sceptre leisure plc annual report and accounts 2010
sceptre
sceptre leisure plc
on the right track
annual report and accounts 2010 about us
sceptre leisure plc’s 
principal activities 
are centred on the 
provision of gaming 
lottery and leisure 
equipment in the 
12 months to 
30 april 2010 we 
have continued to 
grow and develop 
our business 
this report will tell 
you what we have 
done and how we 
have done it
for more information on  
our business please go to 
wwwsceptreleisureplccouk
u
contents
 overview
highlights 01
who we are 02
our markets 03
our strategy 04
our performance 05
 business review
chairman’s statement 06
chief executive’s review 08
financial review 16
principal risks and uncertainties 18
 governance
board of directors 20
secretary and advisors 21
directors’ report 22
statement of directors’ responsibilities 25
independent auditor’s report 26
 accounts
consolidated statement of 
comprehensive income 28
consolidated balance sheet 29
consolidated statement of cash flows 30
consolidated statement of changes in equity 31
notes to the financial statements 32
company balance sheet 61
notes to the company financial statements 62
 other information
notice of annual general meeting 66
shareholder notes 68 		 sceptre leisure plc 01
	 	 annual 	 report	 and	 accounts	 2010
overview pages 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
highlights
overview pages 01–05
business review pages 06–19
governance pages 20–26
financial statements pages 27–65
other information pages 66–68
profit before taxation £m
net assets £m
earnings per share before exceptional items p
16
26
24
14
59
30
19
132
41
2008
2008
2008
2009
2009
2009
2010
2010
2010
£132m
124
41p
37
operational
machine	 numbers	 up	 to	
21300	 from	 20900
machine	 asset	 utilisation		
on	 target	 at	 95
strategic	 acquisition	
of	 southernuk	 based	
machine	 operator	 in	
december	 2009
funding
net	 debt	 reduced	 to	
£159m	 from	 £195m
£55m	 share	 placing	
in	 july	 2009
increased	 facilities	 agreed	
with	 lloyds	 banking	 group	
in	 december	 2009
revenue £m
214
392
428
2008 2009 2010
£428m
9
£19m
37 02 sceptre leisure plc
	 annual 	 report	 and	 accounts	 2010
who we are
the group at a glance
sceptre
the business in leisure
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	 fullymanned	 depots	 throughout	 the	 uk	 it	 has	 an	 excellent	
reputation	 for	 quality	 and	 has	 seen	 consistent	 growth	 throughout	 the		
last	 twelve	 years
lotteryking
founded	 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	 over	 3000	 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		
and	 other	 public	 places
kelly’s eye
sceptre	 leisure	 plc	 formerly	 gamingking	 acquired	 kelly’s	 eye	 in	 may	 2005	
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 	 although	 historically	 being	a	 ‘clubfocused’	 business	
kelly’s	 eye	 is	 now	 taking	 advantage	 of	 sceptre	 leisure’s	 strong	 presence	 and	
relationships	 in	 the	 pub	 market
since formation in 1998 sceptre has grown to be one of only two truly national 
suppliers of coinoperated leisure equipment to the licensed market we provide 
excellence not only through products supplied but also through unrivalled 
customer service standards our service is now well recognised throughout 
the uk with all major regional and national brewers pub companies and leisure 
chains over the past 12 years sceptre has become much more than an 
operating company and now adds unique value to our customer partners 
through four trading brands
our trading brands
party house
party	 house	 has	 been	 operating	 since	 1977	 supplying	a	 wide	 range	 of	 party	
supplies	 and	 display	 products	 to	 the	 trade	 wholesale	 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	 your	 party	 supply	 decorations	 and	 novelties	
direct	 from	 our	 warehouse	 in	 preston 		 sceptre leisure plc 03
	 	 annual 	 report	 and	 accounts	 2010
overview pages 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
our markets
where we operate
sceptre leisure solutions 
limited
–		 greater	 dependence	 on	 alternative		
income	 for	 national	 and	 regional	 pub	
companies	 and	 landlords
–		 sceptre	 has	 continued	 to	 grow		
	 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
1	 	 pubs	  70
2	 	clubs 15	
3	 	travel  8
4	 	 multisite 7
locations
–		 sceptre	 is	 the	 only	 operator	 with	 fully	
manned	 depots	 across	 the	 entire	 uk
speed of service
–	 service	 capability	 364	 days	a	 year
–		 13	 regional	 depots	 with	 good	 access	
to	 motorway	 networks	 and	 major	
cities	 and	 towns
–		 motorcycling	 engineers	 in	 central	
london
strength of management
–	 blend	 of	 youth	 and	 experience
–		 combines	 industry	 experience	 with	
fresh	 operating	 practices
–		 regional	 directors	 run	 depots	 as	
individual	 operating	 centres
–		 depots	 managed	 autonomously	
responding	 to	 customer	 need	 at	
point	 of	 delivery
–		 kpis	 are	 well	 constructed	 and	
rigorously	 monitored	 to	 ensure	
tight	 cost	 and	 operational	 control	
at	 all	 levels
machine assets
–	 95	 utilisation	 at	 30	 april	 2010
–		 dedicated	 asset	 management	
department
–		 excellent	 relationships	 with	 suppliers	
means	 input	 to	 new	 products	 based	
on	 field	 research	 and	 trials
number of units
–	 sceptre	–	 18000	 operated	 at	
30	 april	 2010
–	 lotteryking	–	 3300	 operated	 at	
30	 april	 2010
recent growth
–		 growth	 in	 current	 financial	 year	 has	
been	 both	 organic	 and	 acquisitive
–		 highquality	 customer	 base	 with	
growth	 at	 the	 top	 end
rebranding
–		 lotteryking	–	 new	 look	 for	 machines	
draws	 on	 lotteryking’s	 wellknown	
brand	 within	 the	 registered	 members	
club	 market
–	 kelly’s eye	–	 new	 look	 for	 expansion	
into	 pub	 market	 has	 been	 well	
received
–		 new	 fullcolour	 catalogue	 produced	
in	 line	 with	 new	 identity
new contracts
–		 growth	 has	 been	 strong	 in	 licensed	
retail	 and	 other	 leisure	 venues	 new	
and	 additional	 business	 has	 been	
secured	 with	 leading	 customers
online
–		 kelly’s eye  party house	–	
ecommerce	 websites	 now	 live
our markets our differentiators our progress
the group’s principal activities are centred around the provision of gaming 
lottery and leisure equipment to the licensed trade our well structured and 
vastly experienced management team has allowed us to forge strong links with 
major machine manufacturers ensuring that we keep ahead of the changing 
needs of our market this allows us to ensure that only the most profitable 
machines are sited on our customers’ estates
1
2
3
4 04 sceptre leisure plc
	 annual 	 report	 and	 accounts	 2010
our strategy
delivering sustainable returns
sceptre’s goal is to continue to deliver sustainable returns to our shareholders 
our goal is to develop a market leadership position through organic and 
acquisitive growth allowing us to create longterm shareholder value
implementing our strategy
developing our organisation
our	 growth	 over	 the	 past	 12	 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
we	 are	 the	 only	 national	 operator	 with	
fullymanned	 depots	 across	 the	 uk	
we	 invest	 in	 highquality	 machines	 and	
components	 this	 reduces	 downtime	
through	 breakdown	 and	 ensures	 that	 our	
assets	 are	 operational	 more	 of	 the	 time
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
our goals our progress
develop market  
leadership positions
21000 machines currently operated
growth in current financial year has been both organic and acquisitive
highquality customer base with growth at the top end
create longterm  
shareholder value
sceptre develops partnership agreements with the leading suppliers  
of equipment to the leisure market
growth has been strong in licensed retail and other leisure venues 		 sceptre leisure plc 05
	 	 annual 	 report	 and	 accounts	 2010
overview pages 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
our performance
a safe bet in challenging markets
sceptre has delivered 12 years of consistent growth we believe that we have 
a proven scaleable business model that can accommodate further growth within 
our existing infrastructure recent contract wins and acquisitions have given  
us a broad range of customers across the licensed retail sector
marketplace overview a strong business model
source	 bacta
sceptre leisure solutions machine numbers and  
average weekly rental
oct	 07 apr	 08 oct	 08 apr	 09 oct	 09 apr	 10
12000 £25
13000 £27
14000 £29
15000 £31
16000 £33
17000 £35
18000 £37
19000 £39
20000 £41
machine	 numbers	 lhs average	 weekly	 rental	 rhs
uk machines 2009
234000
sceptre operated machines 
2010
21300
uk pub sector machines 
2009
c160000
total uk betting stake 
2009
£1029bn
total uk prize money 2009
£823bn
a	 proven	 scaleable	
business	 model	 able	
to	 grow	 within	 existing	
infrastructure
12	 consecutive	 years	 of	
growth	 in	 sales	 and	 profits
three	 successfully	
integrated	 acquisitions	
over	 the	 last	 three	 years
extensive	 room	 for		
growth
a	 broad	 range	 of		
highquality	 blue	 chip	
customers	 across	a		
variety	 of	 businesses
strong	 cash	 flow	
generation
adequate	 funding
experienced	 and	
committed	 board		
of	 directors 06 sceptre leisure plc
	 annual 	 report	 and	 accounts	 2010
the group has been 
active during the year 
which included an 
acquisition a disposal 
and continued organic 
growth
on the 
winning 
team 		 sceptre leisure plc 07
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business review pages 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
chairman’s statement
continued growth
we have once again seen an 
increase in turnover and profit 
achieved against a backdrop 
of recession and economic 
uncertainty in the uk
welcome	 to	 sceptre	 leisure	 plc’s	 2010	
report	 and	 accounts	 the	 group	 has	 been	
active	 during	 the	 year	 which	 included	
an	 acquisition	a	 disposal	 and	 continued	
organic	 growth	 we	 have	 once	 again	
seen	 an	 increase	 in	 turnover	 and	 profit	
achieved	 against	a	 backdrop	 of	 recession	
and	 economic	 uncertainty	 in	 the	 uk
during	 the	 course	 of	 the	 year	 the	 group	
has	 achieved	a	 number	 of	 targets
on	5	 july	 2009	 the	 company	 completed	
a	 £55m	 share	 placing	 with	 hillroad	
investments	 equivalent	 to	 299	 of		
the	 enlarged	 issued	 share	 capital
on	1	 december	 2009	 increased	 banking	
facilities	 were	 agreed	 with	 lloyds	 banking	
group	a	 new	 £60m	 revolving	 finance	
facility	 and	 £05m	 working	 capital	 facility	
replaced	 the	 £3m	 overdraft	 originally	
agreed	 with	 bank	 of	 scotland	 in	 2008	
these	 new	 resources	 have	 been	 used	
to	 invest	 in	 new	 machines	 across	 the	
entire	 estate
in	 spite	 of	a	 difficult	 financial	 climate	
we	 have	 been	 successful	 in	 replacing	a	
number	 of	 the	 asset	 finance	 lines	 lost		
in	 the	 previous	 financial	 year	 due	 to		
the	 banking	 crisis
we	 retain	 sufficient	 headroom	 within	 our	
facilities	 to	 continue	 our	 expansion	 into	
the	 new	 financial	 year
on	 15	 december	 2009	 we	 announced	 the	
acquisition	 of	 australian	8	 ball	a	 single
site	 operator	 based	 in	 dorset	 this	 new	
addition	 to	 the	 sceptre	 leisure	 plc	 group	
was	a	 combined	 cash	 and	 shares	 deal	
with	a	 total	 value	 of	 £11m	 the	 acquired	
business	 strengthened	 our	 position	 in	
the	 south	 and	 southwest	 of	 england	
and	 has	 begun	 to	 offer	 both	 financial	 and	
operational	 benefits	 to	 the	 organisation
on	 19	 april	 2010	 we	 completed	 the	 sale		
of	 our	 fixed	 odds	 betting	 terminal	
fobt	 estate	 to	 global	 draw	 limited		
a	 subsidiary	 of	 scientific	 games	 this	
followed	 the	 end	 of	 our	 exclusivity	 deal	
with	 videobet	 and	 playtech	 plc	 with	
whom	 we	 had	 pioneered	 the	 introduction	
and	 rollout	 of	 marketleading	 technology	
in	 the	 licensed	 betting	 office	 lbo	
market	 the	 sale	 for	a	 cash	 consideration	
of	 £375m	 generated	a	 profit	 of	 £08m	
for	 the	 group	 the	 deal	 was	 particularly	
timely	 given	 the	 increasing	 levels	 of	
uncertainty	 and	 regulatory	 restrictions	
surrounding	 the	 operation	 of	 fobts		
in	 the	 uk
that	 we	 have	 achieved	 the	 above	
during	 the	 worst	 recession	 in	 50	 years	
is	 testament	 to	 the	 hard	 work	 and	
dedication	 of	 our	 employees	 across	 all	
of	 our	 trading	 divisions	 we	 continue	
to	 differentiate	 ourselves	 from	 the	
competition	 by	 offering	 excellent	
customer	 service	 and	a	 ‘cando’	
operational	 attitude	i	 would	 like	 to	 place	
on	 record	 my	 thanks	 to	 all	 employees	 and	
directors	 for	 their	 continued	 efforts	 over	
the	 course	 of	 the	 year
the	 year	 also	 saw	a	 number	 of	 changes	
to	 the	 board	 of	 directors	 in	 january	
2010	 lesley	 humphrys	 stepped	 down	 as	
finance	 director	 in	 order	 to	 concentrate	
on	 the	 operations	 of	 sceptre	 leisure	
solutions	 our	 principal	 trading	 subsidiary	
i	 would	 like	 to	 take	 the	 time	 on	 behalf		
of	 the	 board	 to	 express	 our	 thanks	 for		
her	 hard	 work	 and	 diligence
in	 may	 2010	 the	 role	 of	 finance	 director	
was	 taken	 over	 by	 mark	 white	 previously	
fd	 of	 gamingking	 plc	 and	 who	 has	 been	
with	 the	 group	 since	 2006
finally	 brian	 nichols	a	 founder	 of	
lotteryking	 limited	 and	 main	 board	
member	 since	 the	 group’s	 flotation	 in	
1996	 retired	 from	 the	 board	 in	 may	 2010	
once	 again	i	 would	 like	 to	 thank	 brian	 on	
behalf	 of	 the	 board	 for	 his	 dedication	 and	
unstinting	 efforts	 over	 the	 past	 24	 years	
i	 am	 pleased	 to	 report	 that	 brian	 remains	
within	 the	 group	 in	 an	 advisory	 capacity
in	 closing	i	 believe	 that	 we	 remain	 well
placed	 to	 take	 advantage	 of	 consolidation	
within	 the	 market	 we	 have	 funds	
available	 to	 grow	 either	 organically	
through	 contract	 wins	 or	 by	 means		
of	 further	 acquisition	 opportunities
