the business in leisure
sceptre leisure plc annual report and accounts 2011 in this report
highlights of the year
operational
  machine numbers up to 22500 from 21300
 machine asset utilisation on target at 95
 contract wins and renewals deliver growth in pub market
  acquisition of southernuk based machine operating business 
in november 2010
funding
  net debt reduced to £134m from £159m 
  new facilities agreed with lloyds banking group in june 2011
overview
ifc highlights of the year
01 who we are
02 what we offer
04 what sets us apart
06 building on our success
business review
08 chairman’s statement
09 strategic progress
10 chief executive’s review
17 financial review
20 principal risks and uncertainties
governance
22 board of directors
23 secretary and advisors
24 directors’ report
27 statement of directors’ responsibilities
28 independent auditor’s report
accounts
29 consolidated statement of comprehensive income
30 consolidated balance sheet
31 consolidated statement of cash flows
32 consolidated statement of changes in equity
33 notes forming part of the financial statements
66 company balance sheet
67 notes forming part of the company financial statements
other information
73 notice of annual general meeting
2011 2010 2009
£428m
£392m
£386m
revenue £m
2011 2010 2009
£132m
£59m
£150m
net assets £m
2011 2010 2009
30p
31p
25p
earning per share p
2011 2010 2009
£19m
£14m
£16m
profit before taxation £m
read more in the financial review  pp1719
sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk who we are
one of only two national operators 
of gaming and leisure equipment 
in the uk leisure market
sceptre leisure is one of the 
largest operators of amusement 
gaming and leisure equipment 
in the uk
with one of the most experienced 
teams in the industry we are able 
to provide our customers with 
the optimum equipment for their 
particular locations thus ensuring 
maximum income is generated
read on to find out how we 
are delivering excellence 
and driving growth
01 wwwsceptreleisureplccouk sceptre leisure plc annual report and accounts 2011 providing excellence through 
four unique trading brands
find out more at  wwwsceptreleisurecouk find out more at  wwwlotterykingcouk
sceptre leisure solutions
rents coinoperated amusement equipment to pubs and 
other leisure venues throughout the uk supplying many 
of the major players in the leisure industry
sceptre enjoys a strong position as the only national amusement 
machine operator with fully manned depots throughout the 
uk it has an excellent reputation for quality and has seen 
consistent growth throughout the last twelve years
an excellent reputation for quality 
and customer service
lotteryking
f ounded in 1993 lotteryking is the market leader in vended lottery 
solutions to the registered members’ club market it provides 
pulltab lottery tickets and lottery solutions to locations across the 
uk the company continues to develop the product introducing 
innovative new technology such as lcd screens for advertising 
use the lotteryking brand has been developed from a purely 
social club market and is now available in pubs through our 
external lottery management company creative lotteries limited
the market leader in vended 
lottery solutions
 more than a product supplier
we provide excellence not only through the products 
we supply but also through our unrivalled customer 
service standards over the past twelve years sceptre 
has become more than an operating company and 
now adds unique value to our customer partners 
through four trading brands
number of 
group‑operated 
machines
22500
what we offer
02 wwwsceptreleisureplccouk sceptre leisure plc annual report and accounts 2011 find out more at  wwwkellyseyecom find out more at  wwwpartyhousecouk
kelly’s eye
as the leading supplier of fundraising products to the registered 
members’ club market kelly’s eye offers a full range of 
fundraising and gameplay products from bingo to darts 
poker to skittles kelly’s eye products provide entertainment 
for thousands every week kelly’s eye is also able to produce 
bespoke raffle and draw tickets to order kelly’s eye is now 
taking advantage of sceptre leisure’s strong presence and 
relationships in the pub market
providing entertainment for 
thousands every week
party house
party house has been operating since 1977  supplying a wide 
range of party supplies and display products to the trade and 
wholesale markets and direct to the public party house 
joined the sceptre leisure plc group in june 2010 party house 
can source design pack and distribute all party supply decorations 
and novelties direct from its warehouse in preston
an established presence for 
over 30 years
03 wwwsceptreleisureplccouk sceptre leisure plc annual report and accounts 2011 what sets us apart
 nationwide presence
our nationwide network of service depots allows 
us to react quickly to our customers’ needs we aim 
to provide engineering response within two hours 
anywhere within the uk
the only national machine operator 
with fully staffed facilities
find out more about our locations online  
wwwsceptreleisurecoukaboutushtml
number of uk‑ wide 
regional depots
13
staff nationwide
420
our depot network 
is ideally situated to 
service the needs of 
our customers’ estates
04 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk  always on call
we like to talk to our customers to ensure 
that we understand their requirements 
we provide service cover 364 days 
of the year
days of telephone service 
cover per year
364
—  we commissioned a new customer service centre 
which opened in 2010
—  our industryleading amusement machine overview amo 
reporting pack gives our customers machine performance 
analysis on a regional area and sitebysite basis
—  innovative point of sale promotional material attracts 
players and drives machine income
what we’re doing
redefining the benchmarks 
in customer service
we have redefined the benchmarks in customer service 
believing firmly that a product is only as successful as the 
service that complements it
find out more about our strategy for growth  p9
05 wwwsceptreleisureplccouk sceptre leisure plc annual report and accounts 2011 building on our success
machine asset utilisation 
at 30 april 2011
95
amusement with prizes 
awp maximum prize 
value 2010 £70
£70
 structured experienced management
our well structured and vastly experienced management 
team has allowed us to forge strong links with major 
manufacturers ensuring that we keep ahead of the 
changing needs of the market
a strong business model
positioning ourselves to build 
on existing success
we believe that the strength of our scalable business 
model allows us to accommodate further growth within 
our existing infrastructure
—  a broad range of highquality blue chip customers 
across a variety of businesses
—  adequate funding £31m of undrawn facilities 
as at 30 april 2011
—  banking facilities renewed with lloyds banking group 
in june 2011
—  experienced and committed board of directors
— history of growth in sales and profits
well positioned for future growth
find out more about our strategy for growth  p9
06 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk  offering product diversity
in addition to fruit machines pools tables 
and jukeboxes we also supply a wide range 
of video games and machines
 performance measurement kpis
2011 2010 2009
£2583
£2802
£2547
machine week average £
2011 2010 2009
3200
2900
3500
number of units lotteryking
2011 2010 2009
£237m
£238m
£246m
machine rental net income £m
2011 2010 2009
18100
17300
19000
number of units sceptre
read a comprehensive review of our performance  pp10‑ 19
restated to eliminate the effect of the fobt assets sold in april 2010
07 wwwsceptreleisureplccouk sceptre leisure plc annual report and accounts 2011 chairman’s statement
results
sceptre has delivered a creditable set of results 
in another year of challenging trading conditions 
with the core business performing well our prior 
year comparative figures included the fixedodds 
betting terminal machine operation sold in april 
2010 for a substantial profit and likeforlike 
comparisons are therefore difficult to make 
however  our acquisition of rv smith in november 
2010 and the award of a new contract by punch’s 
managed division have allowed us to build on the 
good start reported in our interim statement
we have continued to reduce gearing further 
over the course of the year with net debt down 
to £134m in april 2011 from £159m this underlines 
the strong cash generation provided by our core 
business delivered from our recurring revenue 
stream from machine rentals
acquisition
sceptre acquired the machine assets 
and operations of surreybased rv smith 
leisure limited in november 2010 for a 
total consideration of £12m paid in a mixture 
of cash and shares this transaction further 
strengthened our position in the south of the 
uk and is reviewed in more detail on page 13 
as with our previous acquisitions the additional 
assets were quickly and efficiently absorbed 
into our operational infrastructure
contract wins
in addition to the punch contract win reported 
previously sceptre has been able to announce 
a number of new or renewed contracts in the 
second half of the year some of these have 
been with longstanding customers such as 
joseph holt daniel thwaites and de vere hotels 
whilst others have been with new clients such 
as the mcmanus pub company a fuller review 
of the punch contract is made in the case study 
on page 12 all of these contract awards are the 
result of our commitment to customer service 
and the operational knowhow provided by 
our team
people
it is our employees that set us apart from the 
competition and give us a critical competitive 
advantage our operational teams are continually 
raising the bar in delivering customer service 
and quality i would like formally to thank all 
members of the sceptre team for their continued 
efforts they should feel proud of their contribution 
towards this year’s results
outlook
we will continue to pursue our strategy of 
growth through organic contract wins and 
selected acquisitions financed by internal cash 
generation sceptre remains the firstchoice 
operator in the pub and club market
douglas yates
chairman
26 july 2011
sceptre has continued to reduce gearing further over the course of 
the year with net debt down to £134m from £159m underlining the 
strong cash generation provided by our core business
sceptre leisure plc annual report and accounts 2011 08 wwwsceptreleisureplccouk strategic progress
driving long‑term shareholder 
value through organic growth 
and acquisition
 our strategy
  our progress 
in brief
 our goals
develop on our market 
leadership positions
create longterm 
shareholder value
1 2
developing our 
organisation
our growth over the past twelve 
years has been both organic and 
acquisitive we seek to gain new 
business in geographical areas 
that complement our nationwide 
operational infrastructure 
acquisitions are integrated 
quickly and efficiently so that 
they can begin to contribute 
from day one
market focus
we continue to win highquality 
business in all areas of the uk 
our commitment to customer 
service has led us to be 
recognised as a leading 
machine operator by the  
uk’s premium pub companies
improving our 
operations
the combination of our recent 
acquisition and contract wins 
gives us a great platform from 
which to build the business 
our target is to have 95 
of our assets on site at any 
one time this high level of 
utilisation maximises returns 
from our machine estate
—  contracts renewed with 
joseph holts and daniel thwaites
—  new contracts won with punch 
pub company de vere hotels 
and mcmanus pub company
—  rv smith acquisition assimilated 
into existing infrastructure
—  machine density improved 
in southern depots
—  machine asset utilisation at 
target of 95
—  ratio of machines operated 
to people employed improved 
to 49 from 47
find out more  p8 find out more  p13 find out more  p13
09 wwwsceptreleisureplccouk sceptre leisure plc annual report and accounts 2011 chief executive’s review
i am pleased to be able to report another year of 
progress for sceptre leisure we have grown our 
machine rental business in the core pub market 
through both organic contract wins and selected 
acquisitions and we continue to develop the 
kelly’s eye brand across a wide range of 
leisure outlets
we have reduced net debt by some £25m during 
the period under review whilst continuing to 
invest in our machine estate to ensure that we 
are able to offer our customers a wide choice of 
games suitable for varying locations
profitability
as reported in our interim statement we began 
the financial year with a reduced machine base 
following the sale of our fixed odds betting 
terminal fobt estate in april 2010 revenue 
and profit for the first half of the year were 
therefore both at a lower run rate than the 
second half of the previous year
in addition regulatory changes surrounding games 
offered on quiz machines swps in april 2010 
saw income from these assets reduce as some 
game content was removed to comply with 
hmrc requirements this had an adverse effect 
on shared income from swps which resulted in 
sceptre’s weekly revenue per machine falling 
from an average of £2998 in 2010 to £2382 
over the past year on a machine estate of some 
3100 pieces this equated to a fall in revenue 
of £19000 per week the full £1m effect of which 
flowed through to reduce our profit for the 
financial year
action was taken to reduce our operating costs 
and as a result staff overhead spend was lower 
in q4 than in q1 in spite of a larger machine 
estate following the acquisition of rv smith and 
the award of the new punch contract accordingly 
in spite of an acquisition and organic growth 
in machine numbers our income was adversely 
affected and our full year profitability was 
therefore at the lower end of our expectations
sceptre leisure solutions
as discussed above revenue within our machine 
rental business reduced yearonyear this is due 
both to the sale of our fixed odds betting t erminal 
fobt machines at the end of fy2010 which 
contributed approximately £25m turnover in the 
prior year and also to pub companies moving 
away from charging royalties to tenants as part 
of the machine contract a reduction of £13m 
compared to 2010
this reduction in royalty revenues had no effect 
on the division’s profitability as all charges 
recognised in revenue are passed on directly 
to the pub company as a cost of sale for this 
reason whilst turnover within sceptre leisure 
solutions fell during the year under review the 
gross margin grew in percentage terms over 
the same period
in summary
acquisition of assets and generations 
of rv smith leisure in november 2010
organic growth through contract wins 
existing contracts renewed
machine rental market ripe 
for consolidation
we have grown our machine rental business in the core pub market 
through both organic contract wins and selected acquisitions
sceptre leisure plc annual report and accounts 2011 10 wwwsceptreleisureplccouk these two changes in our business have 
necessitated a recalculation of one of our main 
kpis that of machine week average mwa this 
change is explained fully in the kpi section of the 
financial review on page 18 and allows a better 
comparison of the division’s performance over 
time we maintained our mwa yearonyear in 
spite of changes to the games available on our 
skills with prizes swp terminals as a result 
of an hmrc ruling on content these changes 
resulted in a 20 reduction in revenue from 
this class of machine equivalent to £1m per 
year – a reduction reflected across the entire 
machine operating industry we took swift 
action to mitigate these losses both through 
the negotiation of new software licences 
at reduced costs where possible
following the sale of the fobt operation in 
april 2010 we took the opportunity to reduce 
debt with part of the £375m proceeds after a 
period of consolidation in h1 we were pleased 
to announce the award of a major contract 
with the punch pub company to supply 30 of 
their managed estate the threeyear contract 
covering around 800 machines is reviewed 
in more detail on page 12 and marks another 
important milestone in sceptre’s development
our contract pipeline remained strong 
throughout the remainder of the financial 
year and we confirmed the renewal of 
longstanding relationships with joseph holt 
number of group‑operated 
machines
22500
uk machines 2010
234000
sceptreoperated machines 2011
22500
uk pub sector machines 2010
c145000
total uk betting stake 2009
£1029bn
total uk prize money 2009
£823bn
sceptre leisure solutions limited
—  greater dependence on alternative income for 
national and regional pub companies and landlords
—  sceptre has continued to grow in its core market 
despite pub closures
amusement machines
—  increased presence in leisure travel and 
multisite locations
—  stakes and prizes increase in june 2009 provided 
a boost to the market
machine locations
 pubs 70
 clubs 15
 travel 8
 multisite 7
market overview
  creating a market focus
source bacta
11 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk machines covered 
by ppc contract
800
punch pub company awarded the 
agreement based on the high level 
of service and support that sceptre 
leisure offers and which we have 
experienced in our leased business 
over a number of years we feel this 
will ensure that our pubs get the 
very best out of their machines in 
terms of service delivery and 
gaming innovations
julie clamp 
machine development manager punch pub company
contract win with  
pub punch company
sceptre will supply coin operated amusement equipment 
including awps pool tables and music solutions to 
30 of the pub punch company estate which includes 
established brands such as chef  brewer 
this customersupplier relationship will develop over 
the years to come technology advances coupled with 
excellent customer service allow us to generate more 
income per machine for pub punch company than 
our competitors
 what’s involved
 how will sceptre benefit
12 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk chief executive’s review continued
sceptre leisure solutions continued
and daniel thwaites whilst also winning 
new business with de vere hotels and 
the mcmanus pub company 
these contract wins underline our position as 
the preferred machine operator for most pub 
companies within the uk our figures show 
that sceptre consistently generates higher 
machine income for our customers wherever it 
competes headtohead with our main national 
competitor within a pub company’s estate this 
outperformance is due to our operational team 
whose drive for quality and service keeps us at 
the forefront of the industry i am proud to work 
with such a talented group and would like to take 
the opportunity to thank them for their hard 
work and dedication over the course of the year 
overall performance within the machine rental 
division was strong given the trading environment 
reflecting increased machine numbers in the 
second half of the year and also the contribution 
made by the acquisition of the assets and 
operations of rv smith leisure limited in 
november 2010 this has allowed us to improve 
our operational ratios further  increasing machine 
density in the south of the uk we also achieved 
a higher average number of machines operated 
per person employed within the division up to 49 
at 30 april 2011 from 47 the previous year 
and maintaining our asset utilisation rate at 
our target of 95
acquisition
on 29 november 2010 we announced 
the acquisition of the machine assets and 
operations of rv smith leisure limited for a 
total consideration of £12m the purchase price 
was made up of £08m in cash with the remainder 
satisfied by the issue of 14m shares at the market 
price of 277p on the day of completion
the assets acquired consisted of 925 machines 
in 277 locations across the south of the uk our 
strong and flexible infrastructure meant that 
this new business could be absorbed within our 
existing depot network without the need for 
new premises we were pleased to welcome the 
transferring employees who were quickly and 
efficiently incorporated into sceptre’s operation 
in the days following the acquisition
the acquisition further strengthened our position 
in the south of the uk and provided improved 
density within our london and bournemouth 
depots we will continue to follow a strategy of 
growth through selected acquisitions assuming 
that the price and overall fit of the targets 
are right
overall performance within the machine rental division was strong 
reflecting increased machine numbers in the second half of the year 
  developing our 
organisation
2011 2010 2009 2008
15200
21300
20900
22500
machine numbers
what we’ve achieved
—  continued growth in the south
—  acquisitions fully integrated
—  increased market share
planning for the future
—  investment in new technologies such 
as note payout
—  £9m of capital expenditure on new 
machines in 2011
—  product offer increased with 
party house range
13 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk chief executive’s review continued
the acquisition further strengthened our position in the south 
of the uk and provided improved density within our london 
and bournemouth depots 
lotteryking
we improved market penetration of our lottery 
terminals over the course of the year with 
terminal numbers in pubs and clubs increasing 
by 4 to 3500 in the period under review
we also grew lottery sales within pubs through 
creative lotteries achieving a 38 increase in 
sales to £023m during the financial year these 
lotteries also raised over £90000 for charity 
over the period
the registered members’ club market has 
contracted significantly over the course of 
the recession with many clubs closing and 
others seeing a reduction in footfall particularly  
