Excessive debt and massive bingo sector write-downs have reportedly resulted in a poor performance from the UK online and land gambling group Gala Coral.
This Is Money reports that the group has dived £188 million into the red in its first results after an extensive restructuring. Group sales of £1.2 billion in the year ending September 25, 2010 were achieved, but a £123 million hit due to a revaluation of assets and a further £54 million in restructuring costs meant that operating profit was only £105 million.and that was subsequently wiped out by £306 million in interest costs.
However the 2010 figures are an improvement on the £495 million loss the group suffered in the preceding year.
The Board say that business has been hit most by a reduction in general (consumer) spending, 'be this stake per slip in Coral, spend per head in bingo or drop per head in casinos'.
In a more positive development, the company was successful in achieving a £70 million refund for overpaid VAT on its bingo and slot machines.
Last year the company finally completed a lengthy refinancing which saw its private equity owners wiped out, losing £670 million, and control pass to the company's debt-holders, led by American firm Apollo Management. In the process, Gala cut its debt by £350 million to £2.2 billion.
The group is understood to be on the short list for purchase of remains of the UK state-owned bookmaker, the Tote.
Source: InfoPowa News