result in a lower (higher) fair value of the contingent consideration.  Additionally, as earn-out periods draw closer to their completion, the range of probability factors will decrease.  

A discounted cash flow valuation model was used to determine the value of the contingent consideration.  The model considers the present value of the expected payments, discounted using a risk-adjusted discount rate of 7%. The expected payments are determined by considering the possible scenarios of forecast EBITDA, the amount to be paid under each scenario and the probability of each scenario. 

Without probability and discount factors, the fair value of the contingent consideration would be approximately 25% higher (£12.1 million), than its value at 30 September 2017, increasing the current portion of the contingent consideration, which is composed of the Botemania earn-out payment and the first Jackpotjoy milestone payment, by £8.6 million and increasing the long-term contingent consideration, which is composed of the final Jackpotjoy milestone payments due in 2019 and 2020, by £3.5 million. This assumes that the financial performance of the Jackpotjoy operating segment remains in line with management's expectations.  

On 21 June 2017, Jackpotjoy plc made a final earn-out payment in the amount of £94.2 million for the non-Spanish assets within its Jackpotjoy segment.  

As at 30 September 2017, the contingent consideration balance related to the earn-out payment remaining on the Spanish assets included in the Jackpotjoy segment and milestone payments related to the Jackpotjoy segment.

The movement in Level 3 financial instruments is detailed below:

(GBP000's)
Contingent consideration, 1 January 2016                              209,625
Addition                                                             -
Fair value adjustments                                                 49,382
Payments                                                             (156,308)
Accretion of discount                                                  15,545
Foreign exchange translation                                            1,943
Contingent consideration, 31 December 2016                            120,187
Fair value adjustments                                                 16,364
Payments                                                              (94,218)
Accretion of discount                                                   5,220
Contingent consideration, 30 September 2017                            47,553

Current portion                                                        41,073
Non-current portion                                                     6,480

16.  Other Long-Term Payables 

The Group is required to pay the Gamesys group £24.0 million in equal monthly instalments in arrears over the period from April 2017 to April 2020, for additional non-compete clauses that came into effect in April 2017 and that expire in March 2019.  The Group has included £8.7 million of this payable in current liabilities (note 13), with the discounted value of the remaining balance, being £9.9 million, included in other long-term payables.  During the nine months ended 30 September 2017, the Group has paid a total of £3.3 million in relation to the additional non-compete clauses.

17.  Share Capital  

As at 30 September 2017, Jackpotjoy plc's issued share capital consisted of 74,052,431 ordinary shares, each with a nominal value of £0.10.  Jackpotjoy plc does not hold any shares in treasury and there are no shares in Jackpotjoy plc's issued share capital that do not represent capital.

The share capital movements presented below for periods prior to the date of completion of the plan of arrangement discussed in note 1 are presented as if each common share of The Intertain Group Limited had the same nominal value as the ordinary shares of Jackpotjoy plc.  The number of Jackpotjoy plc ordinary shares in issue at the date of the plan of arrangement was 73,718,942.

Ordinary shares
(GBP000's)                #
Balance, 1 January 2016                               7,051           70,511,493
Conversion of convertible debentures, net of costs      185            1,853,667
Exercise of options                                      58              577,492
Exercise of warrants                                      4               40,625
Balance, 31 December 2016                             7,298           72,983,277
Conversion of convertible debentures, net of costs       92              916,498
Exercise of options                                      15              152,656
Balance, 30 September 2017                            7,405           74,052,431

Ordinary shares 

Other than for reasons set out below, during the nine months ended 30 September 2017, Jackpotjoy plc did not issue any additional ordinary shares.

Convertible debentures  

During the nine months ended 30 September 2017 (and prior to completion of the plan of arrangement), debentures at an undiscounted value of £2.3 million were converted into 628,333 common shares of Intertain.  Additionally, during the nine months ended 30 September 2017 (and following the completion of the plan of arrangement), debentures at an undiscounted value of £1.0 million were converted into 288,165 ordinary shares of Jackpotjoy plc.

Share options  

The share option plan (the "Share Option Plan") was approved by the Board of Directors on                            5 September 2016. Upon completion of the plan of arrangement, all options over common shares of Intertain under Intertain's stock option plan were automatically exchanged for options of equivalent value over ordinary shares of Jackpotjoy plc on equivalent terms and subject to the same vesting conditions under Intertain's share option plan.  The strike price of each grant has been converted from Canadian dollars to pound sterling at the foreign exchange rate of 0.606, being the exchange rate at the date of the plan of arrangement. Following the grant of the replacement options, no further options were, or will be, granted under the Share Option Plan.

