Gala Coral, the gambling giant behind Gala Bingo, has released its financial results for the 12 week period ending 24th September 2011. Again the financials will cause further concern to investors and shows that Gala is far from the best bet in the sector.

Key financials results for the quarter included:

• Turnover of £249.0 million, 3% below last year, excluding the accounting effect of the removal of prize bingo.

• Group EBITDA (pre-exceptionals) of £55.0 million was £14.7 million lower than the prior year, mainly due to poor sports betting results in the quarter (against favourable results last year) and increased costs including VAT.

• The cash inflow for the quarter was £5.3 million, including the payment of £5.9 million in refinancing costs (total refinancing fees for the year were £41.0 million), £31.4 million to acquire fixed assets, which included the acquisition of two bingo clubs and a chain of thirty-one LBOs in the north-west of England, and receipt of £10.7 million from the sale of fixed assets.

• An impairment charge of £550.0 million against historic goodwill resulted in an operating loss of £537.8m (2010: £50.3m). This impairment represents a non-cash adjustment to the carrying value of intangible assets and does not have an impact on financial covenants.

• Continued positive trading momentum across all businesses, with encouraging trends carrying through into the start of the 2012 financial year.

In relation to the Gala Bingo operations the company suggested spend per head was two percent higher on flat admissions. Overall gross profit was 4% higher than the previous year. Bonus accruals and other costs saw a 4th quarter EBITDA £1.9m below last year. The company acquired two new bingo clubs which are expected to contribute to growth in 2012.

Coral saw over the counter (CTC) staked amounts 3% up overall and 1% up on like for like basis. Margins were 14.9% lower than the long term average and 2.3% compared to the 4th quarter of the previous year resulting in a grow win decline of 11% on the previous year. Increases in costs, which included VAT saw a decline of £11.6 million compared to the previous year.

Turnover in remote gambling continued to decline in comparison to the previous years, although recent trends were more positive. Increased margins and costs resulted in growth of EBITDA of 16% on same period in 2010. The company suggested “Remote remains limited by uncompetitive technology, although trends in active customers were materially improved in H2. The project to re-platform all websites onto Playtech software is well progressed, with a re-launch of the new sites planned for spring and summer of 2012.”

The casino division followed a change of strategy focusing on higher value players in the second half of the year resulting in drop per head growing by 9%, with cash drop 2% up. Margins of 17.1% saw year on year gross wins increasing by 6% in the quarter. Increased investment resulted in EBITDA for the quarter marginally down.

Highlights for the full year results ending 24th September 2011 included:

• Turnover of £1,117.0 million, 2% below last year excluding the 2010 World Cup and the accounting effect of the removal of prize bingo (which has no gross profit impact)

• Group EBITDA (pre-exceptionals) of £261.0 million, 8% lower year on year on an underlying basis

• Unlevered cashflow of £230.1 million

o 88% cash conversion

o Cash outflow of £118.7 million, including the net repayment of £190.1 million of senior debt and refinancing costs of £41.0 million

• Year-end net debt of £1,323.0 million for covenant purposes.