douglas yates
chairman	
29	 september	 2010 08 sceptre leisure plc
	 annual 	 report	 and	 accounts	 2010
chief executive’s review
building the business
nationwide locations
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
on call
we	 like	 to	 talk	 to	 our	 customers	 to	 ensure		
that	 we	 understand	 their	 requirements		
we	 provide	 telephone	 service	 cover	 364	 days	
a	 year	
i	 am	 pleased	 to	 be	 able	 to	 report	
a	 strong	 set	 of	 results	 for	 the	 year	
ended	 30	 april	 2010
we	 have	 continued	 the	 progress	 outlined	
in	 our	 interim	 results	 with	 growth	 in	 both	
revenue	 and	 earnings	 compared	 to	 the	
previous	 year	 continuing	 our	 12year	
unbroken	 run	 of	 profitable	 growth
performance overview
the	 period	 under	 review	 has	 provided	
much	 in	 the	 way	 of	 challenge	 whether	
due	 to	 recession	 pub	 closures	 or	
instability	 in	 the	 financial	 markets	
however	 sceptre	 has	 continued	 to	
grow	 and	 develop	 operations	 in	 all	
areas	 of	 the	 business
we	 have	 maintained	 or	 increased	 our	
asset	 usage	 and	 staffing	 ratios	 whilst	
continuing	 to	 offer	 unrivalled	 service	
to	 our	 customers	 in	 the	 licensed	 trade	
across	 the	 uk
during	 the	 course	 of	 the	 year	 we	 undertook	
several	 important	 transactions	a	 share	
placing	 an	 acquisition	 and	a	 strategic	
disposal	 were	 all	 successfully	 completed
i	 would	 like	 to	 take	 this	 opportunity	 to	
summarise	 the	 activities	 in	 each	 of	 our	
three	 trading	 divisions
sceptre leisure solutions
sceptre	 leisure	 solutions	 forms	 the	
backbone	 of	 our	 group	 it	 provides	 over	
90	 of	 our	 revenues	 and	 continues		
to	 grow
the	 division	 is	 the	 secondlargest	
operator	 of	 amusement	 machines	 in	 the	
uk	 licensed	 market	 likeforlike	 revenues	
and	 machine	 numbers	 grew	 during	 the	
year	 against	a	 backdrop	 of	 continuing	
pub	 closures
sceptre	 leisure	 solutions’	 success	 is	
built	 on	 strict	 adherence	 to	 operational	
ratios	 and	 key	 performance	 indicators	
average	 weekly	 rental	 returns	 fell	
during	 the	 year	 due	 to	 two	 main	 factors	
the	 first	 was	 the	 sale	 of	 our	 fobt	 rental	
business	 which	 achieved	 high	 income	
per	 machine	 but	 with	 correspondingly	
high	 maintenance	 cost	 the	 second	 factor	
was	 the	 significant	 decline	 in	 swp	 skills	
with	 prizes	 or	 quiz	 machine	 income	
due	 to	 the	 withdrawal	 of	 certain	 games	
due	 to	 new	 regulations	 weekly	 machine	
rentals	 in	 this	 sector	 fell	 by	 17	 over	 the	
course	 of	 the	 year	 in	 the	 face	 of	 this	 an	
8	 overall	 decrease	 in	 machine	 week	
average	 represents	a	 good	 peformance	
in	 the	 current	 market	 we	 maintained	
or	 improved	 all	 of	 our	 other	 measures	
disclosed	 more	 fully	 in	 the	 financial	
review	 on	 page	 16
sceptre	 leisure	 solutions	 continued	
to	 win	 new	 business	 during	 the	 year	
with	 contract	 awards	 from	 highquality	
operators	 such	 as	 whitbread	 and	
also	 contract	 renewals	 from	 existing	
customers	 such	 as	 ssp	 which	 operates	
at	 train	 stations	 across	 the	 uk	
profit before taxation
£19m
37
machine asset utilisation
95
2009	 95
for	 more	 information	 on		
our	 business	 please	 go	 to	
wwwsceptreleisureplccouk
u 		 sceptre leisure plc 09
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business review pages 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
the combination 
of our recent 
acquisition and 
contract wins gives 
us a great platform 
from which to build  
the business
ken turner
chief	 executive	 officer 10 sceptre leisure plc
	 annual 	 report	 and	 accounts	 2010
chief executive’s review
continued
on the 
cards
sceptre leisure plc
report and accounts 2010
sales of over 55m lottery 
tickets annually sceptre 
market share increasing 
and new tickets launched 
with higher percentage 
payouts we are also one 
of the largest suppliers of 
bingo tickets in the uk 		 sceptre leisure plc 11
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business review pages 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
our	 success	 in	 winning	 and	 retaining	
business	 is	 due	 to	a	 combination	 of	
marketleading	 customer	 service	 and	
the	 operational	 knowhow	 provided	
by	 our	 experienced	 and	 dedicated	
operational	 staff
the	 growth	 has	 continued	 into	 the		
new	 financial	 year	 with	a	 significant	
contract	 award	 from	 punch	 pub	 company	
this	 new	 partnership	 will	 increase	 our	
machine	 estate	 by	 around	 1000	 pieces	 in	
the	 second	 half	 of	 201011
during	 the	 year	 ended	 30	 april	 2010	
sceptre	 leisure	 solutions	 achieved	
revenue	 growth	 of	 66	 and	 machine	
number	 growth	 excluding	 disposals		
of	 37
australian 8 ball acquisition
on	 15	 december	 2009	 sceptre	 leisure	 plc	
announced	 the	 acquisition	 of	 australian	
8	 ball	 company	 limited	 based	 in	 dorset	
which	 operated	 in	 410	 sites	 predominately	
across	 the	 south	 and	 southwest	 of	
england
the	 acquisition	 of	 australian	8	 ball	
strengthened	 sceptre’s	 position	 in	 the	
important	 southern	 marketplace	 and	
added	a	 strategically	 important	 depot	
in	 that	 area
as	 is	 the	 sceptre	 way	 integration	 of	
australian	8	 ball	 into	 our	 business	 was	
effected	 quickly	 and	 efficiently	 with	
full	 operational	 transition	 into	 sceptre’s	
marketleading	 systems	 and	 processes	
being	 completed	 within	 four	 weeks
the	 group	 continues	 to	 look	 for	 similar 	
earningsenhancing	 acquisitions	 within	
the	 fragmented	 machineoperator	 market	
i	 believe	 that	 there	 are	a	 number	 of	 such	
acquisitions	 that	 could	 be	 made	 each	 of	
which	 would	 provide	 significant	 benefits	
both	 operationally	 and	 financially	
we	 remain	 committed	 to	 our	 strategy	
of	 organic	 growth	 coupled	 with	 selective	
acquisition
sale of fixed odds betting terminal 
rental assets 
on	 19	 april	 2010	 the	 group	 sold	 its	
fixed	 odds	 betting	 terminal	 fobt	
rental	 assets	 to	 global	 draw	 limited	 for	a	
total	 cash	 consideration	 of	 £375m
whilst	 we	 had	 worked	 hard	 in	 our	
partnership	 with	 playtech	 and	 video	 bet	
to	 rollout	 their	 software	 platform	 to	 the	
uk	 licensed	 betting	 office	 lbo	 market	
we	 recognised	 two	 factors	 affecting	 our	
ability	 to	 grow	 further	 in	 this	 particular	
sector 	 the	 first	 was	 growing	 uncertainty	
over	 the	 future	 regulatory	 framework	
under	 which	 the	 fobt	 machines	 would	
operate	
amusement with prizes
amusement	 with	 prizes	 awp	 commonly	
called	 fruit	 machines	 provide	 an	 essential	
source	 of	 income	 for	 many	 of	 the	 uk’s	 pubs	
and	 clubs	 our	 long	 experience	 of	 operating	
in	 this	 sector	 allows	 us	 to	 help	 our	 customers	
maximise	 their	 profits	 from	 these	 machines
1
2
3
4
5
6
7
8
9
10
11
13
12
piecespersonnel ratio
48
2009	 46
1 birmingham	
2 bristol	
3 cardiff
4 crewe	
5 leeds	
6 london	 east
7 london	 west
8 nottingham
9 bournemouth
10 pl ymouth
11 preston	
12 scotland
13 washington
sceptre leisure service centres
the	 second	 was	 the	 high	 level	 of	 capital	
investment	 required	 to	 grow	 the	 machine	
base	a	 typical	 fobt	 costs	 more	 than	 twice	
as	 much	 as	a	 fruit	 machine	 for	a	 pub	 or	
club	 but	 provides	 only	 50	 more	 by	 way	
of	 rental	 income 12 sceptre leisure plc
	 annual 	 report	 and	 accounts	 2010
chief executive’s review
continued
on call
as	 part	 of	 our	 strategy	 for	 growth	 we		
commissioned	a	 new	 customer	 service	
centre	 which	 opened	 in	 january	 2010
the	 fobt	 rental	 assets	 comprised	 751	
terminals	 and	 associated	 customer	
contracts	 with	a	 net	 book	 value	 of	 £30m	
the	 full	 amount	 of	 the	 consideration	
was	 paid	 in	 cash	 on	 completion	 and	
generated	a	 oneoff	 profit	 on	 disposal	
of	 £08m	 which	 is	 recognised	 in	
these	 results
this	 sale	 of	a	 noncore	 part	 of	 our	
business	 was	 at	a	 significant	 profit	
its	 disposal	 freed	 up	 capital	 and	 resources	
across	 the	 business	 to	 focus	 on	 the	
rollout	 of	 machines	 to	 our	 traditional	
markets	 in	 pubs	 and	 other	 leisure	 outlets	
where	 we	 continue	 to	 see	 strong	 demand
share placing
on	5	 july	 2009	 we	 completed	 the	
placing	 of	 16603400	 new	 ordinary	
shares	 with	 hillroad	 investments	 limited	
at	a	 price	 of	 331p	 per	 share	 thereby	
raising	 gross	 proceeds	 of	 £55m		
this	 represents	 299	 of	 our	 enlarged	
share	 capital	 as	 at	 30	 april	 2010
the	 lack	 of	 availability	 of	 asset	 finance	
had	 constrained	 us	 from	 continuing	 to	
grow	 the	 business	 in	 the	 early	 part	 of	 the	
financial	 year	 in	 the	 same	 period	 there	
had	 been	 considerable	 consolidation	
in	 the	 gaming	 machine	 supply	 market	
this	 consolidation	 opened	 up	 significant	
opportunities	 to	 win	 additional	 business	
with	 some	 of	 the	 major	 pub	 companies	
within	 the	 uk	
i	 am	 delighted	 to	 welcome	 hillroad	 as	a	
substantial	 shareholder 	 the	 additional	
capital	 has	 allowed	 us	 to	 drive	 our	
business	 forward	 and	 to	 take	 advantage	
of	 some	 of	 the	 significant	 opportunities	
that	 exist	 in	 our	 marketplace	
lotteryking
the	 registered	 members’	 club	 market	
endured	a	 difficult	 year	 footfall	 was	
down	 with	 many	 sites	 finding	 income	
difficult	 to	 come	 by	
during	 the	 year	 we	 reviewed		
lotteryking’s	 operational	 structure	 and	
relocated	 all	 telesales	 and	 administrative	
functions	 to	 our	 preston	 head	 office	
in	 doing	 so	 we	 incurred	 oneoff	 costs	
totalling	 £05m	 in	 redundancy	 and	
provision	 for	 future	 property	 costs	 at	 our	
hainault	 facility
in	 spite	 of	 this	 lotteryking	 has	 increased	
market	 share	 with	 machine	 numbers	
increasing	 by	 15	 over	 the	 course	 of	
the	 year
lotteries	 provide	a	 valuable	 taxfree	
income	 stream	 for	 clubs	 and	 lotteryking	
has	 the	 largest	 range	 of	 tickets	 in	
the	 market	 to	 help	 them	 raise	 funds	
successfully
lotteryking’s	 customer	 base	 has	 also	
allowed	 sceptre	 to	 begin	 penetrating	 the	
club	 market	 and	i	 would	 expect		
this	 steady	 growth	 to	 continue	 in	 the	
coming	 months
kelly’s eye
in	 addition	 to	 private	 lotteries	 registered	
members’	 clubs	 rely	 on	 the	 income	
generated	 from	 bingo	 and	 other	
fundraising	 activities	 these	 indoor	 games	
also	 provide	a	 popular	 and	 enjoyable	
pastime	 for	 members	 of	 these	 clubs
machine rental income
£388m
2009	 £364m
on call 		 sceptre leisure plc 13
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business review pages 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
on the 
money
we moved quickly to 
introduce the new 
higher jackpot levels – 
approximately 80 of 
our awp machines now 
feature a £70 payout
for	 more	 information	 on	 	
our	 business	 please	 go	 to	
wwwsceptreleisureplccouk
u 14 sceptre leisure plc
	 annual 	 report	 and	 accounts	 2010
chief executive’s review
continued
on 
cue
video games
in	 addition	 to	 fruit	 machines	 pool	 tables		
and	 jukeboxes	 we	 also	 supply	a	 wide	 range		
of	 video	 games	 		 sceptre leisure plc 15
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business review pages 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
awp maximum prize value
£70
2009	 £35
available service cover days per year
364
we	 are	 beginning	 to	 see	 these	 activities	
being	 replicated	 in	 the	 pub	 market	
bingo	 nights	 are	 becoming	 more	 popular	
as	 landlords	 look	 to	 gain	 additional	
midweek	 custom	 and	 sceptre’s	 sales	
and	 operational	 team	 is	 ideallyplaced	
to	 deliver	 these	 fundraising	 items	 to	
pubs	 over	 the	 course	 of	 the	 year	 we	
introduced	 our	 ‘collectors	 deliver’	
programme	 whereby	 pubs	 could	 order	
from	 their	 regular	 machine	 collector 	
and	 have	 these	 goods	 personally	
delivered	 at	 the	 next	 collection
this	 has	 proven	 to	 be	a	 popular	
service	 and	 we	 are	 now	 working	 on	
the	 introduction	 of	a	 comprehensive	
catalogue	 containing	a	 complete	 range	
of	 products	 for	 the	 pub	 or	 club
the	 catalogue	 will	 be	 sent	 to	 all	 12000	
of	 our	 customers	 during	 the	 course	 of	
october 	 and	 will	 be	 followed	 up	 by	a	
telesales	 marketing	 campaign	 to	 generate	
new	 sales	 from	 our	 existing	 client	 base
this	 catalogue	 will	 be	 backed	 by	 our	
ecommerce	 websites	 also	 offering	 the	
full	 range	 of	 products	 to	 ensure	 that	
our	 customers	 can	 order	 goods	 at	a	 time	
and	 place	 that	 is	 convenient	 to	 them
outlook
i	 believe	 that	 the	 past	 year	 has	 left	
sceptre	 well	 placed	 to	 take	 advantage	
of	 the	 many	 opportunities	 that	 exist	
in	 the	 pub	 and	 club	 markets
we	 continue	 to	 win	 business	 from	 the	
competition	 through	 our	 offering	 of	
highquality	 service	 and	 marketleading	
products	 our	 recent	 contract	 win	 with	
punch	 pub	 company	 demonstrates	 that	
sceptre	 is	 now	 seen	 as	a	 leading	 machine	
operator	 by	 the	 uk’s	 premium	 pub	
companies
there	 are	a	 number	 of	 acquisition	
opportunities	 within	 the	 machine	 operating	
market	 which	 could	 be	 integrated	 into	
our	 existing	 depot	 infrastructure	 to	
deliver	 enhanced	 future	 earnings	 we	 will	
continue	 to	 assess	 these	 opportunities	
and	 pursue	 those	 that	 we	 feel	 offer	 the	
clearest	 benefits	 to	 our	 organisation
we	 have	 demonstrated	 that	 sceptre	 can	
continue	 to	 grow	 and	 prosper	 in	a	 difficult	
market	 and	 we	 remain	 confident	 that	 we	
can	 continue	 to	 do	 so	 in	 the	 coming	 year
ken turner
chief	 executive	 officer	
29	 september	 2010 16	 sceptre	leisure	plc
	 annual 	 report	 and	 accounts	 2010
financial	review
strong	performance
introduction
i	 would	 like	 to	 take	 the	 opportunity	 to	
review	 some	 key	 areas	 of	 our	 financial	
performance	 in	 the	 year	 under	 report
revenue