During the nine months ended 30 September 2017, nil stock options were granted, 152,656 stock options were exercised, 13,000 stock options were forfeited, and nil stock options expired.

During the three and nine months ended 30 September 2017, the Group recorded £0.3 million and £1.2 million, respectively (2016 - £1.0 million and £1.5 million, respectively) in share-based compensation expense with a corresponding increase in share-based payment reserve.

Long-term incentive plan 

On 24 May 2017, Jackpotjoy plc granted awards over ordinary shares under the Group's long-term incentive plan ("LTIP") for key management personnel.  The awards (i) will vest on the date on which the Board of Directors determines the extent to which the performance condition (as described below) has been satisfied, and (ii) are subject to a holding period of two years beginning on the vesting date, following the end of which they will be released so that the shares can be acquired.

The performance condition as it applies to 50% of each award is based on the Group's total shareholder return compared with the total shareholder return of the companies constituting the Financial Times Stock Exchange 250 index (excluding investment trusts and financial services companies) over three years commencing on 25 January 2017 ("TSR Tranche"). The performance condition as it applies to the remaining 50% of the award is based on the Group's earnings per share ("EPS") in the last financial year of that performance period ("EPS Tranche") and vests as to 25% if final year EPS is 133.5 pence, between 25% and 100% (on a straight-line basis) if final year EPS is more than 133.5 pence but less than 160 pence, and 100% if final year EPS is 160 pence or more.

Each award under the LTIP is equity-settled and LTIP compensation expense is based on the award's estimated fair value.  The fair value has been estimated using the Black-Scholes model for the EPS Tranche and the Monte Carlo model for the TSR Tranche.

During the three and nine months ended 30 September 2017, the Group recorded £0.1 million (2016 - £nil) in LTIP compensation expense with a corresponding increase in share-based payment reserve.

18.  Contingent Liabilities 

Indirect taxation 

Jackpotjoy plc companies may be subject to indirect taxation on transactions that have been treated as exempt supplies of gambling, or on supplies that have been zero rated where legislation provides that the services are received or used and enjoyed in the country where the service provider is located. Revenues earned from customers located in any particular jurisdiction may give rise to further taxes in that jurisdiction. If such taxes are levied, either on the basis of current law or the current practice of any tax authority, or by reason of a change in the law or practice, then this may have a material adverse effect on the amount of tax payable by the Group or on its financial position. Where it is considered probable that a previously identified contingent liability will give rise to an actual outflow of funds, then a provision is made in respect of the relevant jurisdiction and period impacted. Where the likelihood of a liability arising is considered remote, or the possible contingency is not material to the financial position of the Group, the contingency is not recognised as a liability at the balance sheet date.  As at 30 September 2017, the Group had recognised £nil liability (31 December 2016 - £nil) related to potential contingent indirect taxation liabilities.


Enquiries

Jackpotjoy plc 
Jason Holden
Director of Investor Relations 
jholden@jackpotjoyplc.com
+44(0)207-016-9866
+44(0)7812-142118 

Jackpotjoy Group
Amanda Brewer
Vice President of Corporate Communications 
amanda.brewer@jackpotjoygroup.com
+1-416-720-8150 

Media Enquires
Finsbury
James Leviton, Andy Parnis   
jackpotjoy@finsbury.com
+44(0)207-251-3801

--------------------------------

[1] This release contains non-IFRS financial measures, which are noted where used. For additional details, including with respect to the reconciliations from these non-IFRS financial measures, please refer to the information under the heading ?Note Regarding Non-IFRS Measures? on page 4 of this release and Note 4 ? Segment Information of the unaudited interim condensed consolidated financial statements on pages 19 through 23 of this release.
[2] Per share figures are calculated on a diluted weighted average basis using the IFRS treasury method.
[3] Adjusted net debt consists of existing term loan, convertible debentures, incremental bond issuance, non-compete clause payout, contingent consideration liability and the fair value of the currency swap less non-restricted cash.
[4] Adjusted net leverage ratio consists of existing term loan, convertible debentures, incremental bond issuance, non-compete clause payout, contingent consideration liability and the fair value of the currency swap less non-restricted cash divided by LTM to 30 September 2017 Adjusted EBITDA of £111.0 million.
[5] For additional details, please refer to the information under the heading ?Key performance indicators? on pages 9 and 10 of this release.


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