in the past year 
for this reason private lottery revenue fell 
yearonyear although our restructuring of this 
division at the end of the 2010 financial year saw 
losses reduce
we will continue to work on maximising our 
return from existing assets within this division 
while ensuring that it contributes to overall 
group cash flow in the coming year
kelly’s eye
october 2010 saw the launch of kelly’s catalogue 
which brought together a full range of fundraising 
indoor gaming catering and bar products aimed 
at the licensed market for the first time we will 
continue to use this as a tool in order to increase 
our penetration of the pub and club market with 
an aim to establish kelly as the leading supplier 
within the uk
outlook
sceptre continues to grow and our ambition is 
to become the largest machine operator within 
the pub market over the next 18 months whilst 
maintaining or increasing our margins
the market is ripe for further consolidation and 
we will identify suitable acquisition targets that 
will enhance our existing machine estate
we will also pursue contracts with both new 
and existing customers further cementing our 
position as the preferred operator for national 
regional and local pub companies across the uk
finally we will develop the kelly’s eye brand within 
the leisure market using our existing customer 
base to increase sales and add incremental profit 
across our divisions in the coming months
kenneth turner
chief executive officer
26 july 2011
  improving our 
operations
what we’ve achieved
—  improved operational ratios
—  maintained machine asset utilisation 
at 95
—  rationalised operating costs
planning for the future
—  nationwide infrastructure ready for growth
—  continued investment in communication 
technology to allow remote machine 
management and fault diagnosis
— digital machine trials ongoing
revenue split by activity
 machine rental 91
 lottery and indoor gaming 8
 equipment sales 1
sceptre leisure plc annual report and accounts 2011 14 wwwsceptreleisureplccouk sceptre leisure supplies the 
majority of our estate across the 
uk we greatly value sceptre’s 
operational expertise in maximising 
income from our machines and 
respect their high levels of support 
to keep them up and running
john appleton 
director of electronic leisure 
mitchells  butlers plc
understanding our  
customers’ requirements
sceptre dedicates considerable resources to important 
national customers such as mitchells  butlers from 
the ceo to our collectors our entire team is focussed 
on generating income for our customers this is why 
we are now the preferred national supplier for many 
pub companies across the uk
  choosing the right team
15 wwwsceptreleisureplccouk sceptre leisure plc annual report and accounts 2011 revenue potential from 
secured contract
£15m
these new deals 
demonstrate our 
continued progress 
towards becoming the 
number one machine 
operator in the uk 
pub market
ken turner 
chief executive officer sceptre leisure plc
100 sole supply with  
joseph holt limited
joseph holt limited has awarded a new twoyear 
contract to sceptre for 100 sole supply to its 
130location managed and tenanted estate the contract 
continues the close working relationship built up over 
more than twelve years
 what’s involved
joseph holt’s estate provides valuable density in the 
north west and the renewed contract will provide 
some £15m in revenues over two years
 how will sceptre benefit
16 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk financial review
i would like to take the opportunity to review 
some key areas of our financial performance 
in the year under report
revenue
group turnover decreased £42m or 98 to 
£386m due to a number of factors the fobt 
assets which were sold in april 2010 had 
contributed £25m of sales in the previous year 
in addition a decrease in machine royalties 
charged by national pub companies resulted in 
a further £13m of revenue reduction although 
this had no effect on gross margin as any revenue 
is passed on directly as a cost of sale finally the 
change in legislation affecting the games offered 
on quiz machines swps accounted for a 20 
or £1m further reduction in revenue these 
reductions were offset by gains through organic 
contract wins and the acquisition of rv smith’s 
machine assets during the course of the year
profitability
operating profit before exceptional items 
decreased by 41 to £24m whilst profit before 
tax decreased by 14 to £16m
the machine operating division representing 
92 of group revenues achieved operating profits 
of £39m 2010 £51m the principal reason for 
this reduction was the sale of the fobt assets at 
the end of the 2010 financial year  which meant 
that the division began 2011 with a lower machine 
asset base and therefore lower revenue levels 
than had been achieved in 2010 in addition the 
sale of those assets had also provided £05m 
of operating profit in 2010 finally the division 
incurred a higher noncash amortisation 
charge of £05m 2010 £02m as a consequence 
of recognising and amortising intangible assets 
under ifrs
corporate overheads amounted to £09m 
2010 £09m and comprised the costs of 
the board legal professional and other fees 
connected with running a public company
other divisions improved their yearonyear 
performance contributing a reduced operating 
loss of £02m 2010 £10m following a restructure 
of the operational functions to reduce costs
there was also an employee sharebased payment 
charge of £01m 2010 £01m recognised in the year 
earnings per share
basic earnings per share reduced to 25p 
2010 30p
finance costs
the net finance costs charged to income were 
£11m 2010 £13m this is made up of £13m 
in cash interest paid 2010 £14m with balancing 
finance income of £02m relating to a noncash 
interest rate swap movement gain during the 
year 2010 £01m gain
net debt reduced to £134m at 30 april 2011 from £159m a year earlier 
due to the ongoing repayment of our term loan and loan note
in summary
falls in revenue due to legislation 
changes offset by gains through 
organic contract wins and acquisitions
improved performance in the 
lottery division
kpis restated to allow likeforlike 
comparisons with previous years
17 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk financial review continued
finance costs continued
the derivative contract was a condition of the 
group’s banking agreements with bank of scotland 
now part of lloyds banking group and was 
designed to continue alongside this facility 
until the end of the term loan in october 2012
acquisition
on 29 november 2010 sceptre leisure plc 
announced the acquisition of the trade and assets 
of rv smith leisure limited in a combined cash 
and shares deal the acquisition is disclosed in 
note 14 to the consolidated financial statements
exceptional costs
during the year the group incurred certain 
oneoff restructuring costs these centred on 
provisions for redundancy and other costs 
associated with corporate restructuring
in addition the directors considered that the 
brand names of lotteryking and kelly’s eye had 
suffered impairment during the year giving rise 
to a cost of £49000 2010 £227000 finally a 
fair value adjustment under ifrs 3 following the 
acquisition of the trade and assets of rv smith 
leisure limited led to the recognition of a gain on 
bargain purchase of £07m these costs are set out 
in note 14 to the consolidated financial statements
key performance indicators
the board of sceptre leisure plc monitors a range 
of financial and nonfinancial performance indicators 
to measure performance against expected targets
during the course of the year  it became clear that 
one of these measures machine week average 
mwa required restatement to enable meaningful 
comparisons with the previous year  in the past this 
measure included royalty charges which were paid 
out directly to pub companies in addition the figure 
also included contribution from the fobt operation 
finally the previous measure of mwa was calculated 
on a oneweek snapshot at the end of the period 
under review
we have therefore amended the way we 
calculate this kpi to allow a better comparison of 
likeforlike performance over time the measure 
now uses adjusted average machine numbers 
and income levels over a sixmonth reporting 
period and reflects only net machine revenue 
charged by sceptre leisure solutions
a summary of the kpis together with comparatives 
from the prior year are shown in table on page 19
lottery tickets 
sold annually
55m
the machine operating division representing 92 of group revenues 
achieved operating profits of £39m
sceptre leisure plc annual report and accounts 2011 18 wwwsceptreleisureplccouk financing
net debt decreased to £134m from £159m  
as at 30 april 2010 this decrease was due  
to the repayment of the term loan with lbg 
and the loan note with crown leisure
on 28 june 2011 sceptre leisure plc agreed 
new facilities with lloyds banking group £375m 
of the outstanding balance on the revolving 
credit facility at 30 april 2011 was added to the 
outstanding term loan also £375m at the same 
date and combined into a new term loan of 
£75m repayable over three years to april 2014 
in addition lloyds banking group continues to 
provide a £500000 working capital facility to the 
group which will next be reviewed in june 2012
financial risk treasury management
the majority of the group’s borrowings are fixed 
through a combination of fixed rate securitised 
debt and interest rate swaps the banking and 
covenants are reviewed throughout the year 
as part of the internal reporting process with 
a focus on ensuring appropriate headroom 
is available
interest rate risk
the group uses an interest rate collar to manage 
its exposure to interest rate movements on its 
bank borrowings contracts covering notional 
amounts equivalent to the old term loan of 
£375m restrict interest payments at rates 
between 47 and 575 over the life of the 
loan the fair value of the collar at the reporting 
date is reflected in the group balance sheet under 
the derivative financial instrument heading
currency rate risk
the group buys currency at spot rate there 
are few transactions in foreign currencies 
and therefore the group’s exposure to foreign 
exchange risk is considered to be low the group 
would look to minimise any increased exposure 
to foreign exchange through the use of currency 
instruments if appropriate
liquidity risk
the group’s approach to managing liquidity is 
to ensure as far as possible that it has sufficient 
liquidity to meet liabilities as they fall due with 
surplus facilities to cope with any unexpected 
variances in timing of cash flows at 30 april 2011 
the group had undrawn borrowing facilities of 
£31m 2010 £13m of which £31m 2010 £13m 
was uncommitted in addition to undrawn 
borrowing facilities as at 30 april 2011 the group 
held on deposit cash of £14m 2010 £42m
taxation
the effective tax rate for the year was 125 
2010 153 this rate is lower than the uk 
mainstream corporation tax rate of 28 due to 
a change in the deferred tax rate and the effect 
of the recognition of a gain on bargain purchase
mark white
finance director
26 july 2011
kpi summary
financial        2011  2010
1  earnings per share before exceptional items    20p  41p
2  ebitda        £122m  £138m
nonfinancial
3 machine numbers       22500  21300
4 machine week average sls     £2547 £2583
5 piecespersonnel ratio sls     49  47
6 asset utilisation sls      95  95
19 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk principal risks and uncertainties
 risk description
 potential impact
 mitigation
prolonged economic 
recession in the uk
withdrawal of asset 
finance lines or 
working capital facility
loss of key personnel
largescale closures of pubs and 
other customer locations
reduction in future profitability 
and cash flow
limit to the group’s ability to achieve 
its strategy in target markets
failure to provide shareholder value
changes to the leisure market 
in the uk
limit to the group’s ability to fund 
capital expenditure for continued 
growth or machine injection or 
provide appropriate working capital
damage to customer relationships
loss of operational knowledge
shortmediumterm disruption 
to the business
monthly reports by business units 
to identify trading performance 
against forecast
monitoring of kpis and staff
machine ratios
develop relationships with 
highquality customers
swift actions taken to reduce 
capacity and overhead 
where necessary
ensure alternative sources of 
investment available if required 
– equity investmentbank 
revolving facility
develop relationships with a range of 
asset finance providers to spread risk
maintain regular contact with existing 
providers to build relationships
reassess growth forecasts and 
equipment requirements
ensure that succession planning 
in place at all levels
review and assess career 
development options for 
key personnel
review and benchmark 
remuneration and benefits
annual performance reviews 
to highlight problems early
 risk explained
risk is a natural part of any business the group has identified 
evaluated and has mitigating strategies for the principal risks 
faced by the business risks are identified in five core areas
economic operational
regulatory financial
people
economic financial people
although it is not possible entirely to eliminate risks all 
reasonable steps are taken to ensure that any adverse 
consequences associated with these risks are minimised 
the board has identified the following factors as principal 
potential risks to the successful operation of the business
sceptre leisure plc annual report and accounts 2011 20 wwwsceptreleisureplccouk poorly performing 
acquisitions
loss of major 
customer
prolonged and 
significant machine 
frauds
industryspecific 
increases in tax 
and duties
reduction in future profitability 
and cash flow
reduction in future profitability 
and cash flow
operational disruption to rectify 
security problems
reduced machine take to affect 
customer profitability
reduction in target market
limit to group’s ability to 
meet targets
reduction in future profitability 
and cash flow
ensure high level of preacquisition 
due diligence
ensure adequate professional 
advice sought and received
review postacquisition integration 
and operational planning
monthly financial and operational 
performance reviews of acquired 
business units
ensure increasing customer 
spread to reduce reliance on 
single large customer
regular review of performance 
against service level agreements
review customer solvency to ensure 
likelihood of continued trading
ensure adequate review of all 
tenders for new business at 
appropriate level
security department to investigate 
all machine frauds
appropriate cash controls  
to mitigate risk
work with manufacturers to retrofit 
new devices on existing machines
ensure new machines meet highest 
available standards
ensure professional advice sought
supply input to government 
consultations
review customer contracts to 
ensure that regulatory and tax 
risk is adequately addressed
operational regulatory
21 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk board of directors
douglas is an fca with 35 years’ experience 
in leisure and retail businesses he spent 17 years 
with the rank group as group finance director 
group commercial director and for a short period 
as acting chief executive during that time he had 
responsibility for a number of rank’s businesses 
including associated leisure and its gaming division 
douglas is a member of both the audit and 
remuneration committees
responsibilities
financial and administrative management 
of sceptre leisure
former roles
finance director gamingking plc 
finance director lotteryking 
senior management team mencap 
finance director cowells arrow uk
qualifications
member of chartered institute 
of management accountants
year of appointment
2006
responsibilities
daytoday management of sceptre leisure
former roles
managing director crown leisure rentals 
senior management positions with mmk uk ltd 
and grand metropolitan
year of appointment
founded sceptre leisure in 1998
responsibilities
member of audit and remuneration committees
former roles
group finance director and acting chief executive 
officer rank group
qualifications
fca qualified
year of appointment
2005
ken founded sceptre leisure solutions in 1998 and 
as chief executive he has daytoday responsibility 
for managing sceptre leisure plc he was previously 
the managing director of crown leisure rentals 
where he played an instrumental role in the successful 
integration of acquisitions into the division previously 
ken held senior management positions with 
mmk ukltd and grand metropolitan and spent 
earlier parts of his career with argyle group 
fw woolworths and northern foods
mark is an associate member of the chartered 
institute of management accountants he has worked 
for the group since april 2006 and was the finance 
director of gamingking plc from october 2006 until 
september 2008 he subsequently acted as the 
finance director of lotteryking and other subsidiaries 
of the company he formerly worked for mencap as 
part of the senior management team for the eastern 
region and previous to that was finance director for 
cowells arrow uk the uk subsidiary of a usbased 
printing and manufacturing company
douglas yates
independent nonexecutive chairman
kenneth turner
chief executive officer
mark white
finance director
sceptre leisure plc annual report and accounts 2011 22 wwwsceptreleisureplccouk secretary and advisors
responsibilities
member of audit and remuneration committees
former roles
finance director gamingking plc 
finance director inmac uk
qualifications
fca and chartered director
year of appointment
1998
guy is both an fca and a chartered director 
he joined gamingking in 1998 on a parttime basis 
as finance director and became company secretary 
and nonexecutive director in 2006 guy is a member 
of both the audit and remuneration committees
responsibilities
member of audit and remuneration committees
former roles
directorships with trusthouse forte leisure 
tavern automatic and london coin 
founder and chairman honeycombe leisure 
chairman orb holdings
year of appointment
cofounded sceptre in 2008
victor has held senior positions in the leisure 
industry including directorships with trusthouse 
forte leisure tavern automatic and london coin 
more recently victor was the founder and chairman 
of honeycombe leisure prior to joining orb holdings 
of which he was chairman for eight years 
victor is a member of both the audit and 
remuneration committees
victor wardman
nonexecutive director
guy van zwanenberg
nonexecutive director
company secretary
guy van zwanenberg
registered office
139 brookfield place 
walton summit 
preston pr5 8bf
registered number
31897 47
nomad and broker
panmure gordon  co
155 moorgate 
london ec2m 6xb
statutory auditor
grant thornton uk llp
grant thornton house 
melton street 
euston square 
london nw1 2ep
solicitors
napthens llp
st andrews house 
wellington street 
blackburn bb1 8db
registrars
capita irg
the registry 
34 beckenham road 
beckenham 
kent br3 4tu
bankers
bank of scotland plc 
lloyds banking group
the mound 
edinburgh eh1 1yz
website
wwwsceptreleisureplccouk
23 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk sceptre leisure plc annual report and accounts 2011 24 wwwsceptreleisureplccouk
fig 1  directors’ interests
directors’ report
kenneth turner retires by rotation and being 
eligible offers himself for reelection
douglas yates retires by rotation and being 
eligible offers himself for reelection
directors’ interests
the directors’ beneficial interests in the shares 
of the company as at 30 april 2011 detailed in 
the table below
substantial interest in share capital
as at 22 july 2011 the company was aware of 
the following holdings in addition to those of the 
directors disclosed in fig 1 of 3 or more of the 
nominal value of the company’s shares
the interests and percentages shown in fig 2 are 
calculated by reference to the company share 
capital in issue as at 30 april 2011 at that date 
the total number of sceptre leisure plc shares 
in issue was 56989585
principal risks and uncertainties
a review of the principal risks and uncertainties 
is on pages 20 and 21 and forms part of this 
directors’ report
proposed dividend
the directors do not recommend the payment 
of a dividend 2010 £nil
directors
during the year  the directors of sceptre leisure plc 
were as follows
— douglas yates
— kenneth turner
— mark white
— brian nichols to 30 may 2010
— guy van zwanenberg
— victor wardman
the directors present their directors’ report and 
financial statements for the year ended 30 april 2011
principal activities and business review
the principal activity of the group is the sale and 
rental of gaming and amusement machines and 
associated ancillary items 
a review of the year’s activities financial 
performance and future prospects are contained 
in the chief executive’s review on pages 10 to 16 
and the financial review on pages 17 to 19 and 
form part of this directors’ report
key performance indicators
during the year the directors monitored the 
progress of the overall group and subsidiary 
company strategies by reference to certain 
financial and nonfinancial key performance 
indicators kpis these kpis are monitored on 
a monthly basis and are set out in the financial 
review on pages 17 to 19
       30 april 2011    30 april 2010 
       sceptre leisure plc    sceptre leisure plc 
       5p ordinary shares    5p ordinary shares
      number  percentage  number  percentage
douglas yates   13000  002  13000   002 
kenneth turner   10921761  1916  10921761   1966 
mark white  15000  003   4000   001 
brian nichols   320853  056  320853   058
guy van zwanenberg   40200  007  40200   007 
victor wardman   10921632  1916  10921632   1966 
directors’ interests in share options are set out in note 24 to the financial statements