group	 turnover	 increased	 by	 9	 to	
£428m	 due	 both	 to	 acquisitions	 and	
organic	 growth
rental	 income	 increased	 by	 7	 to	
£388m	 with	 other	 streams	 amounting	
to	 £41m
profitability
operating	 profit	 before	 exceptional	
items	 increased	 by	 8	 to	 £40m	 whilst	
profit	 before	 tax	 increased	 by	 37	 to	
£19m	 the	 machine	 sales	 and	 rental	
division	 representing	 91	 of	 the	 group	
revenues	 increased	 operating	 profit	
by	 20	 to	 £51m
corporate	 overheads	 amounted	 to	
£09m	 2009	 £05m	 and	 comprised	
the	 costs	 of	 the	 board	 legal	 professional	
and	 other	 fees	 connected	 with	 running	
a	 public	 company	 the	 comparative	 cost	
in	 2009	 in	 this	 area	 relates	 to	 the	 seven	
months	 following	 the	 reverse	 takeover	
of	 gamingking	 plc	 in	 september	 2008
other	 divisions	 contributed	 an	 operating	
loss	 of	 £09m	 2009	 £02m	 during	
the	 year	 much	 of	 this	 was	 due	 to	 the	
restructure	 of	 lotteryking	 with	 all	
administrative	 and	 distribution	 processes	
relocating	 to	 the	 preston	 head	 office	
during	 the	 year	 the	 exceptional	 costs	
relating	 to	 this	 are	 disclosed	 in	 note	4	
to	 the	 financial	 statements	 and	 included	
a	 provision	 for	 onerous	 leases	 on	 our	
hainault	 facility	 of	 £05m	 the	 lease	 on	
this	 property	 was	 signed	 in	 1993	 with	
a	 25year	 term	 and	 no	 break	 clauses	
given	 the	 current	 state	 of	 the	 commercial	
property	 market	 we	 have	 therefore	
provided	 in	 full	 for	 the	 remaining	 term	
of	 the	 lease
there	 was	 also	 an	 employee	 sharebased	
payment	 charge	 recognised	 in	 the	 year	
of	 £01m	 2009	 £01m
finance	costs
the	 net	 finance	 costs	 charged	 to	 income	
were	 £14m	 2009	 £21m	 of	 which	 £14m	
was	 cash	 interest	 the	 balance	 related	 to	
a	 noncash	 interest	 rate	 swap	 movement	
of	 £01m	 gain	 2009	 £04m	 loss	
this	 derivative	 contract	 was	a	 condition	
of	 the	 group’s	 banking	 agreements	 with	
bank	 of	 scotland	 now	 part	 of	 lloyds	
banking	 group	 and	 will	 continue	 to	 run	
alongside	 this	 facility	 until	 the	 end	 of	 the	
term	 loan	 in	 october	 2012
earnings	per	share
basic	 earnings	 per	 share	 increased	 to	
30p	 2009	 26p
share	placing
on	5	 july	 2009	 the	 company	 placed	
16603400	 ordinary	 5p	 shares	 with	
hillroad	 investments	 limited	 at	a	 price	 of	
331p	 per	 share	 thereby	 raising	 proceeds	
of	 £55m	 these	 shares	 represent	 2989	
of	 the	 company’s	 issued	 share	 capital	 as	
at	 the	 date	 of	 these	 accounts
acquisition
on	 15	 december	 2009	 sceptre	 leisure	
plc	 announced	 the	 acquisition	 of	
australian	8	 ball	 company	 limited	
in	a	 combined	 cash	 and	 shares	 deal	
the	 acquisition	 is	 disclosed	 in	 note	 15	
to	 the	 consolidated	 financial	 statements
exceptional	costs
during	 the	 year	 the	 group	 incurred	
certain	 oneoff	 restructuring	 costs	
these	 centred	 on	 provisions	 for	
redundancy	 and	 onerous	 leases	 for	
properties	 which	 are	 no	 longer	 required	
following	a	 restructure	 of	 lotteryking	
all	 onerous	 lease	 amounts	 payable	 have	
been	 fully	 provided	 for	 up	 to	 the	 first	
available	 term	 break
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	
£02m	 2009	 nil	 finally	 the	 fair	 value	
adjustment	 under	 ifrs3	 following	 the	
acquisition	 of	 australian	8	 ball	 company	
led	 to	 the	 recognition	 of	 negative	
goodwill	 of	 £02m	 these	 costs	 are	 set	
out	 in	 note	4	 to	 the	 consolidated	 financial	
statements
sale	of	fixed	odds	betting	terminal	
fobt	assets
on	 19	 april	 2010	 the	 group	 sold	 its	 fobt	
rental	 assets	 to	 the	 global	 draw	 limited	
for	a	 total	 cash	 consideration	 of	 £375m	
the	 business	 comprised	 property	 plant	
and	 equipment	 with	a	 net	 book	 value	 of	
£28m	 and	 intangible	 assets	 customer	
contracts	 with	a	 net	 book	 value	 of	 £02m
key	performance	indicators
the	 board	 of	 sceptre	 leisure	 plc	 monitors	
a	 range	 of	 financial	 and	 nonfinancial	
performance	 indicators	 reported	 on	a	
periodic	 basis	 to	 measure	 performance	
against	 expected	 targets	 these	 include
financial 2010 2009
1 earnings	 per	 share	
before	 exceptional	
items
41p 30p
2 ebitda £138m £130m
nonfinancial
3 machine	 numbers 21300 20900
4 machine	 week	
average	
£3584 £3892
5 piecespersonnel	
ratio
48 46
6 asset	 utilisation 95 95
capital	expenditure
capital	 expenditure	 was	 £124m	 in	 2010	
£148m	 the	 level	 of	 capital	 expenditure	
was	 proportionally	 higher	 in	 the	 first	 half	
of	 the	 year	 £7 4m	 due	 to	 investment	 in	
new	 machines	 following	 the	 introduction	
of	 new	 stakes	 and	 prizes	 for	 awps	 in	
july	 2009	 capital	 expenditure	 remains	
focused	 on	 our	 machine	 estate	 with	
£118m	 of	 expenditure	 2009	 £139m	
the	 remaining	 expenditure	 was	 on	
improved	 warehousing	 facilities	 at	
our	 head	 office	 £01m	 and	 motor	
vehicles	 £02m 		 sceptre	leisure	plc	 17
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	review	 pages	06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
prior	year	adjustment
during	 the	 year	 the	 group	 revised	 its	
method	 of	 allocating	 interest	 over	 the	 life	
of	 the	 lease	 term	 in	 order	 to	 give	a	 better	
approximation	 of	a	 constant	 periodic	 rate	
of	 interest	 on	 the	 remaining	 balance	 of	
the	 liabiliy	 in	 accordance	 with	 ias	 17	
leases	 the	 effect	 of	 this	 restatement	 is		
to	 increase	 the	 2009	 finance	 cost	 by	
£190000	 reduce	 profit	 before	 taxation	
for	 2009	 by	 £190000	 increase	 interest	
bearing	 loans	 and	 borrowings	 as	 at	
30	 april	 2009	 by	 £248000	 and	 reduce	
net	 assets	 as	 at	 30	 april	 2009	 by	
£248000	 an	 adjustment	 of	 £58000		
has	 also	 been	 made	 to	 reduce	 retained	
earnings	 as	 at	1	 may	 2008	 to	 correct	 the	
impact	 on	 prior	 periods	 this	 prior	 year	
adjustment	 is	 also	 disclosed	 in	 note	5	 to	
the	 consolidated	 financial	 statements
financing
net	 debt	 decreased	 to	 £159m	 compared	 to	
£195m	 as	 at	 30	 april	 2009	 this	 decrease	
is	 principally	 as	a	 result	 of	 the	 sale	 of	 the	
fobt	 rental	 assets	 immediately	 prior	 to	
year	 end	 at	 the	 end	 of	 april	 2010	 bank	
debt	 stood	 at	 £127m	 april	 2009	
£107m	 made	 up	 of	a	 loan	 of	 £62m	 an	
overdraft	 of	 £05m	 and	a	 revolving	 credit	
facility	 of	 £60m	 april	 2009	 loan	 £83m	
overdraft	 £24m	 the	 loan	 is	 repayable	
over	a	 fiveyear	 term	 ending	 in	
september	 2012
total	 bank	 loan	 repayments	 during	 the	
year	 were	 £21m	 in	 addition	 £15m	 on	
a	 vendor	 loan	 2009	 £22m	 remains	
outstanding	 this	 loan	 was	 created	 on	 the	
acquisition	 of	 the	 crown	 leisure	 estate	
and	 is	 repayable	 by	 2012	 with	 capital	
repayments	 of	 £07m	 being	 made	 during	
the	 year
the	 group	 uses	 finance	 leasing	 to	 acquire	
certain	 of	 its	 plant	 and	 equipment	
at	 the	 end	 of	 april	 2010	 asset	 finance	
outstanding	 totalled	 £55m	 2009	
£7 4m	 the	 leases	 are	 held	 with	 various	
financial	 institutions	 under	 differing	
terms	 but	 in	 general	 machine	 assets		
are	 financed	 over	a	 period	 of	 24	 months	
with	 commercial	 vehicles	 financed	 over		
a	 period	 of	 up	 to	 48	 months	
all	 key	 financing	 covenants	 have	 been	
met	 for	 the	 period
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	 bank	 loan	 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	 groups	
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		
its	 liabilities	 as	 they	 fall	 due	 with	 surplus	
facilities	 to	 cope	 with	 any	 unexpected	
variances	 in	 timing	 of	 cash	 flows		
at	 30	 april	 2010	 the	 group	 had	
undrawn	 borrowing	 facilities	 of	 £13m	
2009	 £31m	 of	 which	 £13m	 2009	
£12m	 were	 uncommitted	 in	 addition	
to	 undrawn	 borrowing	 facilities	 as	 at	
30	 april	 2010	 the	 group	 held	 on	 deposit	
cash	 of	 £42m
taxation
the	 effective	 tax	 rate	 for	 the	 year	 was	
153	 2009	 303
mark	white	
finance	 director	
29	 september	 2010
definitions
1			 earnings	 per	 share	 is	 calculated	 in	 note	 12	 to	 the	
group	 accounts
2	 		 ebitda	 is	 earnings	 before	 interest	 income	 tax	
expense	 depreciation	 amortisation	 exceptional	
items	 including	 impairment	 of	 intangibles		
and	 sharebased	 payment
	
3	 		 machine	 numbers	 is	 the	 number		
of	 machines	 operated	 by	 the	 group
4	 		 machine	 week	 average	 is	 the	 sevenday	 average	
gross	 rent	 received	 by	 the	 group	 per	 machine	
operated
	
5	 	 personnel	 ratio	 is	 the	 number	 of	 machines	
operated	 per	 person	 employed	 within	 sceptre	
leisure	 solutions
6	 	 asset	 utilisation	 is	 the	 percentage		
of	 machines	 currently	 sited 18	 sceptre	leisure	plc
	 annual 	 report	 and	 accounts	 2010
principal	risks	and	uncertainties
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
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
economic
prolonged economic 
recession in the uk
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
monthly	 reports	 by	 business	 units	 to	 identify	
trading	 performance	 against	 forecast
monitoring	 of	 kpis	 and	 staffmachine	 ratios
develop	 relationships	 with	 highquality	
customers
swift	 actions	 taken	 to	 reduce	 capacity	 and	
overhead	 where	 necessary
financial
withdrawal of asset 
finance lines or 
working capital facility
limit	 to	 the	 group’s	 ability	 to	 fund	
capital	 expenditure	 for	 continued	
growth	 or	 machine	 injection	 or	
provide	 appropriate	 working	 capital
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
people
loss of key 
personnel
damage	 to	 customer	 relationships
loss	 of	 operational	 knowledge
shortmediumterm	 disruption	
to	 the	 business
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	description potential	impact mitigation 		 sceptre	leisure	plc	 19
	 	 annual 	 report	 and	 accounts	 2010
risk	description potential	impact mitigation
operational
poorly performing 
acquisitions
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
loss of major 
customer
reduction	 in	 future	 profitability		
and	 cash	 flow
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
prolonged and 
significant machine 
frauds
operational	 disruption	 to	 rectify	
security	 problems
reduced	 machine	 take	 to	 affect	
customer	 profitability
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
regulatory
industryspecific 
increases in tax  
and duties
reduction	 in	 target	 market
limit	 to	 group’s	 ability		
to	 meet	 targets
reduction	 in	 future	 profitability		
and	 cash	 flow
ensure	 professional	 advice	 sought
supply	 input	 to	 government	 consultations
review	 customer	 contracts	 to	 ensure		
that	 regulatory	 and	 tax	 risk	 is	 adequately	
addressed
overview	 pages	 01–05
business	review	 pages	06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68 20	 sceptre	leisure	plc
	 annual 	 report	 and	 accounts	 2010
board	of	directors
douglas	yates
independent	 nonexecutive	 chairman
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
kenneth	turner
chief	 executive	 officer
ken	 turner	 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	 uk	
ltd	 and	 grand	 metropolitan	 and	 spent	
earlier	 parts	 of	 his	 career	 with	 argyle	
group	 fw	 woolworths		 northern	 foods
guy	van	zwanenberg
nonexecutive	 director
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
mark	white
finance	 director
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
victor	wardman
nonexecutive	 director
victor	 wardman	 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 		 sceptre	leisure	plc	 21
	 	 annual 	 report	 and	 accounts	 2010
secretary	and	advisors
company	secretary
guy van zwanenberg
registered	office
139	 brookfield	 place	
walton	 summit	
preston	
pr5	 8bf
registered	number
31897 47
nomad	and	broker
seymour	pierce	limited
20	 old	 bailey	
london	
ec4m	 7en
statutory	auditor
grant	thornton	uk	llp
4	 hardman	 square	
spinningfields
manchester
m3	 3eb	
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
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68 22	 sceptre	leisure	plc
	 annual 	 report	 and	 accounts	 2010
directors’	report
the	 directors	 present	 their	 directors’	
report	 and	 financial	 statements	 for	 the	
year	 ended	 30	 april	 2010
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	8	 to	 15	 and	 the	 financial	 review	
on	 pages	 16	 and	 17	 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	 non
financial	 key	 performance	 indicators	
these	 key	 performance	 indicators	 kpis	
are	 monitored	 on	a	 monthly	 basis	 and	 are	
set	 out	 in	 the	 finance	 director’s	 review	
on	 pages	 16	 and	 17
principal	risks	and	uncertainties
a	 review	 of	 the	 principal	 risks	 and	
uncertainties	 is	 on	 pages	 18	 and	 19	 and	
forms	 part	 of	 this	 directors’	 report
proposed	dividend
the	 directors	 do	 not	 recommend	 the	
payment	 of	a	 dividend	 2009	 nil
directors
during	 the	 year	 the	 directors	 of	 sceptre	
leisure	 plc	 were	 as	 follows
douglas	 yates
kenneth	 turner
lesley	 humphrys	 to	 27	 january	 2010
brian	 nichols
guy	 van	 zwanenberg
victor	 wardman
adrian	 gare	 from	 27	 january	 2010		
to	 26	 april	 2010
mark	 white	 from	1	 may	 2010
mark	 white	 who	 was	 appointed	a	 director	 since	 the	 last	 annual	 general	 meeting	 retires	 in	 accordance	 with	 the	 articles	 of	
association	 and	 being	 eligible	 offers	 himself	 for	 reelection
guy	 van	 zwanenberg	 retires	 by	 rotation	 and	 being	 eligible	 offers	 himself	 for	 reelection
brian	 nichols	 retired	 from	 the	 board	 on	 30	 may	 2010
directors’	interests
the	 directors’	 beneficial	 interests	 in	 the	 shares	 of	 the	 company	 as	 at	 30	 april	 2010	 are	 as	 follows
30	april	2010
sceptre	leisure	plc
5p	ords
30	 april	 2009
sceptre	 leisure	 plc
5p	 ords
	 number percentage number percentage
douglas	 yates 13000 002 13000 003
kenneth	 turner 10921761 1966 10921761 1966
