RNS Number : 2309K
DJI Holdings PLC
15 April 2015
 

15 April 2015

 

 

DJI Holdings plc

 

Trading Statement

 

DJI Holdings plc, (AIM: DJI), a licensed promoter and distributor of Chinese sports and welfare lottery products to third party retailers and direct to consumers, provides the following update on trading ahead of the release of its audited results for the year ended 31 December 2014 ("FY2014").

 

During 2014 the Group continued to show strong revenue growth year-on-year.  While the Company expects growth in gross sales to be significantly higher than market expectations, as a result of delays in the recognition of significant fee and bonus revenues related to work performed in FY2014 and higher than anticipated commissions paid, adjusted Operating EBITDA ("EBITDA") for the fourth quarter is expected to be materially lower than anticipated.  As a consequence, the Company expects the results for the financial year ended 31 December 2014 to fall below market expectations.

We have been advised by certain of our partners that they are unable to complete our fee and bonus arrangements until the Chinese government's temporary suspension of online lottery sales has ended.  While the Company has performed the requisite services to consider the revenues earned in 2014 and incurred the associated costs, there is an absence of certainty regarding the outcome of current payment negotiations.  In the interest of timely reporting of our financial results for the year, the Board has taken the decision to account for this revenue as and when the current payment negotiations are completed.  

Based on preliminary internal financial information assembled to date, which remains subject to independent audit, the Company's gross sales, revenue and gross margin increased to £642m, £13.6m and £7.2m respectively compared with £22m, £1.1m and £1.0m in FY2013.

In addition, the Company incurred higher than anticipated commission fees in the fourth quarter of FY2014 totalling a further £1.0m. As a result of the reduced fee and bonus revenues and the increased commission fees the Company will report an EBITDA loss in FY2014.

Nonetheless, the Company expects to report a year-on-year improvement in EBITDA for FY2014 of between £5.0m and £5.5m, as a result of a profitable second half.  Prior to the suspension of online lottery sales, the Board was confident in the trajectory for FY2015 and, assuming this trading resumes in the near future, the Company remains confident in its FY2015 outlook.

The Board expects to announce results for FY2014 during the first half of May 2015.

Commenting on the Trading Statement, Darren Mercer, Chief Executive Officer of DJI Holdings PLC, said:

 

"DJI's long term objective remains to be a leading player in this industry and we believe we are well positioned to succeed through our relationships with substantial trading partners and relevant authorities. The Company has a strong pipeline of revenue opportunities based on expanding its channels to market and providing new content and we look forward to the remainder of 2015 with confidence."

 

For further information please contact:

 

DJI Holdings plc 

+44 (0) 1565 872990

Darren Mercer, Group Chief Executive

Rodney Davis, Chief Financial Officer




IHA Consulting

+44 (0) 20 3393 1185

Stephen Benzikie




Canaccord Genuity Limited (Nominated Advisor)

+44 (0) 20 7523 8000 

Simon Bridges / Cameron Duncan






 

 

Note to editors

 

DJI's strategy is to capitalise on the rapidly expanding Chinese lottery market and the opportunity to deliver lottery ticket fulfilment sales to its substantial client base of large Chinese corporations (B2B) and individual consumers via the Group's owned and operated websites (B2C), within the online and mobile environment.

 

Through the Group's long-standing relationships with the Chinese regulators, portfolio of lottery contracts and reliable technology platform, the Group is well-positioned to capture the market opportunity.

 

The principal activities of the Group are the development, promotion and distribution of authorised lottery products in China. DJI's subsidiaries are licensed and/or contractually authorised to distribute and promote Sports and Welfare lottery products online, via mobile and through physical retail outlets across China.

 

The Group has a differentiated approach to the Chinese lottery market in that DJI operates throughout the promotion and distribution value chain. The Group offers:

·     front-end lottery ticket sales via websites owned and operated by the Group, third party websites, mobile applications and physical retail outlets

·     back-office lottery ticket fulfilment services to large online and offline lottery partners

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
TSTSFFEFLFISEFL