name           shareholding  
hillroad investments limited       16603400   2913
anthony yates      5434997  954
stuart jackson      2168835   381
fig 1
fig 2  substantial interest in share capital
fig 2 25 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
          amounts  
         sharebased  paid to 2011 2010 
     salary expenses bonus pension payment third parties total total 
     £000 £000 £000 £000 £000 £000 £000 £000
douglas yates  55 — 5 — 2 — 62 54
kenneth turner  150 — 30 23 14 — 217 167
mark white 100 3 10 10 19 — 142 —
brian nichols to 30 may 2010 8 — — 1 — — 9 124
guy van zwanenberg — — — — 2 38 40 34
victor wardman 30 — 5 — 2 — 37 32
  343 3 50 34 39 38 507 411
2010 total does not include directors whose period of office ended on or before 30 april 2010 the full comparative cost of the board for 2010 is £533000
fig 3  directors’ remuneration
political and charitable contributions
charitable donations during the year totalled 
£18900 2010 £10900 no political contributions 
were made by the company or any of its subsidiaries
forwardlooking statements
any forwardlooking statements made in this 
document represent the board’s best judgement 
as to what may occur in the future however 
the group’s actual fiscal results and corporate 
developments in the current and future periods 
will depend on a number of economic competitive 
and other factors some of which will be outside 
the group’s control such factors could cause 
the group’s actual results for future periods to 
differ materially from those expressed in any 
forwardlooking statements in this document
board composition
the group is controlled through its board of 
directors the board comprises the nonexecutive 
chairman and two other nonexecutive directors 
the chief executive and the finance director 
disabled employees
the group gives full consideration to applications 
for employment from disabled persons where 
the requirements of the job can be adequately 
fulfilled where existing employees become 
disabled it is the group’s policy wherever 
practical to provide continuing employment 
under normal terms and conditions as 
stated above all employees are given equal 
opportunities in terms of career development 
and promotion
policy and practice on payment of creditors
it is the group’s policy to agree the terms 
of payment with each of its suppliers at the 
commencement of the trading relationship and 
to abide by those terms at the year end there 
were 92 days’ 2010 45 days’ purchases in trade 
payables the increase in trade payables is due 
principally to the extended credit facility offered 
by a supplier of amusement machines under 
which there was £26m outstanding as at 
30 april 2011 2010 £nil
financial instruments
the group’s treatment of financial instruments 
is disclosed in note 1 to the financial statements
thirdparty indemnity provision
during the year the group took out qualifying 
thirdparty indemnity provision for the benefit 
of directors
employees
briefing and consultative procedures exist 
throughout the group to keep employees 
informed on general business issues and other 
matters of concern it is the group’s policy that 
there should be no discrimination on grounds 
of race religion age or gender in considering 
applications for employment all employees are 
given equal opportunities in terms of career 
development and promotion sceptre leisure plc annual report and accounts 2011 26 wwwsceptreleisureplccouk
directors’ report continued
auditor
in accordance with section 489 of the 
companies act 2006 a resolution for the 
reappointment of grant thornton uk llp as 
auditor of the company is to be proposed at 
the forthcoming annual general meeting
by order of the board
guy van zwanenberg
company secretary
139 brookfield place 
walton summit 
preston pr5 8bf 
26 july 2011
remuneration committee
the board has a remuneration committee 
the principal functions of which are to determine 
the group’s policy on the remuneration of senior 
executives and the specific remuneration 
package of each director the remuneration 
committee also determines the allocation of 
share options to employees the remuneration 
committee consists of victor wardman chairman 
douglas yates and guy van zwanenberg all 
of whom are nonexecutive directors the 
remuneration committee meetings are also 
attended by invitation by the chief executive
during the year the committee met twice to  
review the share options schemes and the 
remuneration for the fiscal year 201112
going concern
after making enquiries the directors have 
a reasonable expectation that the company 
and the group have adequate resources 
to continue in operational existence for the 
foreseeable future accordingly they continue 
to adopt a going concern basis in preparing 
the group financial statements
further details are disclosed within note 1 
to the financial statements
disclosure of information to auditor
the directors who held office at the date 
of approval of this directors’ report confirm 
that so far as they are each aware there is 
no relevant audit information of which the 
company‘s auditor is unaware and each 
director has taken all the steps that he ought 
to have taken as a director to make himself 
aware of any relevant audit information and 
to establish that the company’s auditor is 
aware of that information
board composition continued
the board’s main roles are to create value 
for the shareholders to approve the group’s 
strategic objectives and to ensure that the 
necessary financial and other resources are 
made available to enable them to meet these 
objectives specific responsibilities reserved  
to the board include setting group strategy 
reviewing operational and financial performance 
approving major acquisitions approving 
appointments to the board and the company 
secretary approving policies relating to 
directors’ remuneration and ensuring that 
a satisfactory dialogue takes place with 
the shareholders
the board met twelve times during the year 
under review at each meeting the board 
receives a report from the chief executive the 
finance director and other directors as required
audit committee
the board has an audit committee which 
consists of douglas yates chairman guy van 
zwanenberg and victor wardman all of whom 
are nonexecutive directors the audit committee 
meets at least twice yearly and is responsible for 
ensuring that the financial performance of the 
group is properly reported and monitored and 
for meeting the auditor and reviewing its reports 
in relation to the financial statements and 
internal control systems the group’s auditor 
does not provide any nonaudit services the 
audit committee meetings are also attended by 
invitation by representatives of the group’s auditor  
the chief executive and the finance director
during the year the committee met twice to 
review the group’s draft financial statement and 
interim results statement prior to board approval 
and to consider the external auditor’s detailed 
reports thereon 27 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
the directors are responsible for keeping 
adequate accounting records that are sufficient 
to show and explain the company’s 
transactions and disclose with reasonable 
accuracy at any time the financial position of 
the company and enable them to ensure that 
the financial statements comply with the 
companies act 2006 they are also responsible 
for safeguarding the assets of the company 
and hence for taking reasonable steps for 
the prevention and detection of fraud and 
other irregularities 
the directors are responsible for the 
maintenance and integrity of the corporate 
and financial information included on the 
company’s website legislation in the uk 
governing the preparation and dissemination of 
financial statements may differ from legislation 
in other jurisdictions
in preparing these financial statements 
the directors are required to
  select suitable accounting policies and then 
apply them consistently
  make judgements and estimates that are 
reasonable and prudent
  for the group financial statements state 
whether applicable ifrss have been followed 
subject to any material departures disclosed 
and explained in the financial statements
  for the parent company financial statements 
state whether applicable uk accounting 
standards have been followed subject to any 
material departures disclosed and explained 
in the financial statements and
  prepare the financial statements on the 
going concern basis unless it is inappropriate 
to presume that the company will continue 
in business
statement of directors’ responsibilities
the directors are responsible for preparing 
the directors’ report and the group and parent 
company financial statements in accordance 
with applicable law and regulations 
company law requires the directors to prepare 
group and parent company financial statements 
for each financial year under that law they have 
elected to prepare the group financial statements 
in accordance with international financial reporting 
standards as recognised by the european union 
ifrss and have elected to prepare the parent 
company financial statements in accordance 
with uk generally accepted accounting practice 
uk accounting standards and applicable law
under company law the directors must not 
approve the financial statements unless they 
are satisfied that they give a true and fair view 
of the state of affairs and profit or loss of the 
group and parent company for that period 
statement of directors’ responsibilities sceptre leisure plc annual report and accounts 2011 28 wwwsceptreleisureplccouk
independent auditor’s report
to the members of sceptre leisure plc
matters on which we are required to report 
by exception
we have nothing to report in respect of the 
following matters where the companies act 2006 
requires us to report to you if in our opinion
  adequate accounting records have not 
been kept by the parent company or 
returns adequate for our audit have not been 
received from branches not visited by us or
  the parent company financial statements are 
not in agreement with the accounting records 
and returns or
  certain disclosures of directors’ remuneration 
specified by law are not made or
  we have not received all the information 
and explanations we require for our audit
paul creasey
senior statutory auditor 
for and on behalf of grant thornton uk llp 
statutory auditor 
chartered accountants 
london 
26 july 2011
that they give a true and fair view our responsibility 
is to audit and express an opinion on the financial 
statements in accordance with applicable law 
and international standards on auditing uk and 
ireland those standards require us to comply 
with the auditing practices board’s apb’s 
ethical standards for auditors
scope of the audit of the financial statements
a description of the scope of an audit of financial 
statements is provided on the apb’s website at 
wwwfrcorgukapbscopeprivatecfm
opinion on financial statements
in our opinion
  the financial statements give a true and fair 
view of the state of the group’s and of the 
parent company’s affairs as at 30 april 2011 and 
of the group’s profit for the year then ended
  the group financial statements have been 
properly prepared in accordance with ifrss 
as adopted by the european union
  the parent company financial statements 
have been properly prepared in accordance 
with united kingdom generally accepted 
accounting practice and
  the financial statements have been prepared 
in accordance with the requirements of the 
companies act 2006
opinion on other matter prescribed by the 
companies act 2006
in our opinion the information given in the 
directors’ report for the financial year for which 
the financial statements are prepared is consistent 
with the financial statements
we have audited the financial statements 
of sceptre leisure plc for the year ended 
30 april 2011 which comprise the consolidated 
statement of comprehensive income the 
consolidated balance sheet the consolidated 
statement of cash flows the consolidated 
statement of changes in equity the parent 
company balance sheet and the related notes 
the financial reporting framework that has 
been applied in the preparation of the group 
financial statements is applicable law and 
international financial reporting standards 
ifrss as adopted by the european union 
the financial reporting framework that has 
been applied in the preparation of the parent 
company financial statements is applicable 
law and united kingdom accounting standards 
united kingdom generally accepted 
accounting practice
this report is made solely to the company’s 
members as a body in accordance with chapter 
3 of part 16 of the companies act 2006 our 
audit work has been undertaken so that we 
might state to the company’s members those 
matters we are required to state to them in an 
auditor’s report and for no other purpose to the 
fullest extent permitted by law we do not accept 
or assume responsibility to anyone other than 
the company and the company’s members 
as a body for our audit work for this report 
or for the opinions we have formed
respective responsibilities of directors 
and auditor
as explained more fully in the statement of 
directors’ responsibilities set out on page 27 
the directors are responsible for the preparation 
of the financial statements and for being satisfied  29 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
consolidated statement of comprehensive income
for the year ended 30 april 2011
           30 april  30 april  
           2011 2010 
continuing operations         note £000 £000
revenue       23  38627  42808 
direct costs       26683   29498 
gross profit       3  11944  13310 
distribution costs        37  93
administrative expenses – normal        9477  9748 
administrative expenses – exceptional items      4 375   803
lossprofit on disposal of tangible and intangible assets       59   535
operating profit       35  2746  3201 
operating profit before exceptional items       2371   4004 
exceptional items      4 375   803 
finance income       7  170  124
finance costs       8 1276   1414
net finance expense       1106   1290
profit before taxation       1640   1911
tax expense      9  205  293 
profit and total comprehensive income for the financial year      1435   1618
profit and total comprehensive income attributable to   
– equity holders of the parent        1413  1587
– noncontrolling interest       22   31 
        1435  1618 
earnings per ordinary share   
– basic       11 25p   30p 
– diluted       11  24p  28p
the accompanying accounting policies and notes form an integral part of these financial statements sceptre leisure plc annual report and accounts 2011 30 wwwsceptreleisureplccouk
        30 april 2011  30 april 2010  
        note £000 £000 £000 £000
assets     
noncurrent assets     
intangible assets     12 6231   5675 
property plant and equipment     13  27302  26975  
total noncurrent assets      33533  32650 
current assets     
inventories    15  1306  1276  
trade and other receivables    16 5266   5771 
cash and cash equivalents     17 1366   4163  
total current assets       7938  11210
total assets       41471  43860 
liabilities     
current liabilities     
trade and other payables     18 7722   7533  
corporation tax      52  612 
interestbearing loans and borrowings    19 8373   7887 
total current liabilities       16147  16032 
noncurrent liabilities     
trade and other payables     18  1289  130 
interestbearing loans and borrowings     20 6404   12193 
deferred taxation    21 2502   1976 
derivative financial instruments     22  120  290 
total noncurrent liabilities      10315  14589 
total liabilities       26462  30621
net assets       15009  13239 
equity
share capital     25   5466  5394 
share premium account     26  5168   4840
merger reserve     26  2232   2232 
retained earnings    26  6514   5166 
equity attributable to equity holders of the parent       14916  13168
noncontrolling interest     26   93  71
total equity      15009   13239 
these financial statements were approved and authorised for issue by the board of directors on 26 july 2011 and were signed on its behalf by
kenneth turner
director
sceptre leisure plc
the accompanying accounting policies and notes form an integral part of these financial statements
consolidated balance sheet
at 30 april 2011
company no 031897 47 31 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
        30 april 2011  30 april 2010  
        note £000 £000 £000 £000
cash flows from operating activities       
profit before taxation      1640  1911  
adjustments for     
depreciation     13  9047  9344  
amortisation     12 672   372  
recognition of negative goodwill    14 670   225 
impairment of intangible assets brand names    12  49  227  
equitysettled share options     24 97   131 
lossprofit on disposal of property plant and equipment and  intangible assets   59   535 
finance gain on derivative financial instruments     7 170  124  
finance costs    8 1276   1414  
cash flows from operating activities before changes in working capital    12000   12515 
changes in working capital     
increase in inventories      30   180
decreaseincrease in trade and other receivables      505   946
increasedecrease in trade and other payables      1348   2612
cash generated from operations       13823  8777 
finance costs    8   1276  1414
income tax paid      622   250 
net cash from operating activities      11925   7113
cash flows from investing activities     
purchase of business net of cash acquired    14  800  996  
purchase of property plant and equipment     13 9002   12389  
sale of property plant and equipment and intangible assets      383  4557  
net cash used in investing activities      9419   8828 
cash flows from financing activities     
movement in bank loans and loan notes      3200  2775  
revolving credit facility repaymentsdrawdowns      2200  5999  
net finance lease rental drawdownspayments      567  1576 
equity dividends paid     10  —  100  
new shares issued     —   5497 
net cash used ingenerated from financing activities      4833   7045
net decreaseincrease in cash and cash equivalents      2327   5330 
cash and cash equivalents at start of period       3693  1637 
cash and cash equivalents at end of period     17  1366   3693
the accompanying accounting policies and notes form an integral part of these financial statements
consolidated statement of cash flows
for the year ended 30 april 2011 sceptre leisure plc annual report and accounts 2011 32 wwwsceptreleisureplccouk
consolidated statement of changes in equity
at 30 april 2011
          equity   
          attributable   
       share    to equity  non  
      share  premium merger  retained holders of controlling total 
      capital account reserve earnings the parent interest equity 
30 april 2010     £000 £000 £000 £000 £000 £000 £000
at 1 may 2009   4554  173  2332  3485  5880  40  5920
net proceeds from the issue of ordinary shares   830  4667 — —  5497 — 5497
shares issued on the acquisition of australian 8 ball company limited  10  — 100  —  110 —  110
employee sharebased payments   —  —  —  131  131  —  131
taxation effect of employee sharebased payment  — — — 37 37 — 37
transactions with owners   840  4667  100  94  5701  — 5701
profit for the financial year and total comprehensive income   — — — 1587 1587 31 1618
at 30 april 2010   5394  4840  2232  5166  13168  71  13239
          equity   
          attributable   
       share    to equity  non  
      share  premium merger  retained holders of controlling total 
      capital account reserve earnings the parent interest equity 
30 april 2011     £000 £000 £000 £000 £000 £000 £000
at 1 may 2010   5394 4840 2232  5166 13168  71 13239 
shares issued on the acquisition of the trade and assets 
of rv smith leisure limited note 14  72 328 — — 400 — 400
employee sharebased payments  — — — 97 97 — 97
taxation effect of employee sharebased payment  —  — —  162 162  — 162 
transactions with owners  72  328 —  65 335 — 335
profit for the financial year and total comprehensive income   — — — 1413 1413 22 1435
at 30 april 2011  5466  5168 2232  6514 14916  93 15009
the accompanying accounting policies and notes form an integral part of these financial statements 33 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
notes
forming part of the financial statements
1 accounting policies
basis of preparation
sceptre leisure plc is a company registered and resident in england and wales
these financial statements were authorised for issue by the board of directors on 26 july 2011
the group financial statements consolidate those of the company and its subsidiaries together referred to as the “group”
the parent company financial statements present information about the company as a separate entity and not about its group
the group financial statements have been prepared and approved by the directors in accordance with international financial reporting standards 
as adopted by the eu “adopted ifrss” the company has elected to prepare its parent company financial statements in accordance with uk gaap 
these are presented on pages 66 to 72
the accounting policies set out below have unless otherwise stated been applied consistently to all periods presented in these group financial statements
significant accounting estimates and judgements made by the directors in the application of these accounting policies that have significant effect 
on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 30
standards and interpretations effective in the current period
adoption of new accounting standards
the group has adopted the following new interpretations revisions and amendments to ifrs issued by the international accounting standards board 
which are relevant to and effective for the group’s financial statements for the annual period beginning 1 may 2010