lesley	 humphrys 994049 179 994049 256
brian	 nichols 320853 058 320853 083
guy	 van	 zwanenberg 40200	 007 40200 010
victor	 wardman 10921632 1966 10921632 1966
mark	 white 4000 001 4000 001
directors’	 interests	 in	 share	 options	 are	 set	 out	 in	 note	 25	 to	 the	 financial	 statements
substantial	interest	in	share	capital
as	 at	 24	 september	 2010	 the	 company	 was	 aware	 of	 the	 following	 holdings	 in	 addition	 to	 those	 of	 the	 directors	 disclosed	 above		
of	 3	 or	 more	 of	 the	 nominal	 value	 of	 the	 company’s	 shares
name shareholding 
hillroad	 investments	 limited 16603400	 2989
anthony	 yates 5434997	 978
stuart	 jackson 2168835	 390
the	 interests	 and	 percentages	 shown	 above	 are	 calculated	 by	 reference	 to	 the	 company	 share	 capital	 in	 issue	 as	 at	 30	 april	 2010		
at	 that	 date	 the	 total	 number	 of	 sceptre	 leisure	 plc	 shares	 in	 issue	 was	 55545542
financial	instruments
the	 group’s	 treatment	 of	 financial	 instruments	 is	 disclosed	 in	 note	1	 to	 the	 financial	 statements 		 sceptre	leisure	plc	 23
	 	 annual 	 report	 and	 accounts	 2010
third	party	indemnity	provision
during	 the	 year	 the	 group	 took	 out	
qualifying	 third	 party	 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
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		
45	 days	 2009	 47	 days	 purchases		
in	 trade	 payables
political	and	charitable	contributions
charitable	 donations	 during	 the	 year	
totalled	 £10900	 2009	 £3300		
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	 finance	 director	 and	 one	
other	 executive	 director 	 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	 12	 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	 auditors	 and	 reviewing	
their	 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	 auditors	
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
directors’	remuneration
salary
£000
expenses
£000
bonus
£000
pension
£000
sharebased	
payment
£000
amounts	 paid	 to	
third	 parties	
£000
total
£000
douglas	 yates 50 – – – 4 – 54
kenneth	 turner 130 – – 18 19 – 167
lesley	 humphrys 63 – – 7 15 – 85
brian	 nichols 93 7 – 9 15 – 124
guy	 van	 zwanenberg – – – – 4 30 34
victor	 wardman 30 – – – 2 – 32
adrian	 gare 33 – – 4 – – 37
399 7 – 38 59 30 533
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68 24	 sceptre	leisure	plc
	 annual 	 report	 and	 accounts	 2010
directors’	report
continued
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	 201011
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	 chief	 executive’s	
review	 on	 pages	8	 to	 15	 the	 financial	
position	 of	 the	 group	 its	 cash	 flows	
liquidity	 position	 and	 borrowing	 facilities	
are	 described	 in	 the	 financial	 review	 on	
pages	 16	 and	 17	 in	 addition	 note	 29	 to	
the	 consolidated	 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	 exposure	 to	
credit	 risk	 and	 liquidity	 risk
as	 highlighted	 in	 note	1	 to	 the	 financial	
statements	 the	 group	 meets	 its	 day
today	 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	 it	 until	 2012	
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	 forseeable	 future
the	 directors	 have	 prepared	 trading	 and	
cash	 flow	 forecasts	 for	a	 period	 in	 excess	
of	 one	 year	 from	 the	 date	 of	 approval	 of	
these	 financial	 statements	 the	 forecasts	
make	 assumptions	 in	 respect	 of	 future	
trading	 conditions	 and	 in	 particular	 the	
directors’	 estimates	 of	 growth	 in	 the	
number	 of	 machines	 placed	 the	 post	
year	 end	 growth	 and	 the	 forecast	 growth	
in	 the	 number	 of	 machines	 can	 be	 fully	
funded	 from	 currently	 available	 finance	
facilities	 however 	 should	 certain	 lines	
be	 withdrawn	 the	 group	 has	 the	 ability	
to	 reduce	 the	 level	 of	 growth	 and	 hence	
capital	 required	 should	 funds	 not	 be	
available	 however 	 the	 prepared	 forecasts	
suggest	 that	 the	 group	 retains	 sufficient	
headroom	 within	 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	 group	 and	 the	 company	 have	
adequate	 resources	 to	 continue	 in	
operational	 existence	 for	 the	 foreseeable	
future	 accordingly	 they	 continue	 to	
adopt	a	 going	 concern	 basis	 in	 preparing	
the	 annual	 report	 and	 accounts
disclosure	of	information	to	auditors
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	
auditors	 are	 unaware	 and	 each	 director	
has	 taken	 all	 the	 steps	 that	 heshe	 ought	
to	 have	 taken	 as	a	 director	 to	 make	
himselfherself	 aware	 of	 any	 relevant	
audit	 information	 and	 to	 establish	 that	
the	 company’s	 auditors	 are	 aware	 of	
that	 information
auditors
following	 the	 year	 end	 kpmg	 audit	 plc	
resigned	 as	 auditors	 of	 the	 company	
and	 grant	 thornton	 uk	 llp	 were	
appointed
in	 accordance	 with	 section	 489	 of	 the	
companies	 act	 2006	a	 resolution	 for	
the	 reappointment	 of	 grant	 thornton	
uk	 llp	 as	 auditors	 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
29	 september	 2010 		 sceptre	leisure	plc	 25
	 	 annual 	 report	 and	 accounts	 2010
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	 as	 required	 by	 the	 aim	 rules	 of	 the	
london	 stock	 exchange	 they	 are	 required	
to	 prepare	 the	 group	 financial	 statements	
in	 accordance	 with	 ifrss	 as	 adopted	
by	 the	 eu	 and	 applicable	 law	 and	 have	
elected	 to	 prepare	 the	 parent	 company	
financial	 statements	 in	 accordance	
with	 uk	 accounting	 standards	 and	
applicable	 law	 uk	 generally	 accepted	
accounting	 practice
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	
of	 the	 group	 and	 parent	 company	 and		
of	 their	 profit	 or	 loss	 for	 the	 group	 for	
that	 period
in	 preparing	 each	 of	 the	 group	 and		
parent	 company	 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	 they	 have	 been	 prepared	
in	 accordance	 with	 ifrss	 as	 adopted	 by	
the	 eu
•		 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	
group	 and	 the	 parent	 company	 will	
continue	 in	 business
the	 directors	 are	 responsible	 for	 keeping	
adequate	 accounting	 records	 that	 are	
sufficient	 to	 show	 and	 explain	 the	 parent	
company’s	 transactions	 and	 disclose	
with	 reasonable	 accuracy	 at	 any	 time	
the	 financial	 position	 of	 the	 parent	
company	 and	 enable	 them	 to	 ensure	 that	
its	 financial	 statements	 comply	 with	 the	
companies	 act	 2006	 they	 have	 general	
responsibility	 for	 taking	 such	 steps	 as	 are	
reasonably	 open	 to	 them	 to	 safeguard	 the	
assets	 of	 the	 group	 and	 to	 prevent	 and	
detect	 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
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68 26	 sceptre	leisure	plc
	 annual 	 report	 and	 accounts	 2010
independent	auditors’	report	to	the	members	of	sceptre	leisure	plc
we	 have	 audited	 the	 financial	 statements	
of	 sceptre	 leisure	 plc	 for	 the	 year	
ended	 30	 april	 2010	 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	 attributable	 to	 equity	
holders	 of	 the	 parent	 the	 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	 auditors’	 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	auditors
as	 explained	 more	 fully	 in	 the	 statement	
of	 directors’	 responsibilities	 set	
out	 on	 page	 25	 the	 directors	 are	
responsible	 for	 the	 preparation	 of	 the	
financial	 statements	 and	 for	 being	
satisfied	 that	 they	 give	a	 true	 and	 fair	
view	 our	 responsibility	 is	 to	 audit	 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	 wwwfrcorgukapb
scopeuknp 
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	 2010	 and	 of	 the	 group’s	 profit		
	 for 	 the	 year	 then	 ended	
•	the	 group	 financial	 statements	 have		
	 been	 properly	 prepared	 in	 accordance		
	 with	 ifrs	 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
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
29	 september	 2010 		 sceptre	leisure	plc	 27
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	statements	 pages	27–65
other	 information	 pages	 66–68
financial	statements
contents
	accounts
consolidated	 statement	 of	
comprehensive	 income 28
consolidated	 balance	 sheet 29
consolidated	 statement	 of	 cash	 flows 30
consolidated	 statement	 of	 changes	
in	 equity 31
notes	 to	 the	 financial	 statements 32
company	 balance	 sheet 61
notes	 to	 the	 company	 financial	 statements 62
	other	information
notice	 of	 annual	 general	 meeting 66
shareholder	 notes 68 28	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
continuing	 operations note
30	 april	 2010
£000
restated
30	 april	 2009
£000
revenue 23 42808 39205
direct	 costs 29498 28068
gross	 profit 3 13310 11137
distribution	 costs 93 104
administrative	 expenses	–	 normal 9748 7 462
administrative	 expenses	–	 exceptional	 items 4 803 236
profit	 on	 disposal	 of	 tangible	 and	 intangible	 assets 535 154
operating	 profit 36 3201 3489
operating	 profit	 before	 exceptional	 items 4004 3725
exceptional	 items 4 803 236
finance	 income 8 124 –
finance	 costs 9 1414 2097
net	 finance	 expense 1290 2097
profit	 before	 taxation 1911 1392
tax	 expense 10 293 422
profit	 and	 total	 comprehensive	 income	 for	 the	 financial	 year 1618 970
profit	 and	 total	 comprehensive	 income	 attributable	 to
–	 equity	 holders	 of	 the	 parent 1587 937
–	 noncontrolling	 interest 31 33
1618 970
earnings	 per	 ordinary	 share
–	 basic 12 30p 26p
–	 diluted 12 28p 25p
	 results	 for	 the	 year	 ended	 30	 april	 2009	 are	 orb	 holdings	 limited	 for	 the	 full	 12	 months	 plus	 gamingking	 plc	 from	 the	 date	 of	 acquisition	 29	 september	 2008
these	 results	 have	 been	 adjusted	 from	 those	 previously	 published	 as	 described	 in	 note	5	 to	 the	 financial	 statements
the	 accompanying	 accounting	 policies	 and	 notes	 form	 an	 integral	 part	 of	 these	 financial	 statements
consolidated	 statement	 of	 comprehensive	 income
for	 the	 year	 ended	 30	 april	 2010 		 sceptre	 leisure	 plc	29
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
note £000
30	 april	
2010
£000 £000
restated
30	 april	
2009 £000
restated
29	 april	
2008
assets
noncurrent	 assets
intangible	 assets 13 5675 4924 2166
property	 plant	 and	 equipment 14 26975 26854 21732
derivative	 financial	 instruments 23 – – 7
total	 noncurrent	 assets 32650 31778 23905
current	 assets
inventories 16 1276 1092 585
trade	 and	 other	 receivables 17 5771 4744 2957
cash	 and	 cash	 equivalents 18 4163 719 449
total	 current	 assets 11210 6555 3991
total	 assets 43860 38333 27 896
liabilities
current	 liabilities
trade	 and	 other	 payables 19 7 533 9279 5331
corporation	 tax 612 1086 –
interest	 bearing	 loans	 and	 borrowings 20 7 887 10230 607 4
total	 current	 liabilities 16032 20595 11405
noncurrent	 liabilities
trade	 and	 other	 payables 19 130 468 433
interest	 bearing	 loans	 and	 borrowings 21 12193 10020 12469
deferred	 taxation 22 1976 916 959
derivative	 financial	 instruments 23 290 414 –
total	 noncurrent	 liabilities 14589 11818 13861
total	 liabilities 30621 32413 25266
net	 assets 13239 5920 2630
equity	
share	 capital 26 5394 4554 3
share	 premium	 account 27 4840 173 38
merger	 reserve 27 2232 2332 104
retained	 earnings 27 5166 3485 2478
equity	 attributable	 to	 equity	 holders	 of	 the	 parent 13168 5880 2623
noncontrolling	 interest 27 71 40 7
total	 equity 13239 5920 2630
these	 financial	 statements	 were	 approved	 and	 authorised	 for	 issue	 by	 the	 board	 of	 directors	 on	 29	 september	 2010	 and	 were	
signed	 on	 its	 behalf	 by
kenneth	 turner
director	
sceptre	 leisure	 plc	
company	 no	 031897 47
the	 accompanying	 accounting	 policies	 and	 notes	 form	 an	 integral	 part	 of	 these	 financial	 statements
consolidated	 balance	 sheet
at	 30	 april	 2010 30	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
note £000
30	 april	 2010
£000 £000
restated
30	 april	 2009
£000
cash	 flows	 from	 operating	 activities
profit	 before	 taxation 1911 1392
adjustments	 for
depreciation 14 9344 9002
amortisation 13 372 206
recognition	 of	 negative	 goodwill 15 225 –
impairment	 of	 intangible	 assets	 brand	 names 13 227 –
equitysettled	 share	 options 25 131 97
profit	 on	 disposal	 of	 property	 plant	 and	 equipment	 and	
intangible	 assets 535 154
finance	 gainloss	 on	 derivative	 financial	 instruments 124 421
finance	 costs 9 1414 1676
cash	 flows	 from	 operating	 activities	 before	 changes	 in	
working	 capital 12515 12640
changes	 in	 working	 capital
increase	 in	 inventories 180 217
increase	 in	 trade	 and	 other	 receivables 946 1213
decreaseincrease	 in	 trade	 and	 other	 payables 2612 2872
cash	 generated	 from	 operations 8777 14082
finance	 costs 9 1414 1513
income	 tax	 paidreceived 250 7
net	 cash	 from	 operating	 activities 7 113 12576
cash	 flows	 from	 investing	 activities
purchase	 of	 business	 net	 of	 cash	 acquired 15 996 652
purchase	 of	 property	 plant	 and	 equipment 14 12389 14843
sale	 of	 tangible	 and	 intangible	 assets 4557 1907
net	 cash	 used	 in	 investing	 activities 8828 13588
cash	 flows	 from	 financing	 activities
movement	 in	 bank	 loans	 and	 loan	 notes 2775 2225
revolving	 credit	 facility	 drawdowns 5999 –
finance	 lease	 rental	 paymentsdrawdowns 1576 2268
equity	 dividends	 paid 11 100 –
new	 shares	 issued 5497 –
net	 cash	 used	 ingenerated	 from	 financing	 activities 7045 43
net	 increasedecrease	 in	 cash	 and	 cash	 equivalents 5330 969
cash	 and	 cash	 equivalents	 at	 start	 of	 period 1637 668
cash	 and	 cash	 equivalents	 at	 end	 of	 period 18 3693 1637
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	 2010 		 sceptre	 leisure	 plc	 31
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
restated
30	 april	 2009
share	 capital
£000
share	 premium
account
£000
merger	 reserve
£000
retained
earnings
£000
equity
attributable	 to
equity	 holders	 of
the	 parent
£000
