sale of subsidiary 14 October 2004The ManagerCompany...

sale of subsidiary 14 October 2004

The Manager
Company Announcements
Australian Stock Exchange Limited
Exchange Centre
Level 6, 20 Bridge Street
Sydney NSW 2000
3 pages

Dear Sir,

COMPANY UPDATE – SALE OF SPORTSBET PTY LTD SUBSIDIARY

Betcorp Ltd (the “Company”) is pleased to announce the successful sale of its wholly
owned Australian subsidiary, Sportsbet Pty Ltd (“Sportsbet”), effectively immediately.
This unconditional sale follows our initial announcement in respect of our intentions
made on the 10th September 2004.
The Northern Territory Racing Commission has given full approval for the sale of the
Sportsbet business to Mr John McDonald, the current general manager. The Sportsbet
business has been loss making for some time, and the sale means that additional
working capital is freed up, and there will be no further consolidation of losses from this
business.
In reference to other important matters:
o Substantial steps have already been taken to return the Company to profitability
through achieving higher levels of gross margin and the reduction of group
overheads;
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o Gross margin has improved considerably since the re-appointment of
Stuart Doyle as head bookmaker of the 100% owned operating subsidiary,
Tasman Gaming Inc. (“Tasman”) on 3rd September 2004.
o Mr. Colin Walker has now begun his term as Chief Executive Officer of the
Company effective 27th September 2004, and has already begun
implementing new measures towards the achievements of the Board’s key
objectives;
o The Company remains committed to a practice of stringent risk
management procedures, and cost control, to restore profit performance to
more acceptable levels.
o The closure of the Sydney head office is on schedule to be completed by 31st
October 2004, some two months earlier than previously indicated. The new
registered address and principal place of business from the 1st November 2004
will be:
�� Level 1, 199 Toorak Rd, South Yarra, 3141, Victoria, Australia;
The Company will voluntarily report its’ detailed third quarter earnings result to the
market during the week beginning 25th October 2004.
The Company is now aware, despite the encouraging improvement in gross margin
following the major management and operational changes referred to previously, that
the September 2004 quarter will show a material net loss. These material losses relate to
restructuring costs, the write-off of capitalised (aborted) acquisition costs and the
termination of numerous Contracts and agreements entered into by prior management,
as well as one-off costs associated with the sale of the Sportsbet business.
As yet we are unable to accurately quantify the loss as management are still
investigating various accounts and contracts and closing off the third quarter results.
Full details will be disclosed to the market and shareholders in the week commencing
25th October 2004.
While the third quarter result will likely be another disappointing result for
shareholders, the new Board and management believe it prudent to alert the market in
advance to this situation and to ensure the Company’s balance sheet is conservatively
(and responsibly) stated going forward.
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For queries, please contact the Company’s Chief Executive Officer, Mr. Colin Walker or
the Chief Financial Officer and Company Secretary, Mr. Nick Tyshing on 02 9954 6500.
Yours faithfully.
Betcorp Limited
Nick Tyshing
Chief Financial Officer & Company Secretary