  ifrs 3 business combinations revised 2008
  revised ias 27 consolidated and separate financial statements
  annual improvements 2009
ifrs 3 business combinations revised 2008 effective from 1 july 2009
the standard is applicable for business combinations occurring in reporting periods beginning on or after 1 july 2009 and has been applied prospectively 
the new standard introduces changes to the accounting requirements for business combinations but still requires use of the purchase method 
consequently the group has adopted ifrs 3 business combinations revised 2008 in its consolidated financial statements the adoption of this standard has 
affected the financial position and profits of the group for the year ended 30 april 2011 as a result of the acquisition of the trade and assets of rv smith leisure 
the standard required the group to charge acquisition expenses associated with the rv smith transaction totalling £34000 to the profit or loss as incurred
revised ias 27 consolidated and separate financial statements effective from 1 july 2009
the revised standard introduces changes to the accounting requirements for the loss of control of a subsidiary and for changes in the group’s interest 
in subsidiaries the standard has had no impact on the financial statements for the year ended 30 april 2011  sceptre leisure plc annual report and accounts 2011 34 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
1 accounting policies continued
standards and interpretations effective in the current period continued
adoption of new accounting standards continued
annual improvements 2009 effective from 1 july 2009 and later
the iasb has issued improvements for international financial reporting standards 2009 most of these amendments become effective in annual periods 
beginning on or after 1 july 2009 or 1 january 2010 the standard has had no impact on the financial statements for the year ended 30 april 2011
going concern
the group’s business activities together with the factors likely to affect its future development performance and position are set out in the group 
directors’ report on pages 24 to 26 the financial position of the group its cash flows and liquidity position are described in the financial review on 
pages 17 to 19 in addition note 28 to the financial statements includes the group’s objectives policies and processes for managing its capital its financial 
risk management objectives details of its financial instruments and hedging activities and its exposures to credit risk and liquidity risk
the group meets its daytoday working capital requirements from a bank loan and overdraft facility together with revolving credit and asset finance 
facilities from various providers the majority of the group’s banking facilities remain available to the group until 2014 the current economic conditions 
create uncertainty particularly over a the level of demand for the group’s products and services and b the availability of bank and asset finance in the 
foreseeable future
the directors have prepared trading and cash flow forecasts to 30 april 2013 the forecasts make assumptions in respect of future trading conditions and 
in particular the directors’ estimates of number of machines operated and the income derived therefrom the forecasts take into account the amended 
facilities agreed with lloyds banking group on 28 june 2011 disclosed in note 32 to the accounts which had the effect of deferring the repayment date 
of the revolving credit facility originally due in june 2012 by combining the existing term loan and increasing the repayment period to april 2014
taking into account sensitivities in relation to income derived from the number of machines operated reduction in cost base and covenant compliance 
the prepared forecasts suggest that the group retains sufficient headroom within the revised facilities that are available to it for a period in excess of one 
year from the date of approval of these financial statements
after making enquiries and considering the uncertainties described above the directors have a reasonable expectation that the company and the group 
have adequate resources to continue in operational existence for the foreseeable future accordingly they continue to adopt the going concern basis in 
preparing the annual report and financial statements
  35 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
1 accounting policies continued
measurement convention
the financial statements are prepared on the historical cost basis except that derivative financial instruments are stated at their fair value
basis of consolidation
reverse acquisition accounting
the financial statements of the group for the year ended 30 april 2011 comprise sceptre leisure plc the “company” and its subsidiaries together 
referred to as the “group”
on 29 september 2008 the company then named gamingking plc became the legal parent company of orb holdings limited parent company 
of sceptre leisure solutions limited in a share for share transaction due to the relative values of the companies the former orb holdings limited 
shareholders became the majority shareholders with 85 of the enlarged share capital following the transaction the company’s continuing operations 
and executive management were predominantly those of orb holdings limited accordingly the substance of the combination was that orb holdings 
limited acquired gamingking plc in a reverse acquisition as part of the business combination gamingking plc changed its name to sceptre leisure plc
subsidiaries
subsidiaries are entities controlled by the group control exists when the group has the power directly or indirectly to govern the financial and 
operating policies of an entity so as to obtain benefits from its activities in assessing control potential voting rights that are currently exercisable or 
convertible are taken into account the financial statements of subsidiaries are included in the consolidated financial statements from the date that 
control commences until the date that control ceases unrealised gains on transactions between the group and its subsidiaries are eliminated 
unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred amounts reported in the 
financial statements of subsidiaries have been adjusted where necessary to ensure consistency with accounting policies adopted by the group
functional currency
the presentational currency adopted by the group is sterling £ the functional currency of all group companies is sterling £
classification of financial instruments issued by the group
financial instruments issued by the group are treated as equity only to the extent that they meet the following two conditions
a  they include no contractual obligations upon the group to deliver cash or other financial assets or to exchange financial assets or financial liabilities 
with another party under conditions that are potentially unfavourable to the group and
b  where the instrument will or may be settled in the company’s own equity instruments it is either a nonderivative that includes no obligation to 
deliver a variable number of the company’s own equity instruments or is a derivative that will be settled by the company exchanging a fixed amount 
of cash or other financial assets for a fixed number of its own equity instruments
nonderivative financial instruments
nonderivative financial instruments comprise loans and receivables and financial liabilities
loans and receivables
loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted on an active market and are 
recognised initially at fair value subsequent to initial recognition they are measured at amortised cost less any impairment losses an assessment 
of whether a receivable is impaired is made at each reporting date for receivables this is based on the latest credit information available ie recent 
counterparty defaults and external credit information financial assets that are substantially past due are also considered for impairment
the recoverable amount of the group’s receivables carried at amortised cost is calculated as the present value of estimated future cash flows discounted 
at the original effective interest rate ie the effective interest rate computed at initial recognition of these financial assets receivables with a short 
duration are not discounted sceptre leisure plc annual report and accounts 2011 36 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
1 accounting policies continued
classification of financial instruments issued by the group continued
financial liabilities
financial liabilities are obligations to pay cash or other financial assets and are recognised when the group becomes a party to the contractual provisions 
of the instrument the group has no financial liabilities categorised as at fair value through profit or loss
financial liabilities are measured at fair value on initial recognition and subsequently recorded at amortised cost using the effective interest method with 
interestrelated charges recognised as an expense in finance costs in the profit and loss finance charges including premiums payable on settlement or 
redemption and direct issue costs are charged to the statement of comprehensive income on an accruals basis using the effective interest method and are 
added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise
cash and cash equivalents
cash and cash equivalents comprise cash balances and call deposits bank overdrafts that are repayable on demand and form an integral part of the 
group’s cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow statement
property plant and equipment
property plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses
where parts of an item of property plant and equipment have different useful lives they are accounted for as separate items of property plant and equipment
leases in which the group assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases leased assets 
acquired by way of finance lease are stated at an amount equal to the lower of their fair value and the present value of the minimum lease payments  
at inception of the lease less accumulated depreciation and less accumulated impairment losses lease payments are accounted for as described below
depreciation is charged to the profit or loss on a straight line basis over the estimated useful lives of each part of an item of property plant and 
equipment the estimated useful lives are as follows
  short leasehold property    3–10 years
  plant and machinery including machines  2–10 years
  fixtures fittings and equipment    3–5 years
  motor vehicles     3–4 years
depreciation methods useful lives and residual values are reviewed at each balance sheet date
intangible assets and goodwill
goodwill
all business combinations are accounted for by applying the purchase method goodwill represents the difference between fair value of the consideration 
transferred and the net fair value of the identifiable assets liabilities and contingent liabilities acquired identifiable intangibles are those which can be sold 
separately or which arise from legal rights regardless of whether those rights are separable
goodwill is stated at cost less any accumulated impairment losses goodwill is allocated to cashgenerating units and is not amortised but is tested 
annually for impairment
any gain on bargain purchase arising on an acquisition is recognised immediately in profit or loss
customer contracts and relationships
on business combinations where there are legally binding machine rental contracts with customers the group initially recognises those contracts at fair 
value by reference to the incremental contribution inherent in those contracts the incremental contribution is calculated by reference to incremental 
cash flows and is based on the fair value that a market participant would expect to pay for an intangible asset the directors have reviewed each 
contractual relationship acquired and their assessment is summarised below 37 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
1 accounting policies continued
intangible assets and goodwill continued
customer contracts and relationships continued
crown leisure limited
the contractual customer relationships acquired in the crown leisure limited acquisition are being amortised over 18 years being the estimated 
useful economic life of the asset and was derived from a review of the historical length of supply for all major customers noncontractual customer 
relationships were also acquired at the time of the crown leisure acquisition and their useful economic life was estimated to be five years on which 
basis they were included in the overall valuation of customer contracts and relationships acquired on the grounds of materiality
gamingking plc
the customer contracts and relationships acquired in the gamingking plc reverse acquisition are being amortised over 20 years being the estimated 
useful economic life of the asset after assessing the stability of the company’s customer relationships due to acquired company’s market leadership
australian 8 ball company limited
the customer contracts and relationships acquired in the australian 8 ball company limited acquisition are being amortised over five years being the 
estimated useful economic life of the asset this was derived from a review of the historical length of supply for all major customers adjusted to take 
into account those with whom the group already had a trading relationship where a trading relationship with a major customer of australian 8 ball 
company limited was already in existence the customer in question was assessed as being equivalent to a noncontractual relationship 
rv smith leisure limited
the customer contracts and relationships acquired with the trade and assets of rv smith leisure limited are being amortised over five years being the 
estimated useful economic life of the asset this was derived from a review of the historical length of supply for all major customers adjusted to take into 
account those with whom the group already had a trading relationship where a trading relationship with a major customer of rv smith leisure limited 
was already in existence the customer in question was assessed as being equivalent to a noncontractual relationship the overall value of customer 
contracts and relationships acquired created a gain on bargain purchase amount of £670000 which was recognised immediately as profit in accordance 
with the group’s accounting policies the acquisition of the trade and assets of rv smith leisure limited is disclosed in note 14 to the accounts
brands
the value of brands acquired in relation to the acquisition of gamingking plc has been calculated as a net present value on a relief from royalty basis 
these brands were tested for impairment at 30 april 2011 and an impairment loss of £49000 has been recognised in the consolidated statement of 
comprehensive income
other intangible assets
expenditure on internally generated goodwill and brands is recognised in the statement of comprehensive income as an expense as incurred
other intangible assets that are acquired by the group are stated at cost less accumulated amortisation and accumulated impairment losses
amortisation
amortisation is charged to the statement of comprehensive income on a straight line basis over the estimated useful lives of intangible assets unless 
such lives are indefinite intangible assets with an indefinite useful life and goodwill are systematically tested for impairment at each balance sheet date 
other intangible assets are amortised from the date they are available for use the estimated useful lives are as follows
  customer contracts and relationships  5–20 years
  brand names     20 years
inventories
inventories are stated at the lower of cost and net realisable value on a first in first out basis for finished goods cost is taken as cost incurred to date 
which includes an appropriate proportion of directly attributable overheads net realisable value is determined as estimated selling price less all costs 
of completion
provision is made where necessary for obsolete slowmoving inventory where it is deemed that the costs incurred may not be recoverable sceptre leisure plc annual report and accounts 2011 38 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
1 accounting policies continued
impairment of goodwill other intangibles and property plant and equipment
the carrying amounts of the group’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment 
if any such indication exists the asset’s recoverable amount is estimated
goodwill is tested annually for impairment
for goodwill an impairment loss is recognised whenever the carrying amount of the cashgenerating unit to which it is allocated exceeds its recoverable 
amount impairment losses are recognised in the profit or loss
impairment losses recognised in respect of cashgenerating units are allocated first to reduce the carrying amount of any goodwill allocated to cashgenerating 
units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis a cashgenerating unit is the smallest identifiable group 
of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets
calculation of recoverable amount
the recoverable amount of other assets is the greater of their fair values less costs to sell and valueinuse in assessing valueinuse the estimated 
future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of 
money and the risks specific to the asset
for an asset that does not generate largely independent cash inflows the recoverable amount is determined for the cashgenerating unit to which the 
asset belongs
reversals of impairment
an impairment loss in respect of a receivable carried at amortised cost is reversed if the subsequent increase in recoverable amount can be related 
objectively to an event occurring after the impairment loss was recognised
an impairment loss in respect of goodwill is not reversed
in respect of other assets an impairment loss is reversed when there is an indication that the impairment loss may no longer exist and there has been 
a change in the estimates used to determine the recoverable amount
an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been 
determined net of depreciation or amortisation if no impairment loss had been recognised
employee benefits
defined contribution plans
a defined contribution plan is a postemployment benefit plan under which the company pays fixed contributions into a separate entity and will have 
no legal or constructive obligation to pay further amounts obligations for contributions to defined contribution pension plans are recognised as an 
expense in the statement of comprehensive income as incurred 39 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
1 accounting policies continued
shortterm benefits
shortterm employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided a liability is 
recognised for the amount expected to be paid under shortterm cash bonus or profitsharing plans if the group has a present legal or constructive 
obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably
sharebased payment transactions
the grant date fair value of options granted to employees is recognised as an employee expense with a corresponding increase in equity over the 
period in which the employees become unconditionally entitled to the options the fair value of the options granted is measured using an option 
valuation model blackscholes taking into account the terms and conditions upon which the options were granted the amount recognised as 
an expense is based on the best estimate of the number of shares expected to vest
provisions
a provision is recognised in the balance sheet when the group has a present legal or constructive obligation as a result of a past event that can 
be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation provisions are determined 
by discounting the expected future cash flows at a pretax rate that reflects risks specific to the liability
revenue
revenue is measured at the fair value of the consideration received or receivable and represents amounts for goods supplied and services provided 
by the group excluding intragroup transactions and value added tax
machine sales and rentals
machine sales revenue is recognised when goods are delivered to customers machine rental revenue is recognised on a weekly basis for machines 
placed at customers’ premises representing an arrangement to supply services where an accounting date falls between weekly charging periods 
income is calculated accrued and recognised from the date of the last charging period to the accounting date 
sale of lottery indoor gaming and leisure products
revenue from the sale of lottery gaming and indoor leisure products is recognised at the point of delivery to the customer
operation of lotteries on behalf of charities
revenue from the operation of lotteries on behalf of charities is recognised on a weekly basis for lottery ticket vending terminals placed at customers’ 
premises where tickets are vended manually revenue is recognised at the point of sale to the customer
expenses
operating lease payments
payments made under operating leases are recognised in the profit or loss on a straight line basis over the term of the lease lease incentives received 
are recognised in the profit or loss as an integral part of the total lease expense
finance lease payments
minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability the finance charge is allocated 
to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability  sceptre leisure plc annual report and accounts 2011 40 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
1 accounting policies continued
expenses continued
finance income and cost
finance expense comprises interest payable finance charges on finance leases and decreases in the fair value of derivative financial instruments 
finance income comprises interest receivable on funds invested and increases in the fair value of derivative financial instruments