noncontrolling
interest
£000
total	 equity
£000
at	1	 may	 2008		
as	 previously	 reported 3 38 104 2536 2681 7 2688
prior	 year	 adjustment – – – 58 58 – 58
at	1	 may	 2008	 restated 3 38 104 2478 2623 7 2630
adjustments	 arising	 from	
reverse	 acquisition 4551 135 2436 – 2250 – 2250
employee	 sharebased	
payments – – – 97 97 – 97
taxation	 effect	 of	 employee	
sharebased	 payments – – – 27 27 – 27
transactions	 with	 owners 4551 135 2436 70 2320 – 2320
profit	 for	 the	 financial	 year	
and	 total	 comprehensive	
income – – – 937 937 33 970
at	 30	 april	 2009	 restated 4554 173 2332 3485 5880 40 5920
30	 april	 2010
share	 capital
£000
share	 premium
account
£000
merger	 reserve
£000
retained
earnings
£000
equity	
attributable	 to	
equity	 holders	
of	 the	 parent
£000
noncontrolling	
interest
£000
total	 equity
£000
at	1	 may	 2009	 restated 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
the	 accompanying	 accounting	 policies	 and	 notes	 form	 an	 integral	 part	 of	 these	 financial	 statements
consolidated	 statement	 of	 changes	 in	 equity
at	 30	 april	 2010 32	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
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	 29	 september	 2010
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	 59	 to	 64
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	 31
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	 2009
•	 ias	1	 presentation	 of	 financial	 statements	 revised	 2007
•	 ifrs	8	 operating	 segments
•	 amendments	 to	 ifrs	7	 financial	 instruments	 disclosures	–	 improving	 disclosures	 about	 financial	 instruments
significant	 effects	 on	 current	 prior	 or	 future	 periods	 arising	 from	 the	 first	 time	 application	 of	 these	 new	 requirements	 in	 respect	
of	 presentation	 recognition	 and	 measurement	 are	 described	 below	
adoption	 of	 ias	1	 presentation	 of	 financial	 statements	 revised	 2007
the	 group	 has	 adopted	 ias	1	 presentation	 of	 financial	 statements	 revised	 2007	 in	 its	 consolidated	 financial	 statements	
this	 standard	 has	 been	 applied	 retrospectively	 the	 adoption	 of	 the	 standard	 does	 not	 affect	 the	 financial	 position	 or	 profits	
of	 the	 group	 but	 gives	 rise	 to	 additional	 disclosures
ias	1	 revised	 2007	 affects	 the	 presentation	 of	 owner	 changes	 in	 equity	 and	 introduces	 an	 option	 to	 present	a	 single	 ‘statement	 of	
comprehensive	 income’	 or	 two	 statements	 the	 ‘statement	 of	 comprehensive	 income’	 and	a	 ‘statement	 of	 comprehensive	 income’	
the	 group	 has	 elected	 to	 present	 the	 ‘statement	 of	 comprehensive	 income’	 in	 one	 statement	
the	 measurement	 and	 recognition	 of	 the	 groups	 assets	 liabilities	 income	 and	 expenses	 is	 unchanged	
two	 comparative	 periods	 are	 presented	 for	 the	 balance	 sheet	 when	 the	 group
i	 applies	 an	 accounting	 policy	 retrospectively	 or
ii	 makes	a	 retrospective	 restatement	 of	 items	 in	 its	 financial	 statements
as	 the	 group	 has	 recognised	a	 retrospective	 restatement	 of	 items	 within	 its	 financial	 statements	 as	 explained	 in	 note	5	 to	 the	
financial	 statements	 the	 group	 has	 disclosed	 two	 comparative	 balance	 sheets	 and	 comparative	 restated	 notes	 where	 applicable	
other	 than	 this	 restatement	 other	 comparative	 items	 remain	 unchanged	 from	 those	 previously	 reported
adoption	 of	 ifrs	8	 operating	 segments
the	 adoption	 of	 this	 standard	 has	 not	 affected	 the	 identified	 operating	 segments	 for	 the	 group	 however 	 the	 accounting	 policy	 for	
identifying	 segments	 is	 now	 based	 on	 internal	 management	 reporting	 information	 that	 is	 regularly	 reviewed	 by	 the	 chief	 operating	
decision	 maker	 the	 board	 of	 directors	
notes
forming	 part	 of	 the	 financial	 statements 		 sceptre	 leisure	 plc	 33
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
1	 accounting	 policies	 continued
standards	 and	 interpretations	 effective	 in	 the	 current	 period	 continued
adoption	 of	 amendments	 to	 ifrs	7	 financial	 instruments	 disclosures	–	 improving	 disclosures	 about	 financial	 instruments
the	 amendments	 require	 additional	 disclosures	 for	 financial	 instruments	 that	 are	 measured	 at	 fair	 value	 in	 the	 balance	 sheet	 these	
fair	 value	 measurements	 are	 categorised	 into	a	 threelevel	 fair	 value	 hierarchy	 which	 reflects	 the	 extent	 to	 which	 they	 are	 based	 on	
observable	 market	 data	 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
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	 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
a	 separate	 quantitative	 maturity	 analysis	 must	 be	 presented	 for	 derivative	 financial	 liabilities	 that	 shows	 the	 remaining	 contractual	
maturities	 where	 these	 are	 essential	 for	 an	 understanding	 of	 the	 timing	 of	 cash	 flows	 the	 group	 has	 taken	 advantage	 of	 the	
transitional	 provisions	 in	 the	 amendments	 and	 has	 not	 provided	 comparative	 information	 in	 respect	 of	 the	 new	 requirements
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	 22	 to	 26	 the	 financial	 position	 of	 the	 group	 its	 cash	 flows	 and	 liquidity	 position	 are	
described	 in	 the	 financial	 review	 on	 pages	 16	 and	 17	 in	 addition	 note	 29	 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	 revolving	 revolving	 credit	 and	 overdraft	 facilities	
together	 with	 asset	 finance	 facilities	 see	 notes	 20–21	 the	 majority	 of	 these	 bank	 facilities	 remain	 available	 to	 the	 group	 until	 2012	
in	 addition	 following	 the	 disposal	 of	 the	 fixed	 odds	 betting	 terminal	 fobt	 assets	 the	 group	 held	 cash	 at	 bank	 totalling	 £42m	 at	
30	 april	 2010
the	 asset	 finance	 facilities	 are	 available	 to	 partfinance	 the	 purchase	 of	 machines	 and	 the	 group	 had	 utilised	 £59m	 at	 30	 april	 2010	
new	 asset	 funding	 sources	 have	 been	 confirmed	 and	 added	 to	 the	 group	 facility	 since	 the	 year	 end	 in	 addition	 the	 group	 has	a	
£6m	 revolving	 bank	 credit	 facility	 of	 which	 £599m	 was	 utilised	 at	 30	 april	 2010	 since	 that	 date	 £22m	 has	 been	 paid	 down	 using	
part	 of	 the	 proceeds	 of	 the	 fobt	 assets	 and	 the	 £23m	 undrawn	 facilities	 remain	 available	 for	 use	 for	a	 period	 in	 excess	 of	 one	 year	
from	 the	 date	 of	 approval	 of	 these	 financial	 statements
the	 directors	 have	 prepared	 trading	 and	 cash	 flow	 forecasts	 for	a	 period	 in	 excess	 of	 one	 year	 from	 the	 date	 of	 approval	 of	 these	
financial	 statements	 the	 forecasts	 make	 assumptions	 in	 respect	 of	 future	 trading	 conditions	 and	 in	 particular	 the	 directors’	
estimates	 of	 growth	 in	 the	 number	 of	 machines	 placed	 these	 forecasts	 have	 been	 sensitised	 to	 take	 into	 account	 current	 trading	
levels	 and	 known	 future	 machine	 number	 growth	 taking	 into	 account	a	 number	 of	 reasonably	 forseeable	 sensitivies	 the	 forecast	
show	 that	 the	 group	 will	 continue	 to	 meet	 its	 banking	 covenants	 and	 operate	 within	 currently	 available	 funding	 facilities	 for	a	 period	
in	 excess	 of	 one	 year	 from	 the	 date	 of	 approval	 of	 these	 financial	 statements
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	 the	 going	 concern	 basis	 in	
preparing	 the	 group	 financial	 statements
measurement	 convention
the	 financial	 statements	 are	 prepared	 on	 the	 historical	 cost	 basis	 except	 that	 derivative	 financial	 instruments	 are	 stated	 at	
their	 fair	 value 34	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
1	 accounting	 policies	 continued
basis	 of	 consolidation
reverse	 acquisition	 accounting
the	 financial	 statements	 of	 the	 group	 for	 the	 year	 ended	 30	 april	 2010	 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	 as	a	 consequence	 of	
applying	 reverse	 acquisition	 accounting	 the	 comparative	 results	 of	 the	 group	 at	 30	 april	 2009	 comprise	 the	 results	 of	 orb	 holdings	
limited	 for	 the	 year	 ended	 30	 april	 2009	 plus	 those	 of	 gamingking	 plc	 from	 29	 september	 2008
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’s	 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	 financial	 liabilities	 and	 cash	 and	 cash	 equivalents
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
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	 financial	 liabilities	 categorised	 as	 at	 fair	 value	 through	 profit	 or	 loss	 are	 recorded	 initially	
at	 fair	 value	 net	 of	 direct	 issue	 costs
financial	 liabilities	 categorised	 as	 at	 fair	 value	 through	 profit	 or	 loss	 are	 remeasured	 at	 each	 reporting	 date	 at	 fair	 value	 with	
changes	 in	 fair	 value	 being	 recognised	 in	 the	 statement	 of	 comprehensive	 income	 all	 other	 financial	 liabilities	 are	 recorded	 at	
amortised	 cost	 using	 the	 effective	 interest	 method	 with	 interestrelated	 charges	 recognised	 as	 an	 expense	 in	 finance	 costs	 in	 the	
statement	 of	 comprehensive	 income	 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 		 sceptre	 leisure	 plc	 35
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
1	 accounting	 policies	 continued
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	 statement	 of	 comprehensive	 income	 on	a	 straightline	 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	 310	 years
•	 plant	 and	 machinery	 2–10	 years
•	 fixtures	 fittings	 and	 equipment	 35	 years
•	 motor	 vehicles	 34	 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	 the	 cost	
of	 the	 acquisition	 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	 in	 respect	 of	 equity	 accounted	 investees	 the	 carrying	 amount	 of	 goodwill	 is	 included	 in	 the	
carrying	 amount	 of	 the	 investment	 in	 the	 investee
negative	 goodwill	 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
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	 the	 overall	 value	 of	 customer	 contracts	 and	 relationships	 acquired	
created	a	 negative	 goodwill	 amount	 of	 £225000	 which	 was	 recognised	 immediately	 as	 profit	 in	 accordance	 with	 the	 group’s	
accounting	 policies	 the	 acquisition	 of	 australian	8	 ball	 company	 is	 disclosed	 in	 note	 15	 to	 the	 financial	 statements 36	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
1	 accounting	 policies	 continued
intangible	 assets	 and	 goodwill	 continued
brands
the	 value	 of	 brands	 acquired	 in	 relation	 to	 the	 acquisition	 of	 gamingking	 plc	 have	 been	 calculated	 as	a	 net	 present	 value	 on	a	
relief	 from	 royalty	 basis	 these	 brands	 were	 tested	 for	 impairment	 at	 30	 april	 2010	 and	 an	 impairment	 loss	 of	 £227 000	 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	 straightline	 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	 25	 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	 slow	 moving	 inventory	 where	 it	 is	 deemed	 that	 the	 costs	 incurred	 may	 not	
be	 recoverable
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	a	 financial	 asset	 is	 considered	 to	 be	 impaired	 if	 objective	 evidence	 indicates	 that	 one	 or	 more	 events	 have	 had	
a	 negative	 effect	 on	 the	 estimated	 future	 cash	 flows	 of	 that	 asset	 if	 any	 such	 indication	 exists	 the	 asset’s	 recoverable	 amount	
is	 estimated
for	 goodwill	 an	 impairment	 loss	 is	 recognised	 whenever	 the	 carrying	 amount	 of	 an	 asset	 or	 its	 cashgenerating	 unit	 exceeds	 its	
recoverable	 amount	 impairment	 losses	 are	 recognised	 in	 the	 statement	 of	 comprehensive	 income
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
goodwill	 is	 tested	 annually	 for	 impairment
calculation	 of	 recoverable	 amount
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
the	 recoverable	 amount	 of	 other	 assets	 is	 the	 greater	 of	 their	 fair	 values	 less	 costs	 to	 sell	 and	 value	 in	 use	 in	 assessing	 value	 in	
use	 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 		 sceptre	 leisure	 plc	37
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
1	 accounting	 policies	 continued
impairment	 of	 goodwill	 other	 intangibles	 and	 property	 plant	 and	 equipment	 continued
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
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	 adjusted	 to	 reflect	 the	 actual	 number	 of	 share	 options	 that	 vest	 except	
where	 forfeiture	 is	 due	 only	 to	 share	 prices	 not	 achieving	 the	 threshold	 for	 vesting
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
sale	 of	 lottery	 indoor	 gaming	 and	 leisure	 products
revenue	 from	 the	 sale	 of	 goods	 is	 recognised	 at	 the	 point	 of	 delivery	 to	 the	 customer	 and	 when	 customer	 obligations	 have	 been	
fulfilled
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  38	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
1	 accounting	 policies	 continued
expenses
operating	 lease	 payments
payments	 made	 under	 operating	 leases	 are	 recognised	 in	 the	 statement	 of	 comprehensive	 income	 on	a	 straightline	 basis	 over	 the	
term	 of	 the	 lease	 lease	 incentives	 received	 are	 recognised	 in	 the	 statement	 of	 comprehensive	 income	 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	 during	 the	 year	 the	 group	 revised	 its	 method	 of	 allocating	 interest	 over	 the	 life	 of	 the	 lease	 term	 in	 order	 to	
give	a	 better	 approximation	 of	a	 constant	 periodic	 rate	 of	 interest	 on	 the	 remaining	 balance	 of	 the	 liability	 in	 accordance	 with	 ias	 17	
leases	 the	 impact	 on	 the	 financial	 statements	 for	 both	 current	 and	 prior	 periods	 is	 set	 out	 in	 note	 5
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	 the	 notes	
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
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 		 sceptre	 leisure	 plc	 39
