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JAXX enjoys positive EBIT in second quarter on strength of World Cup

JAXX AG / Half Year Results

12.08.2010 09:09

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JAXX enjoys positive EBIT in second quarter on strength of World Cup

- Good bookmaking margins thanks to drawn matches and outsider wins in
World Cup
- Sales and earnings improve significantly on previous year 
- Business prospects still hampered by legal situation in Germany

Altenholz, 12 August 2010 - The JAXX Group (Deutsche Börse, Prime Standard,
ISIN DE000A0JRU67) has succeeded in generating good bookmaking profits
during the World Cup in South Africa. A number of drawn matches and several
outsider wins in the group stages led to an average margin of 20% in the
second quarter of 2010. In the same quarter of the previous year, which was
characterised by an unusually high number of wins for favourites in
European football leagues at the end of the season, the margin had been
only 7%.

Quarterly sales climbs 21%

Sales from continuing operations in the JAXX Group rose by 21% from EUR26.2
million in the second quarter of 2009 to EUR31.7 million in the second
quarter of 2010. The gross profit in the Sports Betting segment even soared
by 261% year-on-year.

As against the first half of the previous year, consolidated sales
increased by 24% from EUR51.5 million to EUR63.7 million.

Before the start of the World Cup, the web sites underwent a facelift that
was very well received by customers. In addition, mybet.com introduced live
betting at the start of the World Cup, which significantly expanded its
range. The World Cup itself was accompanied by extensive advertising
activities designed to attract new customers.

Six-month EBIT rises to EUR0.6 million

Despite greater marketing expenses, JAXX generated slightly positive EBIT
of EUR52 thousand in the second quarter as a result of the efficient use of
advertising funds for the World Cup and further improvements in risk
management. At EUR-3.1 million, earnings for the same period of the
previous year were marked by unusually high payouts in the Sports Betting
segment. Cumulative EBIT for the first half of the current year amounted to
EUR599 thousand (previous year: EUR-2.4 million).

EBT from continuing operations amounted to EUR429 thousand in the first
half of 2010 (previous year: EUR-2,672 thousand). The share of earnings
from discontinued operations, which comprise the investment in
pferdewetten.de AG held for sale, amounted to EUR-499 thousand (previous
year: EUR-288 thousand).

The consolidated net loss for the first half of the year was EUR-674
thousand. In the previous year, the JAXX Group generated a loss of
EUR-2,707 thousand. Earnings per share amounted to EUR-0.05 in the first
half of 2010 as against EUR-0.17 in the first half of 2009. EUR-0.01 of
this related to continuing operations (previous year: EUR-0.15).

Regulatory situation casts shadow on positive outlook in Germany

The Management Board is forecasting that business performance will remain
positive in the second half of the 2010 financial year. Experience shows
that sales in sports betting pick up again from mid-August after the end of
the summer break by the European football leagues. With the improved
user-friendliness of its platforms and the addition of live betting to its
product portfolio, the JAXX Group is excellently prepared for further
growth in its core segment.

Activities in the Lottery segment will focus on the start of ticket sales
for the Spanish Christmas lottery. The world's biggest lottery with prizes
of more than two billion euro captivates the entire country every year.

Business prospects are still being impaired by the persistently desolate
regulatory environment in Germany. Significantly higher costs are
anticipated in the third quarter owing to a number of new proceedings, some
of which will also involve fines.

At the start of September, the European Court of Justice (ECJ) will
announce its verdict on several German preliminary ruling proceedings
concerning the State Treaty on Gambling. If the judges adhere to the final
motion already published by Advocate General Mengozzi, the ECJ will be
expected to remain faithful to its current line and only allow gambling
monopolies under very narrowly defined conditions - which Germany does not
currently meet. Mengozzi had expressed considerable doubts as to the
compatibility of German regulations with EC law.

Nonetheless, it is expected that national courts could declare the German
State Treaty on Gambling to be compatible with European law on the basis of
the ECJ ruling. The consequence of this would be a further increase in
regulatory proceedings. Politics, business and associations will therefore
be called upon all the more to support and advance the bill submitted by
the Schleswig-Holstein ruling parties to safeguard jobs and finance mass

JAXX will continue to shift its focus towards other countries in Europe. In
addition to the markets of Italy, France and Denmark already targeted,
other countries are currently being analysed and preparations made for
market entry.

In business terms, the Management Board is still assuming that the 2010
financial year will close with positive results on rising sales.

Key figures for 6M/Q2 2010

                           6M 2010  6M 2009  +/-    Q2      Q2      +/-
                                                    2010    2009
                           TEUR     TEUR     %      TEUR    TEUR    %
Revenue                    63,660   51,513   +23.6  31,673  26,246  +20.7
          Betting stakes   49,874   37,150   +34.3  24,634  19,327  +27.5
  Commissions & handling    5,050    7,269   -30.5  2,401   3,585   -33.0
           Gambling fees    8,074    6,648   +21.5  4,207   3,123   +34.7
EBITDA                      2,521    1,080   +133     919   -1,062
EBIT                          599   -2,370             52   -3,087
Net loss                     -674   -2,707           -593   -2,796
   thereof: discontinued     -499     -288           -383    -121
EPS (EUR)                   -0.05    -0.17          -0.04   -0.17

                           30/06/10  31/12/09
Cash holdings               7,967    9,562
Shareholders' equity       17,277   17,093
Equity ratio                45.3%    42.1%

The half-year report is available for download on the Internet site of www.deutsche-boerse.com and www.jaxx.ag in the course of today. Contact: JAXX AG Investor Relations & Corporate Communications Stefan Zenker Tel. +49 (40) 85 37 88 47 Fax +49 (40) 85 37 88 30 Mail stefan.zenker@jaxx.com 12.08.2010 Ad hoc announcement, Financial News and Press Release distributed by DGAP. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: JAXX AG Ostpreußenplatz 10 24161 Altenholz Deutschland Phone: +49 (0)431 88 104-0 Fax: +49 (0)431 88 104-40 E-mail: ir@jaxx.com Internet: www.jaxx.com ISIN: DE000A0JRU67 WKN: A0JRU6 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Hamburg, München, Berlin, Düsseldorf, Stuttgart End of News DGAP News-Service ---------------------------------------------------------------------------