interest income and interest payable is recognised in profit or loss as it accrues using the effective interest method dividend income is recognised 
in the statement of comprehensive income on the date the entity’s right to receive payments is established
foreign currency translation
foreign currency transactions are translated into the functional currency of the respective group entity using the exchange rates prevailing at the dates of 
the transactions spot exchange rate foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement 
of monetary items at yearend exchange rates are recognised in profit or loss
nonmonetary items measured at historical cost are translated using the exchange rates at the date of the transaction not retranslated nonmonetary 
items measured at fair value are translated using the exchange rates at the date when fair value was determined
exceptional items
exceptional items are those that in management’s view need to be disclosed by virtue of their size or incidence such items are included on the statement 
of comprehensive income under a caption to which they relate and are separately disclosed in note 4 to the consolidated financial statements
taxation
tax on the profit or loss for the year comprises current and deferred tax tax is recognised in the statement of comprehensive income except to the 
extent that it relates to items recognised directly in equity in which case it is recognised in equity
tax relating to items recognised in other comprehensive income is recognised in other comprehensive income
current tax is the expected tax payable on the taxable income for the year using tax rates enacted or substantively enacted at the balance sheet date 
and any adjustment to tax payable in respect of previous years
deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts 
used for taxation purposes the following temporary differences are not provided for the initial recognition of goodwill the initial recognition of assets or 
liabilities that affect neither accounting nor taxable profit other than in a business combination and differences relating to investments in subsidiaries to 
the extent that they will probably not reverse in the foreseeable future the amount of deferred tax provided is based on the expected manner of realisation 
or settlement of the carrying amount of assets and liabilities using tax rates enacted or substantively enacted at the balance sheet date
a deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary 
difference can be utilised
standards and interpretations in issue not yet effective
at the date of authorisation of these consolidated financial statements there were a number of standards and interpretations that have not been 
applied in these consolidated financial statements which were in issue but not yet effective
revised ias 24 related party transactions effective from 1 january 2011
the revised standard introduces exemptions from ias 24’s disclosure requirements for transactions with a government that has control joint control 
or significant influence over the reporting entity and governmentrelated entities the revised standard also broadens the definition of related parties 
based on transactions currently undertaken by the group the revised standard is not expected to have a significant effect on the consolidated 
financial statements 41 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
1 accounting policies continued
standards and interpretations in issue not yet effective continued
ifrs 9 financial instruments effective from 1 january 2013
the iasb aims to replace ias 39 financial instruments recognition and measurement in its entirety by the end of 2010 with the replacement standard 
to be effective for annual periods beginning 1 january 2013 ifrs 9 is the first part of phase 1 of this project the main phases are
  phase 1 classification and measurement
  phase 2 impairment methodology
  phase 3 hedge accounting
the revised standard is not expected to have a significant effect on the consolidated financial statements
2 revenue
           30 april 30 april 
           2011 2010 
revenue           £000 £000
equipment sales        370 377 
machine rental        35013 38755 
sale of lottery indoor gaming and leisure products       3244  3676 
total revenues        38627 42808
3 segmental report
the accounting policy for identifying segments is based on internal management reporting information that is regularly reviewed by the chief operating 
decision maker the board of directors the board of directors manages the group in three business segments
  machine sales and rental sceptre leisure solutions
  the sale of lottery indoor gaming and other products lotteryking kelly’s eye and party house and
  the operation of lotteries on behalf of charities creative lotteries
during the periods under review over 90 of the group’s activities related to machine sales and rental and therefore the remaining segments are not 
reportable as they do not meet the quantitative thresholds they have been combined and disclosed as ‘all other segments’
all revenue reported in the period under review arose within the united kingdom
the accounting policies applied to intersegment transactions are consistent with those disclosed in note 1 to the financial statements
the measurement policies the group uses for segment reporting under ifrs 8 are the same as those used in the financial statements
segment performance is monitored monthly as part of the management reporting process the financial performance for each segment is analysed 
and consolidation adjustments to reach the group results are shown separately sceptre leisure plc annual report and accounts 2011 42 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
3 segmental report continued
     machine    machine    
     sales  central 2011 sales  central 2010 
     and rental other corporate group and rental other corporate group 
segmental analysis    £000 £000 £000 £000 £000 £000 £000 £000
external revenue 35383 3244 — 38627  39132  3676  —  42808
intersegment revenue  — — — — —  —  —  —
net revenue  35383 3244 — 38627 39132  3676 — 42808 
gross profit  10058 1886 — 11944 11060  2250   — 13310 
operating profitloss  3888  204  938  2746  5080  978  901  3201
segment assets  35140  6266 65 41471  38750  4986  124  43860
segment liabilities 20736  1757  3969  26462   23066  1325  6230  30621
other segment information        
capital expenditure note 13  8846 156 — 9002 11541  848 —  12389 
intangible assets – additions note 12 1277 — — 1277  1546  —  —  1546
depreciation note 13 8720 327 — 9047  9015  329 —  9344 
amortisation note 12  524 148 — 672 249  123  — 372
interest expense note 8  1276 — — 1276 1404 10 — 1414
impairment note 12  — 49 — 49 —  227  — 227
equitysettled share options note 24 49 9 39 97  59  27  45  131
finance gain on derivative  
financial instruments note 22 170 — — 170 124 —  —  124
during the year two customers contributed more than 10 of group revenues both within the “machine sales and rental” segment
  customer a – revenue £61m 159 2010 £66m 155 and
  customer b – revenue £57m 149 2010 £63m 148
4 exceptional items
           30 april  30 april  
           2011 2010 
           £000 £000
restructuring and redundancy        132 195 
provision for rentals and business rates on onerous leases       —  452 
impairment of intangible assets – brands        49 227 
recognition of gain on bargain purchase       670  225
professional and financial expenses relating to corporate restructuring       114 154
exceptional items creditcost        375 803  43 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
5 expenses and auditor’s remuneration
included in profitloss are the following
           30 april  30 april  
           2011 2010 
           £000 £000
depreciation and amounts written off property plant and equipment  
owned assets        6731 6803
leased assets       2316  2541 
amortisation of brand names customer contracts and relationships       672 372
operating lease charges – property rentals       367 368 
operating lease charges – other       532  642
foreign exchange differences       —  2
lossprofit on disposal of property plant and equipment and intangible assets  
sale of fixed odds betting terminal property plant and equipment and intangible assets    —  767
sale of other property plant and equipment        59 232
property lease charges above are stated net of sublet income the amount of which was £5000 2010 £9000
auditor’s remuneration
           30 april  30 april  
           2011 2010 
           £000 £000
audit services  
audit of these financial statements       15  14 
other services  
audit of financial statements of subsidiaries pursuant to legislation       42 35
        57 49 
amounts paid to the company’s auditor and its associates in respect of services to the company other than the audit of the company’s financial 
statements have not been disclosed as the information is required instead to be disclosed on a consolidated basis sceptre leisure plc annual report and accounts 2011 44 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
6 staff numbers and costs
the average number of persons employed by the group including directors during the year analysed by category was as follows
           30 april  30 april  
           2011 2010
administration and management        117 112
other operatives       301  327 
        418 439 
the aggregate payroll costs of these persons were as follows
           30 april  30 april  
           2011 2010 
           £000 £000
wages and salaries       7655  8211 
social security costs       668  690
share option cost       97  131 
pension costs       111  105 
        8531 9137
key management
the aggregate compensation of key management including executive directors is shown below
           30 april  30 april  
           2011 2010 
           £000 £000
salaries and shortterm employee benefits       678  623
share option charge       59  88 
pension costs       66  62 
total emoluments        803 773 
           30 april  30 april  
           2011 2010 
directors’ remuneration          £000 £000
emoluments        396 406
share option charge        39 59 
money purchase pension contributions        34 38
sums paid to third parties for directors’ services        38 30 
total emoluments       507  533 
no share options were exercised by directors during the year
£38000 2010 £30000 was paid to vz limited in respect of services provided to the group by guy van zwanenberg vz limited is controlled 
by guy van zwanenberg a director of sceptre leisure plc 45 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
6 staff numbers and costs continued
key management continued
directors’ emoluments disclosed above include the following payments
           30 april  30 april  
           2011 2010 
highest paid director          £000 £000
emoluments       180  130 
money purchase pension contributions       23  18 
total emoluments       203  148
the number of directors to whom retirement benefits are accruing under
           30 april  30 april  
           2011 2010 
           number number
money purchase pension schemes       2  3
7 finance income
           30 april  30 april  
           2011 2010 
           £000 £000
change in fair value of derivative financial instruments note 22      170 124
8 finance costs
           30 april  30 april  
           2011 2010 
           £000 £000
on bank loans loan notes and overdrafts        638 754 
on finance leases        638 660 
        1276 1414 
9 taxation
      
 30 april 2011  30 april 2010
recognised in the statement of comprehensive income      £000  £000  £000  £000
current tax expense    
current year      56  863 
adjustments for prior years      6  1158 
current tax expense      62   295 
deferred tax expense    
origination and reversal of temporary differences      144  365 
adjustments in respect of previous years     1   953 
deferred tax expense       143  588 
total tax expense       205  293 sceptre leisure plc annual report and accounts 2011 46 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
9 taxation continued
           30 april  30 april 
           2011 2010 
reconciliation of effective tax rate         £000 £000
profit before tax        1640 1911 
profit before tax multiplied by standard rate of corporation tax in the uk of 2784 2010 28    457  535
effects of
expenses not deductible for tax purposes        115 61 
income not taxable        193 63
adjustments in respect of previous years        5 205
movement in unrecognised deferred tax assets       5  34
rate change       167 — 
small company relief       7  1 
total tax expense        205 293
the above tax rate change represents a change in the level of deferred tax from 28 to 26
10 dividends
the directors do not recommend the payment of a dividend in respect of the current year 2010 nil
11 earnings per ordinary share
the calculations of earnings per share are based on the following profits and number of shares
         basic diluted basic diluted 
         30 april 30 april 30 april 30 april 
          2011  2011  2010  2010 
         £000 £000 £000 £000
profit for the financial year      1413 1413 1587  1587
additional disclosures
exceptional administrative creditsexpense     375 375 803  803
taxation effect of exceptional administrative expenses     98 98  225  225
profit for the financial year before exceptional expenses      1136 1136 2165  2165 
           30 april 30 april 
            2011  2010 
           number of number of 
           shares shares
weighted average number of shares  
for basic earnings per share        56150853 52426333 
share options        3936554 3617694 
for diluted earnings per share        60087 407 56044027  47 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
11 earnings per ordinary share continued
the group’s earnings per share are as follows
           30 april 30 april 
            2011  2010 
           pence  pence 
basic        25 30 
diluted       24 28
basic before exceptional expenses        20 41
diluted before exceptional expenses        19 39 
the total number of shares in issue at 30 april 2011 was 56989585
12 intangible assets
          customer   
          contracts and brand  
         goodwill relationships names total 
         £000 £000 £000 £000
cost    
balance at 1 may 2009      61  4629  500  5190
acquisitions through business combinations      — 1546  — 1546
disposals     — 228 — 228
balance at 30 april 2010      61  5947 500  6508
balance at 1 may 2010      61  5947  500  6508
acquisitions through business combinations note 14     — 1277 — 1277
balance at 30 april 2011      61 7224 500 7785
amortisation and impairment    
balance at 1 may 2009      — 252  14  266
charged in the year      — 347  25  372
disposals     — 32 — 32
impairment     — — 227 227
balance at 30 april 2010      —  567  266  833
balance at 1 may 2010      —  567  266  833
charged in the year      — 647 25 672
impairment      — — 49 49
balance at 30 april 2011      — 1214 340 1554
net book value    
at 29 april 2009       61  4377  486  4924
at 30 april 2010     61  5380  234  5675
at 30 april 2011      61 6010 160 6231 sceptre leisure plc annual report and accounts 2011 48 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
12 intangible assets continued
goodwill and intangible asset impairment
goodwill and intangible assets acquired in a business combination are allocated to the cashgenerating units that are expected to benefit from that 
business combination
goodwill is not amortised but is tested annually for impairment to the extent that the carrying value of the cashgenerating unit exceeds the 
valueinuse determined from estimated discounted future net cash flows goodwill is written down to the valueinuse and an impairment charge 
is recognised
during the year goodwill was tested for impairment in accordance with ias 36 impairment of assets the recoverable amount for the cashgenerating 
unit exceeded the carrying amount of goodwill recorded the recoverable amount for the cashgenerating unit has been measured on a valueinuse 
calculation goodwill is allocated to the machine sales and rental cashgenerating unit
the key assumptions for the valueinuse calculation using projected cash flows based on forecasts approved by management performed for a fiveyear 
period are those regarding the discount rates growth rates and expected changes to selling price and direct costs during the period a growth rate of 1 
2010 1 was used in the calculation over the fiveyear period a pretax discount rate of 1032 2010 875 was used in the valueinuse calculation 
changes in selling prices and direct costs are based on management’s expectations of future changes in the market the assumptions used in these 
calculations have historically proved to be materially accurate
during the year intangible assets were tested for impairment the review suggested that the lotteryking and kelly’s eye brand names acquired in the 
gamingking reverse acquisition had suffered impairment on a valueinuse basis and an impairment charge of £49000 was recognised in the statement 
of comprehensive income within exceptional administrative expenses amortisation of intangible assets is included within normal administrative 
expenses in the statement of comprehensive income
the key assumptions for the value in use calculation for the lotteryking and kelly’s eye brands were based upon a theoretical 2 royalty rate the active 
level of customers as at 30 april 2011 a discount rate of 1032 and a decline in margins of 154 the review indicated that any further potential decline 
in margins would give rise to a further impairment and the sensitivity analysis highlighted that a decline of 24 would give rise to an additional £50000 
impairment charge
all other impairment review sensitivity analyses indicated that no reasonably foreseeable change in key assumptions would give rise to further 
impairment charges 49 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
13 property plant and equipment
        short  fixtures    
        leasehold plant and fittings and motor 
        property machinery equipment vehicles total 
        £000 £000 £000 £000 £000
cost     
balance at 1 may 2009     253  35922  1219  1082  38476
acquisitions     — 769  7  124  900
additions     226  11795  123  245  12389
disposals     —  8407  96  91  8594
balance at 30 april 2010     479  40079  1253  1360  43171
balance at 1 may 2010     479 40079 1253 1360 43171
acquisitions    — 829 — — 829
additions    33 8670 147 152 9002
disposals     — 5460 720 358 6538
balance at 30 april 2011     512 44118 680 1154 46464
depreciation     
balance at 1 may 2009     72  10752  530  268  11622
charged in the year     72  8687  335  250  9344
disposals     —  4613  96  61  4770
balance at 30 april 2010     144  14826  769  457  16196
balance at 1 may 2010     144 14826 769 457 16196
charged in the year     97 8482 226 242 9047
disposals     — 5169 720 192 6081
balance at 30 april 2011     241 18139 275 507 19162 
net book value     
at 1 may 2009      181  25170  689  814  26854
at 30 april 2010    335  25253  484  903  26975
at 30 april 2011    271 25979 405 647 27302 
the net book value of plant and machinery includes £7 100000 2010 £8511000 in respect of assets held under finance leases depreciation for the year 
on these assets was £2039000 2010 £2258000
the net book value of fixtures fittings and equipment includes £211000 2010 £63000 in respect of assets held under finance leases depreciation for the 
year on these assets was £46000 2010 £62000
the net book value of motor vehicles includes £797000 2010 £885000 in respect of assets held under finance leases depreciation for the year on 
these assets was £231000 2010 £221000 sceptre leisure plc annual report and accounts 2011 50 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
14 acquisitions
acquisition of the trade and assets of rv smith leisure limited
on 29 november 2010 the group acquired the trade and assets of rv smith leisure limited in a cash and shares transaction the shares were issued 
at the market price on the day of completion
            fair value 
            at date of 
            acquisition 
            £000
cash         800
shares in sceptre leisure plc 1444043 ordinary shares of 5p each issued at 277p being market price     400
total consideration         1200
          initial book  fair value 
          value at date fair value at date of 
          of acquisition adjustment acquisition 
          £000 £000 £000
intangible assets note 12       — 1277 1277
property plant and equipment       829  — 829
total assets      829  1277 2106
deferred taxation       — 236  236
total liabilities      —  236  236
net assets       829 1041  1870
fair value of consideration paid        1200
gain on bargain purchase – recognised in exceptional items within profit or loss       670
owing to the immediate and successful integration of the rv smith assets into sceptre leisure solutions it is not possible to determine the profit 
attributable to the acquisition in the financial year nor is it possible to calculate the profit that would have been generated had the acquisition been 
made on 1 may 2010
fair value adjustment
under ifrs 3 at the date of acquisition a value has been applied to identifiable intangible assets that would otherwise have been consumed within 
goodwill the fair value adjustment to intangible assets relates to the value of acquired customer contracts and related relationships and is being 
amortised over five years as management considers that the customer contracts and relationships acquired in the rv smith leisure limited 
acquisition have an estimated useful economic life of that length this was derived from a review of the historical length of supply for all major 
customers adjusted to take into account those with whom the group already had a trading relationship where a trading relationship with a major 