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
1	 accounting	 policies	 continued
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
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	 will		
be	 applied	 prospectively	 the	 new	 standard	 introduces	 changes	 to	 the	 accounting	 requirements	 for	 business	 combinations		
but	 still	 requires	 use	 of	 the	 purchase	 method	 and	 will	 have	a	 significant	 effect	 on	 business	 combinations	 occurring	 in	 future		
reporting	 periods
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	 groups	 interest	 in	 subsidiaries	 these	 changes	 will	 be	 applied	 prospectively	 in	 accordance	 with	 the	 transitional	 provisions	 and	 so	
do	 not	 have	 an	 immediate	 effect	 on	 the	 groups	 financial	 statements	
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	 preliminary	 assessments	 indicate	 that	 the	 effect	 on	
the	 groups	 financial	 statements	 will	 not	 be	 significant	
revised	 ias	 24	 related	 party	 transactions	 effective	 from	1	 january	 2011	
the	 revised	 standard	 introduces	 exemptions	 from	 ias	 24s	 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
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
in	 addition	a	 separate	 project	 is	 dealing	 with	 derecognition	
management	 have	 yet	 to	 assess	 the	 impact	 that	 this	 new	 standard	 is	 likely	 to	 have	 on	 the	 financial	 statements	 of	 the	 group	
however 	 they	 do	 not	 expect	 to	 implement	 the	 standard	 until	 all	 chapters	 of	 the	 ias	 39	 replacement	 have	 been	 published	 and	 they	
can	 comprehensively	 assess	 the	 impact	 of	 all	 changes	
the	 group	 has	 not	 yet	 determined	 all	 the	 potential	 effect	 of	 the	 new	 standards	 and	 interpretations	 not	 yet	 effective	 40	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
2	 revenue
revenue
30	 april	 2010
£000
30	 april	 2009	
£000
equipment	 sales 377 307
machine	 rental 38755 36361
sale	 of	 lottery	 indoor	 gaming	 and	 leisure	 products 3676 2537
total	 revenues 42808 39205
3	 segmental	 report
during	 the	 year	 the	 group	 adopted	 ifrs	8	 operating	 segments	 which	 replaces	 ias	 14	 segment	 reporting	 the	 standard	 is	 applied	
restrospectively	 the	 accounting	 policy	 for	 identifying	 segments	 is	 now	 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	 and	 kelly’s	 eye	 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	 have	 been	 consolidated	 due	 to	 materiality	 and	 classified	 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	 apart	 from	 the	 recognition	 of	 the	 prior	 year	 adjustment	 as	 explained	 within	 note	5	 to	 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
segmental	 analysis
machine	
sales
and	 rental
£000
other
£000
central	
corporate
costs
£000
2010
group
£000
machine	
sales
and	 rental
£000
other
£000
central	
corporate
costs
£000
2010
group
£000
external	 revenue 39132 3676 – 42808 36668 2537 – 39205
intersegment	 revenue – – – – – – – –
net	 revenue 39132 3676 – 42808 36668 2537 – 39205
gross	 profit 11060 2250 – 13310 9746 1391 – 11137
operating	 profitloss 5080 978 901 3201 4225 214 522 3489
segment	 assets 38750 4986 124 43860 33075 5258 – 38333
segment	 liabilities 23066 1325 6230 30621 30438 1727 – 32165
other	 segment	 information
capital	 expenditure	 note	 14 11541 848 – 12389 14481 362 – 14843
intangible	 assets	–	 additions	 note	 13 1546 – – 1546 – 2964 – 2964
depreciation	 note	 14 9015 329 – 9344 8829 173 – 9002
amortisation	 note	 13 249 123 – 372 120 86 – 206
interest	 expense	 note	 9 1404 10 – 1414 1661 15 – 1676
impairment	 note	 13 – 227 – 227 – – – –
equitysettled	 share	 options	 note	 25 59 27 45 131 38 20 39 97
finance	 gainloss	 on	 derivative	 financial	
instruments	 note	 23 124 – – 124 421 – – 421
during	 the	 year	 two	 customers	 contributed	 more	 than	 10	 of	 group	 revenues	 both	 within	 the	 ‘machine	 sales	 and	 rental’	 segment	
customer	a	–	 revenue	 £66m	 155	 customer	b	–	 revenue	 £63m	 148 		 sceptre	 leisure	 plc	41
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
4	 exceptional	 items	
30	 april	 2010
£000
30	 april	 2009
£000
restructuring	 and	 redundancy 195 118
provision	 for	 rentals	 and	 business	 rates	 on	 onerous	 leases 452 47
impairment	 of	 intangible	 assets	–	 brands 227 –
recognition	 of	 negative	 goodwill	 on	 acquisition	 of	 australian	8	 ball	 company	 limited 225 –
professional	 and	 financial	 expenses	 relating	 to	 corporate	 restructuring 154 71
exceptional	 items	 costcredit 803 236
5	 prior	 year	 adjustment
during	 the	 year	 the	 group	 revised	 its	 method	 of	 allocating	 interest	 over	 the	 life	 of	 the	 lease	 term	 in	 order	 to	 give	a	 better	
approximation	 of	a	 constant	 periodic	 rate	 of	 interest	 on	 the	 remaining	 balance	 of	 the	 liability	 in	 accordance	 with	 ias	 17	 leases		
the	 effect	 of	 this	 change	 in	 accounting	 policy	 is	 to	 increase	 the	 2009	 finance	 cost	 by	 £190000	 reduce	 profit	 before	 taxation	 for	
2009	 by	 £190000	 increase	 interest	 bearing	 loans	 and	 borrowings	 as	 at	 30	 april	 2009	 by	 £248000	 and	 reduce	 net	 assets	 as	 at		
30	 april	 2009	 by	 £248000	 in	 addition	 an	 adjustment	 of	 £58000	 has	 also	 been	 made	 to	 reduce	 retained	 earnings	 as	 at	1	 may	
2008	 to	 correct	 the	 impact	 on	 earlier	 periods	 the	 prior	 year	 adjustment	 reduces	 previously	 reported	 2009	 eps	 from	 31p	 to	 26p	
and	 diluted	 eps	 from	 30p	 to	 25p
6	 expenses	 and	 auditors’	 remuneration
included	 in	 profitloss	 are	 the	 following
30	 april	 2010
£000
30	 april	 2009
£000
depreciation	 and	 amounts	 written	 off	 property	 plant	 and	 equipment
owned	 assets 6803 6989
leased	 assets 2541 2013
amortisation	 of	 brand	 names	 customer	 contracts	 and	 relationships 268 206
operating	 lease	 charges	 property	 rentals 368 359
operating	 lease	 charges	 other 642 315
foreign	 exchange	 differences 2 –
profitloss	 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 232 154
property	 lease	 charges	 above	 are	 stated	 net	 of	 sublet	 income	 the	 amount	 of	 which	 was	 £9000	 2009	 £9000
auditors’	 remuneration
30	 april	 2010
£000
30	 april	 2009
£000
audit	 services
audit	 of	 these	 financial	 statements 14 32
other	 services
audit	 of	 financial	 statements	 of	 subsidiaries	 pursuant	 to	 legislation 35 40
tax	 services
advisory	 services – 10
compliance	 services – 10
corporate	 finance	 services –
other	 costs – 125
49 217
amounts	 paid	 to	 the	 company’s	 auditors	 and	 their	 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 42	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
7	 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	 2010 30	 april	 2009
administration	 and	 management 112 136
other	 operatives 327 278
439 414
the	 aggregate	 payroll	 costs	 of	 these	 persons	 were	 as	 follows
30	 april	 2010
£000
30	 april	 2009
£000
wages	 and	 salaries 8211 7 267
social	 security	 costs 690 675
share	 option	 cost 131 97
pension	 costs 105 111
9137 8150
key	 management
the	 aggregate	 compensation	 of	 key	 management	 including	 executive	 directors	 is	 shown	 below
30	 april	 2010
£000
30	 april	 2009
£000
salaries	 and	 shortterm	 employee	 benefits 623 624
share	 option	 charge 88 70
pension	 costs 62 56
total	 emoluments 773 750
directors’	 remuneration
30	 april	 2010
£000
30	 april	 2009
£000
emoluments 406 377
share	 option	 charge 59 50
money	 purchase	 pension	 contributions 38 25
sums	 paid	 to	 third	 parties	 for	 directors’	 services 30 47
total	 emoluments 533 499
no	 share	 options	 were	 excercised	 by	 directors	 during	 the	 year
£30000	 2009	 £46681	 was	 paid	 to	 vz	 limited	 in	 respect	 of	 services	 provided	 to	 the	 group	 by	 mr	g	 van	 zwanenberg	 vz	 limited	
is	 controlled	 by	 mr	g	 van	 zwanenberg	a	 director	 of	 sceptre	 leisure	 plc
directors’	 emoluments	 disclosed	 above	 include	 the	 following	 payments
highest	 paid	 director
30	 april	 2010
£000
30	 april	 2009
£000
emoluments 130 106
money	 purchase	 pension	 contributions 18 11
total	 emoluments 148 117
the	 number	 of	 directors	 to	 whom	 retirement	 benefits	 are	 accruing	 under
30	 april	 2010
number
30	 april	 2009
number
money	 purchase	 pension	 schemes 3 3 		 sceptre	 leisure	 plc	 43
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
8	 finance	 income
30	 april	 2010
£000
30	 april	 2009
£000
increase	 in	 fair	 value	 of	 derivative	 financial	 instruments 124 –
9	 finance	 costs
30	 april	 2010
£000
30	 april	 2009
£000
on	 bank	 loans	 loan	 notes	 and	 overdrafts 754 1007
on	 finance	 leases 660 669
decrease	 in	 fair	 value	 of	 derivative	 financial	 instruments – 421
1414 2097
10	 taxation
recognised	 in	 the	 statement	 of	 comprehensive	 income
30	 april	 2010
restated
30	 april	 2009
£000 £000 £000 £000
current	 tax	 expense
current	 year 863 1194
adjustments	 for	 prior	 years 1158 –
current	 tax	 expense 295 1194
deferred	 tax	 expense
origination	 and	 reversal	 of	 temporary	 differences 365 684
adjustments	 in	 respect	 of	 previous	 years 953 88
deferred	 tax	 expense 588 772
total	 tax	 expense 293 422
reconciliation	 of	 effective	 tax	 rate
30	 april	 2010
£000
restated
30	 april	 2009
£000
profit	 before	 tax 1911 1582
profit	 before	 tax	 multiplied	 by	 standard	 rate	 of	 corporation	 tax	 in	 the	 uk	 of	 28	 2009	 28 535 443
effects	 of
expenses	 not	 deductible	 for	 tax	 purposes 61 53
income	 not	 taxable 63 –
adjustments	 in	 respect	 of	 previous	 years 205 71
movement	 in	 unrecognised	 deferred	 tax	 assets 34 –
small	 company	 relief 1 3
total	 tax	 expense 293 422
11	 dividends
the	 directors	 do	 not	 recommend	 the	 payment	 of	a	 dividend	 in	 respect	 of	 the	 current	 year	 during	 the	 year	 the	 group	 paid	 £100000	
in	 relation	 to	a	 2008	 dividend	 declared	 but	 not	 paid	 by	 orb	 holdings	 limited	 prior	 to	 the	 reverse	 acquisition	 in	 september	 2008 44	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
12	 earnings	 per	 ordinary	 share
the	 calculations	 of	 earnings	 per	 share	 are	 based	 on	 the	 following	 profits	 and	 number	 of	 shares
basic
30	 april	 2010
£000
diluted
30	 april	 2010
£000
restated
basic
30	 april	 2009
£000
restated
diluted
30	 april	 2009	
£000
profit	 for	 the	 financial	 year 1587 1587 937 937
additional	 disclosures
exceptional	 administrative	 expenses 803 803 236 236
taxation	 effect	 of	 exceptional	 administrative	 expenses 225 225 66 66
profit	 for	 the	 financial	 year	 before	 exceptional	 expenses 2165 2165 1107 1107
30	 april	 2010	
number	 of	
shares
30	 april	 2009	
number	 of	
shares
weighted	 average	 number	 of	 shares
for	 basic	 earnings	 per	 share 52426333 36354494
share	 options 3617 694 1793980
for	 diluted	 earnings	 per	 share 56044027 3814847 4
the	 group’s	 earnings	 per	 share	 are	 as	 follows
30	 april	 2010
pence
restated
30	 april	 2009
pence
–	 basic 30 26
–	 diluted 28 25
–	 basic	 before	 exceptional	 expenses 41 30
–	 diluted	 before	 exceptional	 expenses 39 29
as	 stated	 in	 note	 1	 the	 directors	 have	 adopted	 reverse	 acquisition	 accounting	 under	 ifrs	3	 for	 the	 period	 ended	 30	 april	 2009	
to	 enable	a	 meaningful	 comparison	 and	 in	 accordance	 with	 ifrs	 3	 the	 weighted	 average	 number	 of	 shares	 for	 the	 periods	 has	
been	 calculated	 as	 follows
for	 the	 year	 ended	 30	 april	 2009	 the	 weighted	 average	 number	 of	 shares	 has	 been	 based	 on	 the	 32945762	 shares	 issued	
on	 29	 september	 2008	 as	 part	 of	 the	 acquisition	 of	 orb	 holdings	 limited	 by	 gamingking	 plc	 for	 the	 period	1	 may	 2008	
to	 28	 september	 2009	 the	 5813958	 shares	 attributable	 to	 gamingking	 plc	 have	 been	 included	 for	 the	 period	 beginning	
29	 september	 2009	 in	 order	 to	 calculate	a	 weighted	 average	 number	 of	 shares	 in	 issue	 for	 the	 year	 for	 the	 group
the	 total	 number	 of	 shares	 in	 issue	 at	 30	 april	 2010	 was	 55545542 		 sceptre	 leisure	 plc	 45
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
13	 intangible	 assets
goodwill
£000
customer	
contracts	 and	
relationships
£000
brand
names
£000
total
£000
cost
balance	 at	1	 may	 2008 61 2165 – 2226
acquisitions	 through	 business	 combinations – 2464 500 2964
balance	 at	 30	 april	 2009 61 4629 500 5190
balance	 at	1	 may	 2009 61 4629 500 5190
acquisitions	 through	 business	 combinations	 note	 15 – 1546 – 1546
disposals – 228 – 228
balance	 at	 30	 april	 2010 61 5947 500 6508
amortisation	 and	 impairment
balance	 at	1	 may	 2008 – 60 – 60
charged	 in	 the	 year – 192 14 206
balance	 at	 30	 april	 2009 – 252 14 266
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
net	 book	 value
at	 29	 april	 2008 61 2105 – 2166
at	 30	 april	 2009 61 4377 486 4924
at	 30	 april	 2010 61 5380 234 5675
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	 value	 in	 use	 determined	 from	 estimated	 discounted	 future	 net	 cash	 flows	 goodwill	 is	 written	 down	 to	 the	 value	 in	 use	
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	 value	 in	 use	 calculation	 goodwill	 is	 allocated	 to	 the	 machine	 sales	 and	 rental	 cashgenerating	 unit
the	 key	 assumptions	 for	 the	 value	 in	 use	 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	 2009	 1	 was	 used	 in	 the	 calculation	 over	 the	 fiveyear	 period	a	 pretax	
discount	 rate	 of	 875	 2009	 11	 was	 used	 in	 the	 value	 in	 use	 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	 value	 in	 use	 basis	 and	 an	 impairment	 charge	
of	 £227 000	 was	 recognised	 in	 the	 statement	 of	 comprehensive	 income	 within	 exceptional	 administrative	 expenses	 amortisation	 of	
intangible	 assets	 is	 included	 within	 normal	 adminitrative	 expenses	 in	 the	 statement	 of	 comprehensive	 income 46	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
14	 property	 plant	 and	 equipment
short	 leasehold	
property
£000
plant	 and	
machinery
£000
fixtures	 fittings	
and	 equipment
£000
motor	 vehicles
£000
total
£000
cost
balance	 at	1	 may	 2008 185 24382 957 1693 27 217
acquisitions – 967 54 13 1034
additions 68 13886 208 681 14843
disposals – 3313 – 1305 4618
balance	 at	 30	 april	 2009 253 35922 1219 1082 38476
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
depreciation
balance	 at	1	 may	 2008 30 4933 234 288 5485
charged	 in	 the	 year 42 8351 296 313 9002
disposals – 2532 – 333 2865
balance	 at	 30	 april	 2009 72 10752 530 268 11622
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
net	 book	 value
at	1	 may	 2008 155 19449 723 1405 21732
at	 30	 april	 2009 181 25170 689 814 26854
at	 30	 april	 2010 335 25253 484 903 26975
the	 net	 book	 value	 of	 plant	 and	 machinery	 includes	 £8511000	 2009	 £8537 000	 in	 respect	 of	 assets	 held	 under	 finance	 leases	
depreciation	 for	 the	 year	 on	 these	 assets	 was	 £2258000	 2009	 £755000
the	 net	 book	 value	 of	 fixtures	 fittings	 and	 equipment	 includes	 £63000	 2009	 £118000	 in	 respect	 of	 assets	 held	 under	 finance	
leases	 depreciation	 for	 the	 year	 on	 these	 assets	 was	 £62000	 2009	 £79000
the	 net	 book	 value	 of	 motor	 vehicles	 includes	 £885000	 2009	 £801000	 in	 respect	 of	 assets	 held	 under	 finance	 leases	
depreciation	 for	 the	 year	 on	 these	 assets	 was	 £221000	 2009	 £79000 		 sceptre	 leisure	 plc	 47
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
15	 acquisitions
acquisition	 of	 australian	8	 ball	 company	 limited
on	 15	 december	 2009	 the	 group	 acquired	 the	 entire	 share	 capital	 of	 australian	8	 ball	 company	 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 990
shares	 in	 sceptre	 leisure	 plc	 182422	 ordinary	 shares	 of	 5p	 each	 issued	 at	 603p	 being	 market	 price 110
consideration
1100
acquisition	 expenses 26
total	 consideration 1126
initial	 book	
value	 at	 date	
of	 acquisition	
£000
fair	 value	
adjustment	
£000
fair	 value	
at	 date	 of	
acquisition	
£000
intangible	 assets	 note	 13 – 1546 1546
property	 plant	 and	 equipment 900 – 900
deferred	 taxation 23 – 23
inventories 4 – 4
trade	 and	 other	 receivables 83 – 83
cash	 and	 cash	 equivalents 27 – 27
total	 assets 1037 1546 2583
cash	 and	 cash	 equivalents 33 – 33
interest	 bearing	 loans	 and	 borrowings 316 – 316
corporation	 tax 63 – 63
trade	 and	 other	 payables 387 – 387
deferred	 taxation – 433 433
total	 liabilities 799 433 1232
net	 assets 238 1113 1351
fair	 value	 of	 consideration	 paid	 including	 transaction	 and	 adviser	 costs	 of	 £26000 1126
negative	 goodwill	 on	 acquisition	–	 recognised	 in	 exceptional	 items	 within	 profit	 or	 loss 225
owing	 to	 the	 immediate	 and	 successful	 integration	 of	 the	 australian	8	 ball	 company	 limited	 into	 sceptre	 leisure	 solutions	 it	 is	 not	
possible	 to	 determine	 the	 profit	 attributable	 to	 the	 acquistion	 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	 2009
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	 consider	 that	 the	 customer	 contracts	 and	 relationships	
acquired	 in	 the	 australian	8	 ball	 company	 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	 australian	8	 ball	 company	
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	 negative	 goodwill	 amount	 of	 £225000	 which	 was	
recognised	 immediately	 as	 profit	 in	 accordance	 with	 the	 group’s	 accounting	 policies	 negative	 goodwill	 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 48	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
16	 inventories
30	 april	 2010		
£000
30	 april	 2009		
£000
consumables 1020 857
goods	 for	 resale 256 235
1276 1092
in	 2010	 inventories	 recognised	 as	 cost	 of	 sales	 amounted	 to	 £09m	 2009	 £14m	 during	 the	 year	 an	 inventory	 impairment	 provision	
totalling	 £nil	 was	 reversed	 2009	 £9000	 and	 included	 in	 cost	 of	 sales	 inventories	 are	 valued	 on	a	 first	 in	 first	 out	 fifo	 basis
17	 trade	 and	 other	 receivables
30	 april	 2010		
£000
30	 april	 2009		
£000
current	 assets
trade	 receivables 1934 2129
other	 receivables 274 244
prepayments	 and	 accrued	 income 3563 2371
5771 4744
18	 cash	 and	 cash	 equivalents
30	 april	 2010	
£000
30	 april	 2009	
£000
current	 assets
cash	 at	 bank 4163 719
current	 liabilities
bank	 overdraft 470 2356
3693 1637
19	 trade	 and	 other	 payables
30	 april	 2010	
£000
restated		
30	 april	 2009	
£000
current	 liabilities
trade	 payables 4540 5501
other	 taxation	 and	 social	 security	 costs 1420 1473
other	 payables 622 1382
accruals	 and	 deferred	 income 951 923
7533 9279
noncurrent	 liabilities
other	 payables 130 468 		 sceptre	 leisure	 plc	 49
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
20	 current	 financial	 liabilities
30	 april	 2010	
£000
30	 april	 2009	
£000
restated		
29	 april	 2008	
£000
bank	 overdraft 470 2356 1117
bank	 loans 2450 2100 1800
unsecured	 loan	 notes 750 675 –
finance	 leases 4217 5099 3157
7 887 10230 6074
21	 noncurrent	 financial	 liabilities
30	 april	 2010	
£000
30	 april	 2009	
£000
restated		
29	 april	 2008	
£000
bank	 loans 3750 6200 8300
revolving	 credit	 facility 5999 – –
unsecured	 loan	 notes 750 1500 2175
finance	 leases 1694 2320 1994
12193 10020 12469
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	 £7 938000	 2009	 £10324000
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	 £5423000	 2009	 £6765000
finance	 lease	 liabilities
finance	 lease	 liabilities	 are	 payable	 as	 follows
minimum	 lease	
payments		
30	 april	 2010	
£000
interest		
30	 april	 2010	
£000
principal		
30	 april	 2010	
£000
minimum	 lease	
payments		
30	 april	 2009	
£000
interest		
30	 april	 2009	
£000
principal		
30	 april	 2009	
£000
less	 than	 one	 year 4573 356 4217 5592 493 5099
between	 one	 and	 five	 years 1777 83 1694 2351 279 2320
6350 439 5911 7943 772 7419
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 50	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
22	 deferred	 tax	 liability
30	 april	 2010	
£000
restated		
30	 april	 2009	
£000
at	 beginning	 of	 year 916 959
chargecredit	 for	 the	 year	 recognised	 in	 statement	 of	 comprehensive	 income 735 625
acquisitions 409 609
on	 items	 taken	 to	 equity 85 27
at	 end	 of	 year 1976 916
the	 elements	 of	 the	 deferred	 tax	 liability	 are	 as	 follows
assets liabilities net
30	 april	 2010	
£000
restated
30	 april	 2009	
£000
30	 april	 2010	
£000
restated
30	 april	 2009	
£000
30	 april	 2010	
£000
restated
30	 april	 2009	
£000
intangible	 assets – – 1530 1290 1530 1290
property	 plant	 and	 equipment – 65 945 – 945 65
other	 shortterm	 temporary	 differences 323 255 – – 323 255
employee	 sharebased	 payments 176 54 – – 176 54
net	 tax	 assetsliabilities 499 374 2475 1290 1976 916
the	 group	 has	 no	 unprovided	 deferred	 tax	 balances
a	 deferred	 tax	 asset	 has	 not	 been	 recognised	 in	 respect	 of	 losses	 amounting	 to	 £332000	 2009	 £277 000
the	 emergency	 budget	 on	 22	 june	 2010	 announced	 that	 the	 uk	 corporation	 tax	 rate	 will	 reduce	 from	 28	 to	 24	 over	a	 period	
of	 four	 years	 from	 2011	 the	 first	 reduction	 in	 the	 uk	 corporation	 tax	 rate	 from	 28	 to	 27	 was	 substantively	 enacted	 on	 20	 july	
2010	 and	 will	 be	 effective	 from	1	 april	 2011	 this	 will	 reduce	 the	 group’s	 future	 current	 tax	 charge	 accordingly	 if	 the	 rate	 change	
from	 28	 to	 27	 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	 £70000	 and	 would	 have	 reduced	 the	 amount	 of	 the	 total	 unrecognised	 deferred	 tax	
assets	 at	 that	 date	 by	 £3000	 it	 has	 not	 yet	 been	 possible	 to	 quantify	 the	 full	 anticipated	 effect	 of	 the	 announced	 further	 3	 rate	
reduction	 although	 this	 will	 further	 reduce	 the	 groups	 future	 current	 tax	 charge	 and	 reduce	 the	 group’s	 deferred	 tax	 liabilities
assets	 accordingly
23	 derivative	 financial	 instrument
30	 april	 2010	
£000
30	 april	 2009	
£000
assets
interest	 rate	 collars – –
liabilities
interest	 rate	 collars 290 414
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	 £62m	 2009	 £83m	 restrict	 interest	 payments	 at	 rates	 between	 470	 and	 575	 for	 periods	
up	 to	 28	 september	 2012
the	 fair	 value	 of	 collars	 is	 estimated	 at	 £2000	 2009	 £10000	 for	 the	 cap	 and	a	 liability	 of	 £292000	 2009	 £424000	 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 		 sceptre	 leisure	 plc	51
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
24	 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	 £105000	 2009	
£111000	 contributions	 totalling	 £16000	 2009	 £6000	 were	 payable	 to	 the	 funds	 at	 the	 year	 end	 and	 are	 included	 in	 accruals	
within	 trade	 and	 other	 payables
25	 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
the	 details	 of	 the	 grants	 are	 as	 follows
directorsemployees	 entitled
method	 of	
settlement	
accounting
number	 of	
instruments exercise	 period
kenneth	 turner equity 533333 31102010	–	 31102018
lesley	 humphrys equity 400000 31102010	–	 31102018
brian	 nichols equity 400000 31102010	–	 31102018
douglas	 yates equity 111111 31102010	–	 31102018
victor	 wardman equity 66667 31102010	–	 31102018
guy	 van	 zwanenberg equity 111111 31102010	–	 31102018
antony	 yates equity 244444 31102010	–	 31102018
michelle	 yates equity 200000 31102010	–	 31102018
mark	 white equity 311111 31102010	–	 31102018
others equity 1323881 31102010	–	 31102018
total 3701658
the	 number	 and	 weighted	 average	 exercise	 prices	 of	 share	 options	 are	 as	 follows
weighted	
average	
exercise	 price	
30	 april	 2010
number	 of	
options		
30	 april	 2010
weighted	
average		
exercise	 price		
30	 april	 2009
number	 of	
options		
30	 april	 2009
outstanding	 at	 the	 beginning	 of	 the	 year 214p 3617 964 – –
forfeited	 during	 the	 year – – 195p 83964
exercised	 during	 the	 year – – – –
granted	 during	 the	 year – – 214p 3701658
lapsed	 during	 the	 year – – – –
outstanding	 at	 the	 end	 of	 the	 year 214p 3617 964 214p 3617 964
exercisable	 at	 the	 end	 of	 the	 year 225p 1808716 – –
there	 were	 no	 share	 options	 exercised	 during	 the	 year	 2009	 nil
the	 options	 outstanding	 at	 the	 year	 end	 have	 an	 exercise	 price	 in	 the	 range	 of	 195p	 to	 234p	 and	a	 weighted	 average	 contractual	
life	 of	 85	 years 52	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
25	 sharebased	 payments	 continued
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	 2010 30	 april	 2009 30	 april	 2010 30	 april	 2009
fair	 value	 at	 measurement	 date 1071p 1071p 7 26p 7 26p
weighted	 average	 exercise	 price 2023p 2023p 2252p 2252p
expected	 volatility	 expressed	 as		 used	 in	 the	 modelling	 under
blackscholes	 model 8560 8560 7560 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 115 115 115 115
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	 2010	
£000
30	 april	 2009	
£000
equitysettled	 sharebased	 payment	 expense 131 97
26	 share	 capital
30	 april	 2010	
£000
30	 april	 2009	
£000
authorised
90000000	 2009	 47 67 4384	 ordinary	 shares	 of	 5p	 each 4500 2384
290697 869	 2009	 290697 869	 deferred	 shares	 of	 09p	 each 2616 2616
7 116 5000
allotted	 called	 up	 and	 fully	 paid
55545542	 2009	 38759720	 ordinary	 shares	 of	 5p	 each 2778 1938
290697 869	 2009	 290697 869	 deferred	 shares	 of	 09p	 each 2616 2616
5394 4554
during	 the	 year	 the	 group	 issued	 16603400	 shares	 to	 hillroad	 investments	 limited	 during	a	 placing	 completed	 on	5	 july	 2009		
in	 addition	 182422	 shares	 were	 issued	 as	 part	 of	 the	 consideration	 for	 the	 acquisition	 of	 the	 australian	8	 ball	 company	 limited		
on	 15	 december	 2009 		 sceptre	 leisure	 plc	 53
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
26	 share	 capital	 continued
the	 companys	 articles	 of	 association	 set	 out	 the	 rights	 attaching	 to	 each	 class	 of	 share	 in	 issue	 and	 are	 available	 to	 download	 at	
the	 companys	 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	 aggregate	 dividends	 of	 not	 less	 than	 £10	 per	
new	 ordinary	 share	a	 fixed	 noncumulative	 dividend	 at	 the	 rate	 of	 001	 per	 cent	 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	
27	 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
28	 capital	 commitments
there	 were	 no	 capital	 commitments	 at	 the	 end	 of	 the	 2010	 financial	 year	 2009	 £nil
29	 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 54	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
29	 financial	 risk	 management	 continued
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
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
2010		
£000
2009		
£000
undrawn	 borrowing	 facilities
	 uncommitted 1310 1193
	 committed – 1944
1310 3137
maturity	 analysis
the	 following	 are	 the	 contractual	 maturities	 of	 financial	 liabilities	 including	 estimated	 interest	 payments	 and	 excluding	 the	 impact	
of	 netting	 agreements
30	 april	 2010
carrying		
amount		
£000
contractual		
cash	 flows		
£000
6	 months		
or	 less		
£000
6–12	 months	
£000
1–2	 years		
£000
2–5	 years		
£000
more	 than		
5	 years		
£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 –
30	 april	 2009	 restated
carrying		
amount		
£000
contractual		
cash	 flows		
£000
6	 months		
or	 less		
£000
6–12	 months	
£000
1–2	 years		
£000
2–5	 years		
£000
more	 than		
5	 years		
£000
nonderivative	 financial	
liabilities
bank	 loans	 and	 loan	 notes 10475 11528 1070 1929 3577 4952 –
finance	 lease	 liabilities 7 171 7942 3077 2580 1984 301 –
trade	 and	 other	 payables 10833 10833 10365 – – 468 –
bank	 overdrafts 2356 2356 2356 – – – –
derivative	 financial	
liabilities
interest	 rate	 swaps 414 565 148 120 208 89 –
total 31249 33224 17 016 4629 5769 5810 –