customer of rv smith leisure limited was already in existence the customer in question was assessed as being equivalent to a noncontractual 
relationship the overall value of customer contracts and relationships acquired created a gain on bargain purchase of £670000 which was recognised 
immediately as profit in accordance with the group’s accounting policies the gain on bargain purchase is included in exceptional administrative expenses 
in the statement of comprehensive income the fair value adjustment to deferred taxation relates to the recognition of the customer contracts and 
related relationships asset the primary reason for the business combination was to further strengthen the group’s position in the south of the uk 51 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
15 inventories
           30 april  30 april  
           2011 2010 
           £000 £000
consumables        1048 1020
goods for resale        258 256
        1306 1276 
in 2011 inventories recognised as cost of sales amounted to £09m 2010 £09m inventories are valued on a first in first out fifo basis
16 trade and other receivables
           30 april  30 april  
           2011 2010 
           £000 £000
current assets  
trade receivables        796 1934
other receivables        223 274 
prepayments and accrued income        4247 3563 
        5266 5771 
17 cash and cash equivalents
           30 april  30 april  
           2011 2010 
           £000 £000
current assets  
cash at bank       1366   4163
current liabilities  
bank overdraft        —  470
        1366  3693
18 trade and other payables
           30 april  30 april 
           2011 2010 
           £000 £000
current liabilities  
trade payables       5852  4540
other taxation and social security costs       712  1420 
other payables       167  622 
accruals and deferred income        991 951 
        7722 7533 
noncurrent liabilities  
trade payables       1169  —
other payables       120 130
        1289 130 sceptre leisure plc annual report and accounts 2011 52 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
19 current financial liabilities
           30 april 30 april 
           2011 2010 
           £000 £000
bank overdraft        —  470
bank loans        2500  2450
revolving credit facility       799 — 
unsecured loan notes       750   750
finance leases        4324  4217 
        8373  7887 
20 noncurrent financial liabilities
           30 april 30 april 
           2011 2010 
           £000 £000
bank loans       1250   3750 
revolving credit facility       3000  5999
unsecured loan notes        —  750 
finance leases        2154  1694 
        6404  12193
the fair value of current and noncurrent bank loans and loan notes based on a discounted cash flow analysis of future repayments based on currently 
available borrowing terms and interest rates is £4288000 2010 £7938000
bank loans are secured by fixed and floating charges over the assets of the group
the fair value of current and noncurrent finance leases based on a discounted cash flow analysis of future repayments based on currently available 
borrowing terms and interest rates is £5848000 2010 £5423000
finance lease liabilities
finance lease liabilities are payable as follows
       minimum   minimum 
       lease   lease   
       payments interest principal payments interest principal 
       30 april  30 april  30 april  30 april  30 april  30 april  
       2011 2011 2011 2010 2010 2010 
       £000 £000 £000 £000 £000 £000
less than one year    4753 429 4324  4573  356  4217 
between one and five years    2246 92 2154  1777  83  1694
    6999 521 6478  6350  439  5911 
finance lease payments represent rentals payable by the group for certain of its plant and equipment leases have varying terms and renewal rights 
the above leasing arrangements do not contain any restrictive covenants contingent rents or purchase options security over assets held under finance 
leases is held by the entity providing the facility to which those assets relate 53 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
21 deferred tax liability
           30 april  30 april  
           2011 2010 
           £000 £000
at beginning of year        1976  916 
chargecredit for the year recognised in profit or loss       143   735 
acquisitions note 14       236  409 
on items taken to equity        147  85 
at end of year        2502  1976
the elements of the deferred tax liability are as follows
        assets  liabilities  net
       30 april  30 april  30 april  30 april  30 april  30 april  
       2011 2010 2011 2010 2011 2010 
       £000 £000 £000 £000 £000 £000
intangible assets   —   — 1487   1530 1487  1530
property plant and equipment    —  — 1387  945  1387 945 
other shortterm temporary differences   372   323  —  — 372  323
employee sharebased payments    —  176  —  — —  176 
net tax assetsliabilities    372  499  2874   2475 2502   1976
the group has no unprovided deferred tax liabilities
a deferred tax asset has not been recognised in respect of losses amounting to £314000 2010 £332000
it has been announced that the uk corporation tax rate will reduce from 26 to 23 over a period of three years from 2012 the first reduction in 
the uk tax rate was substantively enacted on 5 july 2011 and will be effective from 1 april 2012 this will reduce the group’s future current tax charge 
accordingly if the rate change from 26 to 25 had been substantively enacted on or before the balance sheet date it would have had the effect of 
reducing the deferred tax liability recognised at that date by £96230 an would have reduced the amount of the total unrecognised deferred tax assets 
at that date by £3136 it has not yet been possible to quantify the full anticipated effect of the announced further 2 rate reduction although this will 
further reduce the group’s future current tax charge and reduce the group’s deferred tax liabilitiesassets accordingly
22 derivative financial instrument
           30 april  30 april  
           2011 2010 
           £000 £000
liabilities  
interest rate collars        120 290 sceptre leisure plc annual report and accounts 2011 54 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
22 derivative financial instrument continued
interest rate collars
the group uses interest rate collars to manage its exposure to interest rate movements on its bank borrowings contracts covering notional amounts 
of £375m 2010 £62m restrict interest payments at rates between 470 and 575 for periods up to 28 september 2012
the fair value of collars is estimated at £nil 2010 £2000 for the cap and a liability of £120000 2010 £292000 for the floor
fair value is calculated by discounting future receipts and payments to present value using current interest rates the main assumption impacting 
on the future profile of receipts and payments under the collar is that relating to future movements in libor
23 retirement benefits
the group operates a defined contribution pension scheme whose assets are held separately from those of the group in independently administered 
funds the group also makes contributions to certain employees’ personal pension plans the assets for which schemes are also held separately from 
those of the group in independently administered funds
the pension charge represents contributions payable in respect of the schemes by the group and amounted to £111000 2010 £105000 contributions 
totalling £nil 2010 £16000 were payable to the funds at the year end and are included in accruals within trade and other payables
24 sharebased payments
on 2 november 2008 the company granted share options to directors and employees over a total of 3701658 ordinary shares of 5p each as detailed 
and disclosed in the admission document dated 2 september 2009 the options granted under the approved scheme vest on 31 october 2012 the 
options granted under the unapproved scheme vested on 31 october 2010
on 6 january 2011 the company granted share options to directors and employees over a total of 1698889 ordinary shares of 5p each as disclosed 
in the rns announcement dated 6 january 2011 the options granted under the approved scheme vest on 5 january 2014 the options granted under 
the unapproved scheme vest on 5 january 2012
the details of the grants are as follows
        method of 2008 grant 2011 grant total  
        settlement number of number of number of  
directorsemployees entitled      accounting instruments  instruments  instruments  exercise period
kenneth turner       equity  533333 300000  833333  31102010 – 05102021
mark white       equity  311111  438889  750000 31102010 – 05102021
douglas yates       equity  111111  50000  161111 31102010 – 05102021
guy van zwanenberg       equity  111111  50000 161111 31102010 – 05102021
victor wardman       equity  66667  50000 116667 31102010 – 05102021
others        equity  2568325  810000 3378325 31102010 – 05102021
total         3701658 1698889 5400547   55 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
24 sharebased payments continued
the number and weighted average exercise prices of share options are as follows
         weighted  weighted  
         average number of average number of 
         exercise price options exercise price options 
         30 april  30 april  30 april  30 april  
         2011 2011 2010 2010
outstanding at the beginning of the year      214p  3617 964  214p  3617964 
forfeited during the year     242p  457535   —  —
granted during the year      242p  1698889   —  —
outstanding at the end of the year      223p  4859048  214p  3617964 
exercisable at the end of the year      225p  1808716  225p  1808716 
there were no share options exercised during the year 2010 nil
the options outstanding at the year end have an exercise price in the range of 195p to 242p and a weighted average contractual life of 82 years
the fair value of services received in return for share options granted are measured by reference to the fair value of share options granted the fair 
value of employee share options is measured using a blackscholes model measurement inputs and assumptions are as follows
         approved scheme  unapproved scheme
         30 april 30 april  30 april  30 april  
          2011   2010 2011 2010
fair value at measurement date      1328p  1071p  1109p   726p
weighted average exercise price     2420p   2023p 2420p  2252p 
expected volatility expressed as  used in the modelling under blackscholes model   8369   8560  9073   7560 
option life expressed as weighted average life used in the modelling under blackscholes model   4 years  4 years 2 years   2 years
expected dividends     200   200 000  000 
riskfree interest rate based on national government bonds     163   115  163  115
the expected volatility is wholly based on historic volatility calculated based on the weighted average remaining life of the share options adjusted for 
any expected changes to future volatility due to publicly available information
the total expenses recognised for the year are as follows
           30 april  30 april  
           2011 2010 
           £000 £000
equitysettled sharebased payment expense       97  131 sceptre leisure plc annual report and accounts 2011 56 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
25 share capital
           30 april 30 april 
            2011  2010 
           £000 £000
authorised  
90000000 2010 90000000 ordinary shares of 5p each       4500 4500
290697869 2010 290697869 deferred shares of 09p each       2616 2616
        7116 7116
allotted called up and fully paid  
56989585 2010 55545542 ordinary shares of 5p each        2850 2778 
290697869 2010 290697869 deferred shares of 09p each      2616  2616
        5466 5394 
during the year 1444043 shares were issued as part of the consideration for the acquisition of trade and assets of rv smith leisure limited on 
29 november 2010
the company’s articles of association set out the rights attaching to each class of share in issue and are available to download at the company’s 
website wwwsceptreleisureplccouk the deferred shares have certain rights and restrictions not applicable to the ordinary shares the deferred 
shares are entitled to receive in each calendar year out of the profits of the company available for distribution in that year and after shareholders have 
received in that calendar year discretionary aggregate dividends of not less than £10 per new ordinary share a fixed noncumulative dividend at the rate 
of 001 per annum on the capital paid up on each deferred share on a windingup of the company after the distribution of £1m in respect of each 
ordinary share there shall be distributed amongst the holders of the deferred shares an amount equal to the nominal value of the deferred shares the 
deferred shares do not confer on the holders thereof any entitlement to receive notice of or to attend or vote at any general meetings of the company 
except as provided above the deferred shares do not confer on the holders thereof any right to participate in the profits or assets of the company
26 reserves
share capital
the share capital account includes the par value for all shares issued and outstanding
share premium account
the share premium account comprises the premium over nominal value on issued shares the use of this reserve is restricted by the companies act 2006
merger reserve
the merger reserve is a reserve established under ifrs 3 business combinations on the deemed acquisition of gamingking plc by orb holdings limited
noncontrolling interest
the noncontrolling interest relates to a minority shareholding in the legal share capital of sceptre leisure solutions limited
retained earnings
the retained earnings reserve includes the accumulated profits and losses arising from the consolidated statement of comprehensive income 
and certain items from the statement of changes in equity attributable to equity shareholders net of distributions to shareholders 57 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
27 capital commitments
there were no capital commitments at the end of the 2011 financial year 2010 £nil
28 financial risk management
financial instruments held by the group as detailed in this note are classified as “loans and receivables“ trade and other receivables “cash and cash 
equivalents“ “financial liabilities measured at amortised cost“ trade and other payables bank overdrafts bank loans and loan notes and “financial 
assets and liabilities at fair value through profit or loss“ derivative instruments under ias 39 financial instruments recognition and measurement 
and “finance leases“ under ias 17 leases
the group’s operations expose it to a variety of financial risks comprising credit risk liquidity risk and interest rate risk the group has in place risk 
management policies that seek to limit the adverse effects on the financial performance of the group by using various instruments and techniques 
risk management policies have been set by the board and applied by the group
a liquidity risk
financial risk management
liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due the group’s approach to managing liquidity is to 
ensure as far as possible that it has sufficient liquidity to meet its liabilities as they fall due with surplus facilities to cope with any unexpected variances 
in timing of cash flows through effective forecasting
the group believes it has sufficient cash and borrowing facilities to meet its operational commitments at the year end the group had the following 
undrawn facilities in respect of which all conditions precedent had been met
           2011 2010 
           £000 £000
undrawn borrowing facilities  
– uncommitted        3131  1310 
– committed       —  —
        3131  1310 
maturity analysis
the following are the contractual maturities of financial liabilities including estimated interest payments and excluding the impact of netting agreements
      carrying contractual 6 months    more than 
      amount cash flows or less 6–12 months 1–2 years 2–5 years 5 years 
30 april 2011     £000 £000 £000 £000 £000 £000 £000
nonderivative financial liabilities       
bank loans and loan notes   4500 4682 1710 1681 1291 — — 
revolving finance facility   3799 4021 62 861 3098 — — 
finance lease liabilities   6478 6999 2642 2111 1921 325 — 
trade and other payables   9063 9063 7193 701 1169 — — 
bank overdrafts   — — — — — — — 
derivative financial liabilities       
interest rate swaps   120 120 120 — — — — 
total   23960 24885 11727 5354 7479 325 —  sceptre leisure plc annual report and accounts 2011 58 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
28 financial risk management continued
a liquidity risk continued
maturity analysis continued
      carrying contractual 6 months    more than 
      amount cash flows or less 6–12 months 1–2 years 2–5 years 5 years 
30 april 2010     £000 £000 £000 £000 £000 £000 £000
nonderivative financial liabilities       
bank loans and loan notes  7700  8579  1814  1780  3468  1517 —
revolving finance facility  5999  6183  2252  52  849  3030  —
finance lease liabilities   5911  6351  2823  1751  1601  176  —
trade and other payables   8275  8275  8145  — — 130  —
bank overdrafts  470  470  470  — —  — —
derivative financial liabilities       
interest rate swaps   290  396  104  84  146  62 —
total  28645 30254 15608 3667 6064 4915 —
included in bank loans and loan notes in 2011 are £750000 2010 £1500000 variable rate unsecured loan notes 2012
b foreign exchange risk
the group does not trade in overseas countries there are few transactions in foreign currencies and therefore the group’s exposure to foreign 
exchange risk is considered to be low
c interest rate risk
the group is subject to fluctuations in interest rates on its borrowings and cash and cash equivalents the group is aware of the financial products 
available to ensure against adverse movements in interest rates formal reviews are undertaken to determine whether such instruments are appropriate 
for the group at 30 april 2011 the group held contracts covering £375m 2010 £62m of interest rate collars which restrict the company borrowing 
rate between 470 and 575 the relevant floating interest rate is gbr – libor with threemonth maturity
the table below shows the group’s financial assets and liabilities split by those bearing fixed and floating rates and those that are noninterest bearing
         fixed floating noninterest  
         rate rate bearing total 
30 april 2011        £000 £000 £000 £000
cash and cash equivalents     — 1366 — 1366 
trade and other receivables      —  —  5266  5266 
trade and other payables      —  —  9063  9063 
bank loans and loan notes     —  4500  — 4500
revolving credit facility      —  3799  —  3799
finance leases      6478  — —  6478
      6478 6933 3797  17208 59 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
28 financial risk management continued
c interest rate risk continued
         fixed floating noninterest  
         rate rate bearing total 
30 april 2010        £000 £000 £000 £000
cash and cash equivalents     —  467 4  — 467 4
trade and other receivables      — — 5771  5771
trade and other payables      — — 8275  8275
bank overdrafts      — 470  — 470
bank loans and loan notes     — 7700 — 7700
revolving credit facility      —  5999 — 5999
finance leases      5911  — —  5911
      5911 9495 2504 17910
interest is payable on the bank loans at libor  3 2010 3 interest on the £2175000 variable rate secured loan notes 2012 is libor  225
sensitivity analysis
a change of 1 basis point in interest rates at the balance sheet date would have increaseddecreased equity and profit or loss by the amounts shown 
below this calculation assumes that the change occurred at the balance sheet date and had been applied to risk exposures existing at that date
this analysis assumes that all other variables remain constant the group has calculated the following sensitivities based on available data from forward 
markets for fixed and floating interest rates management believes that these reflect the most probable rate movements the analysis is performed on 
the same basis for the comparative period
           30 april  30 april  
           2011 2010 
           £000 £000
impact on equity  
1 increase in base rate of interest       142  158
1 decrease in base rate of interest       142 158
impact on profit or loss  
1 increase in base rate of interest       142  158
1 decrease in base rate of interest       142  158
d credit risk
financial risk management
credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and 
arises principally from the group’s receivables from customers and investment securities
the credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies
the group’s credit risk is primarily attributable to its trade receivables management has a credit policy in place and exposure to credit risk is monitored 
on an ongoing basis management believes the group has a wide trade receivable profile and therefore does not have any significant concentration of 
risk the credit quality of trade receivables that are neither past due not impaired is considered to be good sceptre leisure plc annual report and accounts 2011 60 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
28 financial risk management continued
d credit risk continued
exposure to credit risk
the carrying amount of financial assets represents the maximum credit exposure therefore the maximum exposure to credit risk at the balance sheet 
date was £2385000 2010 £6371000 being the total of the carrying amount of financial assets excluding equity investments shown in the table below
           30 april  30 april  
           2011 2010 
           £000 £000
trade and other receivables        1019  2208 
cash and cash equivalents       1366   4163
        2385  6371 
the maximum exposure to credit risk for trade receivables at the balance sheet date by geographic region was
           30 april  30 april  
           2011 2010 
           £000 £000
united kingdom        796  1934 
other       —  —
        796  1934
credit quality of financial assets and impairment losses
the ageing of trade receivables at the balance sheet date was
         gross impairment gross impairment 
         30 april 30 april 30 april 30 april 
         2011 2011 2010 2010 
         £000 £000 £000 £000
not past due      623  — 1397 —
past due 0–30 days      106  —  336 —
past due 31–120 days     50  —  117 —
more than 120 days      54  37  113 29
      833  37 1963 29
during the year  the movement in the allowances for doubtful debts amounts to an increase in the impairment provision of £8000 from £29000 to £37 000
e capital management
the group’s main objective when managing capital is to safeguard the group’s ability to continue as a going concern in order to provide returns to 
shareholders the group aims to maintain a strong credit rating and headroom whilst optimising return to shareholders through an appropriate balance 
of debt and equity funding the group manages its capital structure and makes adjustments to it with regard to the risks inherent in the business and 
in light of changes to economic conditions and risk characteristics of the underlying assets in order to maintain or adjust the capital structure the group 
may in the future adjust the amount of dividends paid to shareholders return capital to shareholders issue new shares raise additional bank finance 
or sell assets to reduce debt 61 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
28 financial risk management continued
e capital management continued
capital is managed by maximising retained profits after dividend distributions working capital is managed in order to generate maximum conversion of 
these profits into cash and cash equivalents and dividends are paid from current year profits thereby maintaining capital
the policy for managing debt is to create a smooth debt maturity profile with the objective of ensuring continuity of funding to meet the group’s future 
liquidity requirements and covenant ratios
capital includes share capital share premium reverse acquisition reserve net debt and retained earnings reserve net debt includes short and longterm 
borrowings including overdrafts and lease obligations net of cash and cash equivalents
f fair values of financial instruments
the fair values of the financial instruments held by the group have been calculated as follows
trade and other receivables
the fair value of trade and other receivables is estimated as the present value of future cash flows discounted at the market rate of interest at the 
balance sheet date if the effect is material
trade and other payables
the fair value of trade and other payables is estimated as the present value of future cash flows discounted at the market rate of interest at the balance 
sheet date if the effect is material
cash and cash equivalents
the fair value of cash and cash equivalents is estimated as its carrying amount where the cash is repayable on demand where it is not repayable on 
demand then the fair value is estimated at the present value of future cash flows discounted at the market rate of interest at the balance sheet date
interestbearing borrowings
fair value which after initial recognition is determined for disclosure purposes only is calculated based on the present value of future principal and 
interest cash flows discounted at the market rate of interest at the balance sheet date in respect of the liability component of convertible notes the 
market rate of interest is determined by reference to similar liabilities that do not have a conversion option for finance leases the market rate of interest 
is determined by reference to similar lease agreements
derivative financial instruments
the fair value of interest rate swaps is based on broker quotes those quotes are tested for reasonableness by discounting estimated future cash flows 
based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date
the interest rates used to discount estimated cash flows were as follows
           30 april  30 april  
           2011 2010 
            
derivatives        027  055 
loans and borrowings       427   455 
leases       1425   1300  sceptre leisure plc annual report and accounts 2011 62 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
28 financial risk management continued
f fair values of financial instruments continued
fair values
the fair values for each class of financial assets and financial liabilities together with their carrying amounts shown in the balance sheet are as follows
         carrying  carrying   
         amount fair value amount fair value 
         30 april 30 april  30 april  30 april  
          2011 2011 2010 2010 
         £000 £000 £000 £000
loans and receivables    
– trade and other receivables     5266 5266   5711  5711
cash and cash equivalents     1366 1366   467 4  467 4
financial liabilities derivatives at fair value through profit and loss    
– liabilities – interest rate swaps used for hedging      120 120  290  290 
financial liabilities measured at amortised cost    
– bank loans and loan notes     4500 4288   7700  7937 
– revolving credit facility      3799 3735  5999 5631
– finance lease liabilities      6478 5848  5911  5423 
– trade and other payables     9063 9063   8275  8275
– bank overdrafts     —  —   470  470
      17328 16422  18260  17641 
unrecognised gains     906    619 
financial instruments measured at fair value
the following table presents financial assets and liabilities measured at fair value in the balance sheet in accordance with the fair value hierarchy this 
hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial 
assets and liabilities the fair value hierarchy has the following levels
  level 1 quoted prices unadjusted in active markets for identical assets or liabilities
  level 2 inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly ie as prices or indirectly 
ie derived from prices and
  level 3 inputs for the asset or liability that are not based on observable market data unobservable inputs 63 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
28 financial risk management continued
f fair values of financial instruments continued
financial instruments measured at fair value continued
the level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair value 
measurement the financial assets and liabilities measured at fair value in the balance sheet are grouped into the fair value hierarchy as follows
         level 1 level 2 level 3 total 
30 april 2011        £000 £000 £000 £000
liabilities    
interest rate collar     — 120 — 120
net fair value      — 120 — 120
         level 1 level 2 level 3 total 
30 april 2010        £000 £000 £000 £000
liabilities    
interest rate collar     — 290 — 290
net fair value      — 290 — 290
29 operating leases payable
at the balance sheet date the group has outstanding commitments under operating leases which fall due as follows
       30 april  30 april  30 april 30 april 30 april  30 april  
       2011 2011  2011  2010 2010 2010 
       £000 £000 £000 £000 £000 £000 
       property other total property other total
within one year    438 502 940 453  477  930
in the second to fifth year inclusive    1121 545 1666 1361  229  1590 
after five years   449 — 449  661  —  661
    2008 1047 3055 2475  706  3181
operating lease payments represent rentals payable by the group for certain of its properties and equipment leases have varying terms and renewal 
rights the above leasing arrangements do not contain any restrictive covenants contingent rents or purchase options
30 accounting estimates and judgements
some asset and liability amounts reported in the historical financial information are based on management estimates and assumptions there is 
therefore a risk of significant changes to the carrying amounts for these assets and liabilities within the next financial year the estimates and 
assumptions are made on the basis of information and conditions that exist at the time of the valuation
classification of leases
the group utilises assets subject to operating and finance leases the classification of these leases is based on a number of factors such as risk and reward 
length of use and the fair value of minimum lease payments lease classification is made at the inception of the lease
impairment provisions
no impairment provisions have been made against goodwill as management has calculated the recoverable amount in each case to be in excess of the 
carrying values the carrying amount of goodwill in the group accounts is £61000 2010 £61000 and this amount was tested for impairment at the balance 
sheet date using a discount rate of 1032 2010 875 as set out in note 12 using this discount rate the net present value of the future cash flows associated 
with the goodwill relationships was significantly in excess of the carrying amount the impairment tests require a number of assumptions and judgements 
to be made an explanation of these judgements and estimations is detailed in the impairment test within note 12 to the financial statements sceptre leisure plc annual report and accounts 2011 64 wwwsceptreleisureplccouk
notes continued
forming part of the financial statements
30 accounting estimates and judgements continued
customer contracts and relationships
the group recognises customer contracts and relationships as intangible assets on business combinations with a net book value at the balance sheet 
date of £60m 2010 £54m these assets are subsequently amortised over the estimated useful economic life to the group which is estimated to be 
between 5–20 years the initial valuation of these assets is based on an incremental income method valuation which requires the use of assumptions 
relating to future revenue profitability and relationship life with each customer changes in the assumptions for useful economic life or incremental 
profits will have an impact on the annual amortisation charge recognised in the financial statements the loss of a major customer may result in the 
recognition of an impairment loss the directors revisit these assumptions on a regular basis
31 related party transactions
transactions between group companies have not been disclosed as these have all been eliminated in the preparation of the consolidated financial information
during the financial year the group had the following transactions with related parties as defined by ias 24 related party disclosures
    30 april 2011  30 april 2010
    aggregate net amount aggregate net amount 
    value for owed toby value for owed toby 
   nature of financial year the group financial year the group 
related party relationship transactions £000 £000 £000 £000
weston castle group limited  common control rental income 
and its subsidiary entities   and recharges  178 120 138  130
   sales — — —  —
    178 130 138 130
mbm fabrications limited common directors purchase of  
  with significant influence machine   
    components  
   and spares 8 1 92 1
single site software limited common directors provision  
  within subsidiaries with of computer  
  significant influence software — — —  —
all transactions with related parties were undertaken in the ordinary course of business and on an arm’s length basis 65 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
31 related party transactions continued
key management personnel
as at 30 april 2011 and 30 april 2010 the following directors or key management personnel had made loans to the group at the year end
           30 april 30 april  
            2011 2010 
           £000 £000
v wardman        166 179
no interest has been charged on the balance of the loan a repayment of £13000 was made in may 2010 the loan is repayable on demand and the 
maximum balance due by the group was £179000 2010 £179000
32 post balance sheet events
on 28 june 2011 sceptre leisure plc agreed new facilities with lloyds banking group £375m of the outstanding balance on the revolving credit facility 
at 30 april 2011 was added to the outstanding term loan also £375m at the same date and combined into a new term loan of £75m repayable over 
three years to april 2014 in addition lloyds banking group continues to provide a £500000 working capital facility to the group which will next be 
reviewed in june 2012 sceptre leisure plc annual report and accounts 2011 66 wwwsceptreleisureplccouk
company balance sheet
at 30 april 2011
company no 031897 47
           30 april  30 april  
           2011 2010 
          note £000 £000
fixed assets   
investments      6  16098 16039 
current assets   
debtors       7  10534 12284 
cash at bank and in hand        8 —
        26640 28323
current liabilities        
creditors amounts falling due within one year      8  966 236
corporation tax       23 —
         989 236
net current assets        9553 12048 
total assets less current liabilities        25651 28087
creditors amounts falling due after more than one year      9 3000  5999
net assets        22651 22088
capital and reserves   
called up share capital       10 5466 5394 
share premium account       11  5168 4840
merger reserve       11  11419 11419 
merger relief      11 100  100
other reserve       11  201 143
profit and loss account       11  297 192
shareholders’ funds       22651  22088 
these financial statements were approved and authorised for issue by the board of directors on 26 july 2011 and were signed on its behalf by
kenneth turner
director
sceptre leisure plc
the accompanying accounting policies and notes form an integral part of these financial statements 67 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
notes
forming part of the company financial statements
1 accounting policies
the following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial 
statements except as noted below the directors have reviewed the principal accounting policies and consider they remain the most appropriate 
for the company the principal accounting policies of the company have remained unchanged from previous years
basis of preparation
the financial statements have been prepared in accordance with uk gaap accounting standards and under the historical cost accounting rules
under section 408 of the companies act 2006 the company is exempt from the requirement to present its own profit and loss account
investments
investments in subsidiary undertakings are stated at cost less amounts written off
taxation
the charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the 
treatment of certain items for taxation and accounting purposes
deferred tax is recognised without discounting in respect of all timing differences between the treatment of certain items for taxation and accounting 
purposes which have arisen but not reversed by the balance sheet date except as otherwise required by frs 19
bank borrowings
interestbearing bank loans and overdrafts are initially recorded at fair value finance charges including premiums payable on settlement or redemption 
and direct issue costs are accounted for on an accruals basis to the profit and loss account using the effective interest method and are added to the 
carrying value of the instrument to the extent that they are not settled in the period in which they arise
sharebased payments
for all employee share options granted after 7 november 2002 and vesting on or after 1 may 2005 an expense is recognised in the profit and loss 
account with a corresponding credit to equity the equity sharebased payment is measured at the grant date using a blackscholes model the details 
of which are set out in note 24 to the consolidated financial statements
where the company grants options over its own shares to the employees of its subsidiaries it recognises in its individual financial statements an 
increase in the cost of investment in its subsidiaries equivalent to the equitysettled sharebased payment charge recognised in its consolidated financial 
statements with the corresponding credit being recognised directly in equity
pensions
the company makes contributions to certain directors’ pension plans and the pension costs charged against profits represent the amount of the 
contributions payable to the schemes in respect of the accounting period
2 profit attributable to members of the parent company
as permitted by section 408 of the companies act 2006 the parent company has not presented its own profit and loss account
the company’s profit for the year amounts to £66000 2010 £30000 sceptre leisure plc annual report and accounts 2011 68 wwwsceptreleisureplccouk
notes continued
forming part of the company financial statements
3 staff numbers and costs
the average number of persons employed by the company including directors during the year analysed by category was as follows
           30 april  30 april  
           2011 2010 
           number number
office and administrative        4  3
the aggregate payroll costs of these persons were as follows
           30 april  30 april  
           2011 2010 
           £000 £000
wages and salaries        388  368 
social security costs       44   34 
share option charge        37  45
pension costs        33  28
        502  475 
4 remuneration of directors
see note 6 to the consolidated financial statements
5 dividends
the directors do not recommend the payment of a dividend in respect of the current year 2010 £nil 69 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
6 investments in subsidiaries
the company has the following investments in subsidiaries
   
country of  class of
   owner ship  nature of
 
   incorporation shares held 2011  2010  business
orb holdings limited england and wales ordinary  100  100  holding company
sceptre leisure solutions limited  england and wales ordinary 98  98  rental of gaming and 
       amusement machines
regal amusements machine sales limited  england and wales ordinary  100  100 sale of amusement machines
lotteryking limited  england and wales  ordinary  100  100  supply and operation of lottery   
        ticket vending machines
creative lotteries limited  england and wales ordinary  100  100 external lottery manager 
australian 8 ball company limited  england and wales ordinary 100  100  rental of gaming and   
       amusement machines
single site software limited  england and wales ordinary  50  50 provision of ict services
club biz limited england and wales ordinary 100 100 dormant
club lottery uk limited england and wales ordinary 100 100 dormant
daily lotto uk limited england and wales ordinary 100 100 dormant
gaming centres limited england and wales ordinary 100 100 dormant
gamingking limited england and wales ordinary 100 100 dormant
gemini club supplies limited england and wales ordinary 100 100 dormant
kelly’s eye no 1 limited england and wales ordinary 100 100 dormant
kelly’s eye north west limited england and wales ordinary 100 100 dormant
lotteryking international limited england and wales ordinary 100 100 dormant
sceptre leisure sales limited england and wales ordinary 100 100 dormant
the business information zone limited england and wales ordinary 100 100 dormant
vendingking limited england and wales ordinary 100 100 dormant sceptre leisure plc annual report and accounts 2011 70 wwwsceptreleisureplccouk
6 investments in subsidiaries continued
            total 
            £000
cost 
balance at 1 may 2009        15548
additions         1126
sharebased payments to employees in subsidiaries        85
balance at 30 april 2010         16759
balance at 1 may 2010        16759
sharebased payments to employees in subsidiaries         59
balance at 30 april 2011        16818
impairment 
balance at 1 may 2009         720
charged in the year         —
balance at 30 april 2010         720
balance at 1 may 2010         720
charged in the year        —
balance at 30 april 2011        720
net book value 
at 1 may 2009          14828
at 30 april 2010        16039
at 30 april 2011        16098
7 debtors
           30 april  30 april  
           2011 2010 
           £000 £000
amounts owed by subsidiary undertakings        10460 12160
other taxation        19 33 
prepayments        55 91 
        10534 12284 
debtors include £3000000 2010 £5999000 due after more than one year
notes continued
forming part of the company financial statements 71 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
8 creditors amounts falling due within one year
           30 april  30 april  
           2011 2010 
           £000 £000
amounts due to subsidiary undertakings       5  5 
trade creditors       51  183 
accruals       111  48 
revolving bank credit facility       799 —
        966 236
9 creditors amounts falling due after more than one year
           30 april  30 april  
           2011 2010 
           £000 £000
revolving bank credit facility        3000 5999
10 called up share capital
           30 april  30 april  
           2011 2010 
           £000 £000
authorised  
90000000 2010 90000000 ordinary shares of 5p each       4500  4500
290697869 2010 290697869 deferred shares of 09p each      2616  2616 
        7116 7116 
allotted called up and fully paid  
56989585 2010 55545542 ordinary shares of 5p each        2850 2778 
290697869 2010 290697869 deferred shares of 09p each      2616  2616 
        5466 5394
during the year 1444043 shares were issued as part of the consideration for the acquisition of trade and assets of rv smith leisure limited 
on 29 november 2010 sceptre leisure plc annual report and accounts 2011 72 wwwsceptreleisureplccouk
notes continued
forming part of the company financial statements
11 share premium and reserves
        share    profit 
        premium merger merger other and loss 
        account reserve relief reserve account 
        £000 £000 £000 £000 £000
at beginning of year     4840  11419  100  143  192
profit for the financial year     —  —  —  —  66 
employee sharebased payments     —  —  —  58  39 
shares issued in relation to the acquisition of the trade and assets  
of rv smith leisure limited     328  —  —  —  — 
at end of year     5168  11419  100  201  297 
12 capital commitments
the company has no outstanding capital commitments at 30 april 2010 or 30 april 2011
13 related party transactions
during the year  the company undertook transactions with sceptre leisure solutions limited sls a subsidiary 98 owned by the company the shares 
issued as set out in note 10 were used by sls to partfund the purchase of the trade and assets of rv smith leisure limited on 29 november 2010 
in addition during the year sls remitted £22m to the company to repay part of the revolving finance facility disclosed in notes 8 and 9
the company has taken advantage of the exemptions in financial reporting standard no 8 related party transactions and has not disclosed 
transactions with wholly owned group undertakings 73 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk
notice of annual general meeting
notice is hereby given that the annual general meeting of the company will be held at the company’s registered office 139 brookfield place 
walton summit preston pr5 8bf on wednesday 14 september 2011 at 2pm for the following purposes
to consider and if thought fit pass the following resolutions
ordinary business
1  to receive and if approved to adopt the company’s accounts for the year ended 30 april 2011 together with the report of the directors and 
the auditor’s report on those accounts and to note that the directors do not recommend the payment of a final dividend for that period
2  to reappoint grant thornton uk llp as auditor of the company to hold office from the conclusion of the meeting to the conclusion of the 
next meeting at which the accounts are laid before the company at a remuneration to be determined by the directors
3  to reappoint k turner who retires by rotation in accordance with the company’s articles of association as a director of the company
4 to reappoint d yates who retires by rotation in accordance with the company’s articles of association as a director of the company
ordinary resolution
5  to grant the authority conferred on the directors by article 821 of the company’s articles of association to allot relevant securities for the period 
ending on the conclusion of the company’s next agm and for that period the section 551 amount shall be £854843 17 096875 shares this authority 
shall be in substitution for any prior authority granted in this regard by the company at an annual general meeting or extraordinary general meeting
special resolution
6  subject to the passing of resolution 5 above to grant the power conferred on the directors by article 822 of the company’s articles of association 
to allot equity securities as if section 5611 did not apply to any such allotment for the period ending on the conclusion of the company’s next agm 
and for that period the section 561 amount shall be £284948 5698950 shares this authority and power shall be in substitution for the power 
granted in this regard by the company at any prior annual general meeting or extraordinary general meeting
  to the extent the power conferred by article 822 to allot equity securities up to an aggregate nominal amount equal to the section 561 amount shall 
apply to a sale of shares which by virtue of section 5601 of the act is an allotment of equity securities the words “pursuant to and within the terms 
of the said authority“ in article 822 shall be deemed to be omitted
7  pursuant to the authorities contained in its articles of association to give general and unconditional authority to make market purchases within the 
meaning of section 6934 of the companies act 2006 of up to a maximum of 2849479 ordinary shares of 5p each in its capital “ordinary shares“ 
representing 5 of the company’s issued ordinary share capital provided that
 i  the maximum price per ordinary share is not more than 5 above the average market value for an ordinary share as derived from the london 
stock exchange daily official list for the last five business days in respect of which such daily official list is published before the purchase is made 
and the minimum price per ordinary share is not less than 5p and
 ii  this authority unless previously renewed shall expire on the conclusion of the company’s next agm except in relation to the purchase of any ordinary shares 
the contract for which was concluded before the date of expiry of the authority and which would or might be completed wholly or partly after such date
by order of the board
guy van zwanenberg
secretary            139 brookfield place
26 july 2011            walton summit
              preston pr5 8bf sceptre leisure plc annual report and accounts 2011 74 wwwsceptreleisureplccouk
notice of annual general meeting continued
notes
a  any member of the company entitled to attend and vote at the meeting may appoint one or more proxies to attend and on a poll to vote on hisher 
behalf a proxy need not be a member forms of proxy should be lodged with the company’s registrar proxy department capita registrars limited 
pxs 34 beckenham road beckenham kent br3 4tu not later than 48 hours before the time for which the meeting is convened to be effective 
completion of the appropriate form of proxy does not prevent a member from attending and voting in person if heshe is entitled to do so and so wishes
b  members are informed that a register of all interests of each director and his family in each class of share capital of the company and its subsidiaries 
and copies of all contracts of service of more than one year’s duration of any director with the company or any of its subsidiaries are available for 
inspection at the registered office of the company during normal business hours on any weekday saturdays and public holidays excepted from the 
date of this notice until the close of the meeting and on the day of the meeting at the place of the meeting from at least 15 minutes prior to the 
meeting until its conclusion
c  in accordance with regulation 41 of the uncertificated securities regulations 2001 the company gives notice that only those shareholders entered 
on the relevant register of members the “register“ for certificated or uncertificated shares of the company as the case may be at 6pm on 
12 september 2011 the “specified time“ will be entitled to attend or vote at the meeting in respect of the number of shares registered in their name 
at the time changes to entries on the register after the specified time will be disregarded in determining the rights of any person to attend or vote 
at that meeting should the meeting be adjourned to a time not more than 48 hours after the specified time that time will also apply for the purpose 
of determining the entitlement of members to attend and vote and for the purpose of determining the number of votes they may cast at the 
adjourned meeting should the meeting be adjourned for a longer period then to be so entitled members must be entered on the register at the 
time which is 48 hours before the time fixed for the adjourned meeting or if the company gives notice of the adjourned meeting at the time 
specified in the notice
d  to appoint a proxy or to give or amend an instruction to a previously appointed proxy via the crest system the crest message must be received 
by the issuer’s agent ra10 by 11am on 12 september 2011 for this purpose the time of receipt will be taken to be the time as determined by the 
timestamp applied to the message by the crest applications host from which the issuer’s agent is able to retrieve the message after this time  
any change of instructions to a proxy appointed through crest should be communicated to the proxy by other means crest personal members or 
other crest sponsored members and those crest members who have appointed voting service providerss should contact their crest sponsor 
or voting service providers for assistance with appointing proxies via crest for further information on crest procedures limitations and system 
timings please refer to the crest manual we may treat as invalid a proxy appointment sent by crest in the circumstances set out in regulation 355a 
of the uncertificated securities regulations 2001 in any case your proxy form must be received by the company’s registrars no later than 11am on 
12 september 2011
e shareholders may appoint a proxy or proxies or vote online at wwwcapitashareportalcom sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk sceptre leisure plc
registered office
139 brookfield place 
walton summit 
bamber bridge 
preston pr5 8bf
t 01772 694 242 
f 01772 694 243 
w wwwsceptreleisureplccouk 
e infosceptreleisureplccouk


Summary:
 chief executive’s review
i am pleased to be able to report another year of 
progress for sceptre leisure we have grown our 
machine rental business in the core pub market 
through both organic contract wins and selected 
acquisitions and we continue to develop the 
kelly’s eye brand across a wide range of 
leisure outlets
we have reduced net debt by some £25m during 
the period under review whilst continuing to 
invest in our machine estate to ensure that we 
are able to offer our customers a wide choice of 
games suitable for varying locations
profitability
as reported in our interim statement we began 
the financial year with a reduced machine base 
following the sale of our fixed odds betting 
terminal fobt estate in april 2010 revenue 
and profit for the first half of the year were 
therefore both at a lower run rate than the 
second half of the previous year
in addition regulatory changes surrounding games 
offered on quiz machines swps in april 2010 
saw income from these assets reduce as some 
game content was removed to comply with 
hmrc requirements this had an adverse effect 
on shared income from swps which resulted in 
sceptre’s weekly revenue per machine falling 
from an average of £2998 in 2010 to £2382 
over the past year on a machine estate of some 
3100 pieces this equated to a fall in revenue 
of £19000 per week the full £1m effect of which 
flowed through to reduce our profit for the 
financial year
action was taken to reduce our operating costs 
and as a result staff overhead spend was lower 
in q4 than in q1 in spite of a larger machine 
estate following the acquisition of rv smith and 
the award of the new punch contract accordingly 
in spite of an acquisition and organic growth 
in machine numbers our income was adversely 
affected and our full year profitability was 
therefore at the lower end of our expectations
sceptre leisure solutions
as discussed above revenue within our machine 
rental business reduced yearonyear this is due 
both to the sale of our fixed odds betting t erminal 
fobt machines at the end of fy2010 which 
contributed approximately £25m turnover in the 
prior year and also to pub companies moving 
away from charging royalties to tenants as part 
of the machine contract a reduction of £13m 
compared to 2010
this reduction in royalty revenues had no effect 
on the division’s profitability as all charges 
recognised in revenue are passed on directly 
to the pub company as a cost of sale for this 
reason whilst turnover within sceptre leisure 
solutions fell during the year under review the 
gross margin grew in percentage terms over 
the same period
in summary
acquisition of assets and generations 
of rv smith leisure in november 2010
organic growth through contract wins 
existing contracts renewed
machine rental market ripe 
for consolidation
we have grown our machine rental business in the core pub market 
through both organic contract wins and selected acquisitions
sceptre leisure plc annual report and accounts 2011 10 wwwsceptreleisureplccouk these two changes in our business have 
necessitated a recalculation of one of our main 
kpis that of machine week average mwa this 
change is explained fully in the kpi section of the 
financial review on page 18 and allows a better 
comparison of the division’s performance over 
time we maintained our mwa yearonyear in 
spite of changes to the games available on our 
skills with prizes swp terminals as a result 
of an hmrc ruling on content these changes 
resulted in a 20 reduction in revenue from 
this class of machine equivalent to £1m per 
year – a reduction reflected across the entire 
machine operating industry we took swift 
action to mitigate these losses both through 
the negotiation of new software licences 
at reduced costs where possible
following the sale of the fobt operation in 
april 2010 we took the opportunity to reduce 
debt with part of the £375m proceeds after a 
period of consolidation in h1 we were pleased 
to announce the award of a major contract 
with the punch pub company to supply 30 of 
their managed estate the threeyear contract 
covering around 800 machines is reviewed 
in more detail on page 12 and marks another 
important milestone in sceptre’s development
our contract pipeline remained strong 
throughout the remainder of the financial 
year and we confirmed the renewal of 
longstanding relationships with joseph holt 
number of group‑operated 
machines
22500
uk machines 2010
234000
sceptreoperated machines 2011
22500
uk pub sector machines 2010
c145000
total uk betting stake 2009
£1029bn
total uk prize money 2009
£823bn
sceptre leisure solutions limited
—  greater dependence on alternative income for 
national and regional pub companies and landlords
—  sceptre has continued to grow in its core market 
despite pub closures
amusement machines
—  increased presence in leisure travel and 
multisite locations
—  stakes and prizes increase in june 2009 provided 
a boost to the market
machine locations
 pubs 70
 clubs 15
 travel 8
 multisite 7
market overview
  creating a market focus
source bacta
11 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk machines covered 
by ppc contract
800
punch pub company awarded the 
agreement based on the high level 
of service and support that sceptre 
leisure offers and which we have 
experienced in our leased business 
over a number of years we feel this 
will ensure that our pubs get the 
very best out of their machines in 
terms of service delivery and 
gaming innovations
julie clamp 
machine development manager punch pub company
contract win with  
pub punch company
sceptre will supply coin operated amusement equipment 
including awps pool tables and music solutions to 
30 of the pub punch company estate which includes 
established brands such as chef  brewer 
this customersupplier relationship will develop over 
the years to come technology advances coupled with 
excellent customer service allow us to generate more 
income per machine for pub punch company than 
our competitors
 what’s involved
 how will sceptre benefit
12 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk chief executive’s review continued
sceptre leisure solutions continued
and daniel thwaites whilst also winning 
new business with de vere hotels and 
the mcmanus pub company 
these contract wins underline our position as 
the preferred machine operator for most pub 
companies within the uk our figures show 
that sceptre consistently generates higher 
machine income for our customers wherever it 
competes headtohead with our main national 
competitor within a pub company’s estate this 
outperformance is due to our operational team 
whose drive for quality and service keeps us at 
the forefront of the industry i am proud to work 
with such a talented group and would like to take 
the opportunity to thank them for their hard 
work and dedication over the course of the year 
overall performance within the machine rental 
division was strong given the trading environment 
reflecting increased machine numbers in the 
second half of the year and also the contribution 
made by the acquisition of the assets and 
operations of rv smith leisure limited in 
november 2010 this has allowed us to improve 
our operational ratios further  increasing machine 
density in the south of the uk we also achieved 
a higher average number of machines operated 
per person employed within the division up to 49 
at 30 april 2011 from 47 the previous year 
and maintaining our asset utilisation rate at 
our target of 95
acquisition
on 29 november 2010 we announced 
the acquisition of the machine assets and 
operations of rv smith leisure limited for a 
total consideration of £12m the purchase price 
was made up of £08m in cash with the remainder 
satisfied by the issue of 14m shares at the market 
price of 277p on the day of completion
the assets acquired consisted of 925 machines 
in 277 locations across the south of the uk our 
strong and flexible infrastructure meant that 
this new business could be absorbed within our 
existing depot network without the need for 
new premises we were pleased to welcome the 
transferring employees who were quickly and 
efficiently incorporated into sceptre’s operation 
in the days following the acquisition
the acquisition further strengthened our position 
in the south of the uk and provided improved 
density within our london and bournemouth 
depots we will continue to follow a strategy of 
growth through selected acquisitions assuming 
that the price and overall fit of the targets 
are right
overall performance within the machine rental division was strong 
reflecting increased machine numbers in the second half of the year 
  developing our 
organisation
2011 2010 2009 2008
15200
21300
20900
22500
machine numbers
what we’ve achieved
—  continued growth in the south
—  acquisitions fully integrated
—  increased market share
planning for the future
—  investment in new technologies such 
as note payout
—  £9m of capital expenditure on new 
machines in 2011
—  product offer increased with 
party house range
13 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk chief executive’s review continued
the acquisition further strengthened our position in the south 
of the uk and provided improved density within our london 
and bournemouth depots 
lotteryking
we improved market penetration of our lottery 
terminals over the course of the year with 
terminal numbers in pubs and clubs increasing 
by 4 to 3500 in the period under review
we also grew lottery sales within pubs through 
creative lotteries achieving a 38 increase in 
sales to £023m during the financial year these 
lotteries also raised over £90000 for charity 
over the period
the registered members’ club market has 
contracted significantly over the course of 
the recession with many clubs closing and 
others seeing a reduction in footfall particularly  
in the past year 
for this reason private lottery revenue fell 
yearonyear although our restructuring of this 
division at the end of the 2010 financial year saw 
losses reduce
we will continue to work on maximising our 
return from existing assets within this division 
while ensuring that it contributes to overall 
group cash flow in the coming year
kelly’s eye
october 2010 saw the launch of kelly’s catalogue 
which brought together a full range of fundraising 
indoor gaming catering and bar products aimed 
at the licensed market for the first time we will 
continue to use this as a tool in order to increase 
our penetration of the pub and club market with 
an aim to establish kelly as the leading supplier 
within the uk
outlook
sceptre continues to grow and our ambition is 
to become the largest machine operator within 
the pub market over the next 18 months whilst 
maintaining or increasing our margins
the market is ripe for further consolidation and 
we will identify suitable acquisition targets that 
will enhance our existing machine estate
we will also pursue contracts with both new 
and existing customers further cementing our 
position as the preferred operator for national 
regional and local pub companies across the uk
finally we will develop the kelly’s eye brand within 
the leisure market using our existing customer 
base to increase sales and add incremental profit 
across our divisions in the coming months
kenneth turner
chief executive officer
26 july 2011
  improving our 
operations
what we’ve achieved
—  improved operational ratios
—  maintained machine asset utilisation 
at 95
—  rationalised operating costs
planning for the future
—  nationwide infrastructure ready for growth
—  continued investment in communication 
technology to allow remote machine 
management and fault diagnosis
— digital machine trials ongoing
revenue split by activity
 machine rental 91
 lottery and indoor gaming 8
 equipment sales 1
sceptre leisure plc annual report and accounts 2011 14 wwwsceptreleisureplccouk sceptre leisure supplies the 
majority of our estate across the 
uk we greatly value sceptre’s 
operational expertise in maximising 
income from our machines and 
respect their high levels of support 
to keep them up and running
john appleton 
director of electronic leisure 
mitchells  butlers plc
understanding our  
customers’ requirements
sceptre dedicates considerable resources to important 
national customers such as mitchells  butlers from 
the ceo to our collectors our entire team is focussed 
on generating income for our customers this is why 
we are now the preferred national supplier for many 
pub companies across the uk
  choosing the right team
15 wwwsceptreleisureplccouk sceptre leisure plc annual report and accounts 2011 revenue potential from 
secured contract
£15m
these new deals 
demonstrate our 
continued progress 
towards becoming the 
number one machine 
operator in the uk 
pub market
ken turner 
chief executive officer sceptre leisure plc
100 sole supply with  
joseph holt limited
joseph holt limited has awarded a new twoyear 
contract to sceptre for 100 sole supply to its 
130location managed and tenanted estate the contract 
continues the close working relationship built up over 
more than twelve years
 what’s involved
joseph holt’s estate provides valuable density in the 
north west and the renewed contract will provide 
some £15m in revenues over two years
 how will sceptre benefit
16 sceptre leisure plc annual report and accounts 2011 wwwsceptreleisureplccouk