included	 in	 bank	 loans	 and	 loan	 notes	 in	 2010	 are	 £1500000	 2009	 £2175000	 variable	 rate	 secured	 loan	 notes	 2012 		 sceptre	 leisure	 plc	 55
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
29	 financial	 risk	 management	 continued
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	 2010	 the	 group	 held	 contracts	 covering	 £62m	 2009	 £83m	
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
30	 april	 2010
fixed	 rate	
£000
floating	 rate	
£000
noninterest	
bearing		
£000
total		
£000
cash	 and	 cash	 equivalents – 4674 – 4674
trade	 and	 other	 receivables – – 5771 5771
trade	 and	 other	 payables – – 8275 8275
bank	 overdrafts – 470 – 470
bank	 loans	 and	 loan	 notes – 7 700 – 7 700
revolving	 credit	 facility – 5999 – 5999
finance	 leases 5911 – – 5911
5911 9495 2504 17 910
30	 april	 2009	 restated
fixed	 rate		
£000
floating	 rate	
£000
noninterest	
bearing		
£000
total		
£000
cash	 and	 cash	 equivalents – 719 – 719
trade	 and	 other	 receivables – – 4744 4744
trade	 and	 other	 payables – – 10833 10833
bank	 overdrafts – 2356 – 2356
bank	 loans	 and	 loan	 notes – 10475 – 10475
finance	 leases 7 419 – – 7 419
7 419 12112 6089 25620
interest	 is	 payable	 on	 the	 bank	 loans	 at	 libor		 3	 2009	 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	 believe	 that	 these	 reflect	 the	 most	 probable	
rate	 movements	 the	 analysis	 is	 performed	 on	 the	 same	 basis	 for	 the	 comparative	 period
30	 april	 2010	
£000
30	 april	 2009	
£000
impact	 on	 equity
1	 increase	 in	 base	 rate	 of	 interest 158 202
impact	 on	 profit	 or	 loss
1	 increase	 in	 base	 rate	 of	 interest 158 202 56	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
29	 financial	 risk	 management	 continued
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	 believe	 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
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	 £6097 000	 2009	 £2848000	 being	 the	 total	 of	 the	 carrying	 amount	 of	 financial	 assets	 excluding	
equity	 investments	 shown	 in	 the	 table	 below
30	 april	 2010	
£000
30	 april	 2009	
£000
trade	 receivables 1934 2129
cash	 and	 cash	 equivalents 4163 719
interest	 rate	 swaps	 used	 for	 hedging	–	 assets – –
6097 2848
the	 maximum	 exposure	 to	 credit	 risk	 for	 trade	 receivables	 at	 the	 balance	 sheet	 date	 by	 geographic	 region	 was
30	 april	 2010		
£000
30	 april	 2009	
£000
united	 kingdom 1934 2129
other – –
1934 2129
credit	 quality	 of	 financial	 assets	 and	 impairment	 losses
the	 ageing	 of	 trade	 receivables	 at	 the	 balance	 sheet	 date	 was
gross		
30	 april	 2010	
£000
impairment		
30	 april	 2010	
£000
gross		
30	 april	 2009	
£000
impairment	
30	 april	 2009	
£000
not	 past	 due 1397 – 1668 –
past	 due	 0–30	 days 336 – 343 –
past	 due	 31–120	 days 117 – 76 –
more	 than	 120	 days 113 29 51 9
1963 29 2138 9 		 sceptre	 leisure	 plc	57
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
29	 financial	 risk	 management	 continued
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
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
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	 2010		

30	 april	 2009	
	
derivatives 055 055
loans	 and	 borrowings 455 455
leases 1300 1300 58	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
29	 financial	 risk	 management	 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	
amount		
30	 april	 2010	
£000
fair	 value		
30	 april	 2010	
£000
carrying	 amount	
30	 april	 2009	
£000
fair	 value		
30	 april	 2009	
£000
loans	 and	 receivables
	 trade	 and	 other	 receivables 5711 5711 4752 4752
cash	 and	 cash	 equivalents 4674 4674 719 719
financial	 liabilities	 derivatives	 at	 fair	 value	 through	 profit	 and	 loss
	 liabilities	–	 interest	 rate	 swaps	 used	 for	 hedging 290 290 414 414
financial	 liabilities	 measured	 at	 amortised	 cost
	 bank	 loans	 and	 loan	 notes 7 700 7 937 10475 10324
	 revolving	 credit	 facility 5999 5631 – –
	 finance	 lease	 liabilities 5911 5423 7 419 6765
	 trade	 and	 other	 payables 8275 8275 10833 10833
	 bank	 overdrafts 470 470 2356 2356
18260 17 641 25709 25397
unrecognised	 gains 619 309
financial	 instruments	 measured	 at	 fair	 value
the	 group	 has	 adopted	 the	 amendments	 to	 ifrs	7	 improving	 disclosures	 about	 financial	 instruments	 effective	 from	1	 april	 2009	
these	 amendments	 require	 the	 group	 to	 present	 certain	 information	 about	 financial	 instruments	 measured	 at	 fair	 value	 in	 the	
balance	 sheet	 in	 the	 first	 year	 of	 application	 comparative	 information	 need	 not	 be	 presented	 for	 the	 disclosures	 required	 by	 the	
amendment	 accordingly	 the	 disclosure	 for	 the	 fair	 value	 hierarchy	 is	 only	 presented	 for	 the	 30	 april	 2010	 year	 end	
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
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	
30	 april	 2010
level	1	
	 £000
level	2	
	 £000
level	3	
	 £000
total	
	 £000
liabilities
interest	 rate	 collar – 290 – 290
net	 fair	 value – 290 – 290 		 sceptre	 leisure	 plc	 59
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
30	 operating	 leases	 payable
at	 the	 balance	 sheet	 date	 the	 group	 has	 outstanding	 commitments	 under	 operating	 leases	 which	 fall	 due	 as	 follows
30	 april	 2010	
£000		
property
30	 april	 2010	
£000		
other
30	 april	 2010	
£000		
total
30	 april	 2009	
£000		
property
30	 april	 2009	
£000		
other
30	 april	 2009	
£000		
total
within	 one	 year 453 477 930 440 477 917
in	 the	 second	 to	 fifth	 year	 inclusive 1361 229 1590 1291 290 1581
after	 five	 years 661 – 661 715 – 715
2475 706 3181 2446 767 3213
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
31	 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	 have	 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	 and	 this	 amount	 was	
tested	 for	 impairment	 at	 the	 balance	 sheet	 date	 using	a	 discount	 rate	 of	 875	 as	 set	 out	 in	 note	 13	 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	 are	 detailed	 in	 the	 impairment	 test	 accounting	 policies
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	 £54m	 2009	 £44m	 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
inventory	 impairment	 provisions
the	 group	 makes	 provision	 for	 inventories	 deemed	 to	 be	 obsolete	 this	 provision	 is	 established	 on	a	 specific	 item	 by	 item	 basis	
based	 on	 management’s	 prior	 experience	 and	 their	 assessment	 of	 the	 present	 value	 of	 estimated	 future	 cash	 flows	 at	 the	 balance	
sheet	 date	a	 provision	 of	 £nil	 2009	 £5000	 has	 been	 made	 during	 the	 course	 of	 the	 year	 provisions	 totalling	 £5000	 2009	
£9000	 were	 reversed	 and	a	 corresponding	 credit	 to	 cost	 of	 sales	 was	 recognised	 any	 future	 increase	 to	 the	 provision	 would	 lead	
to	a	 corresponding	 reduction	 in	 reported	 profits	 and	 total	 assets
receivables	 impairment	 provisions
the	 amounts	 presented	 in	 the	 balance	 sheet	 are	 net	 of	 allowances	 for	 doubtful	 receivables	 estimated	 by	 the	 group’s	 management	
based	 on	 prior	 experience	 and	 their	 assessment	 of	 the	 present	 value	 of	 estimated	 future	 cash	 flows	 at	 the	 balance	 sheet	 date	a	
provision	 of	 £29000	 2009	 £9000	 has	 been	 made	 this	 amount	 is	 based	 on	 specific	 over	 due	 account	 criteria	 and	 management’s	
judgement	 as	 to	 future	 recoverability	 any	 future	 increase	 to	 the	 provision	 would	 lead	 to	a	 corresponding	 reduction	 in	 reported	
profits	 and	 total	 assets 60	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 financial	 statements	 continued
32	 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	 2010 30	 april	 2009
related	 party relationship
nature	 of	
transactions
aggregate	
value	 for	
financial	 year	
£000
net	 amount	
owed	 toby	
the	 group		
£000
aggregate		
value	 for	
financial	 year	
£000
net	 amount	
owed	 toby		
the	 group		
£000
weston	 castle	 group	 limited		
and	 its	 subsidiary	 entities
common	 control rental	 income	
and	 recharges 138 130 172 468
sales
– – – 218
130 250
mbm	 fabrications	 limited common	 directors		
within	 subsidiaries
purchase	
of	 machine	
components	
and	 spares 92 1 91 24
single	 site	 software	 limited common	 directors provision	 of	
computer	
software – – – –
all	 transactions	 with	 related	 parties	 were	 undertaken	 in	 the	 ordinary	 course	 of	 business	 and	 on	 an	 armslength	 basis
key	 management	 personnel
as	 at	 30	 april	 2010	 the	 following	 directors	 or	 key	 management	 personnel	 had	 loans	 from	 the	 group	 at	 the	 year	 end	 at	 30	 april	
2009	 two	 directors	 had	 loans	 outstanding	 as	 follows
30	 april	 2010	
£000
30	 april	 2009	
£000
k	 turner – 2
v	 wardman – 2
no	 interest	 has	 been	 charged	 on	 the	 balance	 of	 either	 loan	 the	 maximum	 balance	 due	 to	 the	 group	 was	 £4000	 2009	 £5000
as	 at	 30	 april	 2010	 and	 30	 april	 2009	 the	 following	 directors	 or	 key	 management	 personnel	 had	 made	 loans	 to	 the	 group	 at	 the	
year	 end
30	 april	 2010	
£000
30	 april	 2009	
£000
v	 wardman 179 179
no	 interest	 has	 been	 charged	 on	 the	 balance	 of	 the	 loan	 and	 no	 repayments	 made	 the	 loan	 is	 repayable	 on	 demand	 and	 the	
maximum	 balance	 due	 by	 the	 group	 was	 £179000	 2009	 £179000
33	 post	 balance	 sheet	 events
on	1	 june	 2010	 the	 group	 purchased	 inventory	 for	 resale	 from	 partyhouse	 limited	a	 subsidiary	 of	 stardream	 limited	 as	 part	
of	 the	 transaction	 the	 group	 acquired	 the	 right	 to	 use	 the	 partyhouse	 website	 wwwpartyhousecouk	 and	 trading	 style	 this	
inventory	 will	 be	 sold	 during	 the	 normal	 course	 of	 business 		 sceptre	 leisure	 plc	61
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
note
30	 april	 2010
£000
30	 april	 2009
£000
fixed	 assets
investments 6 16039 14828
current	 assets
debtors 7 12284 267 4
cash	 at	 bank	 and	 in	 hand – –
28323 17 502
creditors	 amounts	 falling	 due	 within	 one	 year 8 236 1181
net	 current	 assets 12048 1493
total	 assets	 less	 current	 liabilities 28087 16321
creditors	 amounts	 falling	 due	 after	 more	 than	 one	 year 9 5999 –
net	 assets 22088 16321
capital	 and	 reserves
called	 up	 share	 capital 10 5394 4554
share	 premium	 account 11 4840 173
merger	 reserve 11 11419 11419
merger	 relief 11 100 –
other	 reserve 11 143 58
profit	 and	 loss	 account 11 192 117
shareholders’	 funds 22088 16321
these	 financial	 statements	 were	 approved	 and	 authorised	 for	 issue	 by	 the	 board	 of	 directors	 on	 29	 september	 2010	 and	 were	
signed	 on	 its	 behalf	 by
kenneth	 turner
director
sceptre	 leisure	 plc
company	 no	 031897 47
company	 balance	 sheet
at	 30	 april	 2010
the	 accompanying	 accounting	 policies	 and	 notes	 form	 an	 integral	 part	 of	 these	 financial	 statements 62	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
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
interest	 bearing	 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	 25	 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	 £30000	 2009	 loss	 of	 £14000 		 sceptre	 leisure	 plc	 63
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
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	 2010
number
30	 april	 2009
number
office	 and	 administrative 3 2
the	 aggregate	 payroll	 costs	 of	 these	 persons	 were	 as	 follows
30	 april	 2010
£000
30	 april	 2009
£000
wages	 and	 salaries 368 222
social	 security	 costs 34 26
share	 option	 charge 45 39
pension	 costs 28 16
475 303
4	 remuneration	 of	 directors
see	 note	7	 to	 the	 consolidated	 financial	 statements
5	 dividends
the	 directors	 do	 not	 recommend	 the	 payment	 of	a	 dividend	 in	 respect	 of	 the	 current	 year	 2009	 nil
6	 investments	 in	 subsidiaries
the	 company	 has	 the	 following	 investments	 in	 trading	 subsidiaries
country	 of	
incorporation
class	 of	 shares	
held
ownership
nature	 of	 business 2010 2009
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 – rental	 of	 gaming	 and	
amusement	 machines
single	 site	 software	 limited england	 and	
wales
ordinary 50 50 provision	 of	 ict	 services
on	2	 december	 2009	 the	 company	 became	 the	 legal	 parent	 of	 australian	8	 ball	 company	 limited	 in	a	 cash	 and	 shares	 transaction	
this	 acquisition	 and	 its	 treatment	 in	 the	 group	 accounts	 is	 disclosed	 fully	 in	 notes	1	 and	 15	 to	 the	 consolidated	 financial	 statements
single	 site	 software	 has	 been	 excluded	 from	 the	 group	 consolidation	 on	 the	 grounds	 of	 materiality	 as	 at	 30	 april	 2010	 single	 site	
software	 had	 aggregate	 capital	 and	 reserves	 of	 £10000	 and	 generated	a	 profit	 of	 £4000	 in	 the	 year	 ended	 30	 april	 2010 64	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notes
forming	 part	 of	 the	 company	 financial	 statements	 continued
6	 investments	 in	 subsidiaries	 continued
total
£000
cost
balance	 at	1	 may	 2008 2020
additions 13470
balance	 at	 30	 april	 2009 15548
balance	 at	1	 may	 2009 15548
additions 1126
sharebased	 payments	 to	 employees	 in	 subsidiaries 85
balance	 at	 30	 april	 2010 16759
impairment
balance	 at	1	 may	 2008 720
charged	 in	 the	 year –
balance	 at	 30	 april	 2009 720
balance	 at	1	 may	 2009 720
charged	 in	 the	 year –
balance	 at	 30	 april	 2010 720
net	 book	 value
at	1	 may	 2008 1300
at	 30	 april	 2009 14828
at	 30	 april	 2010 16039
7	 debtors
30	 april	 2010
£000
30	 april	 2009
£000
amounts	 owed	 by	 subsidiary	 undertakings 11680 2168
loans	 to	 subsidiary	 undertakings 480 480
other	 taxation 33 10
prepayments 91 16
12284 267 4
debtors	 include	 £5999000	 2009	 £nil	 due	 after	 more	 than	 one	 year
8	 creditors	 amounts	 falling	 due	 within	 one	 year	
30	 april	 2010
£000
30	 april	 2009
£000
amounts	 due	 to	 subsidiary	 undertakings 5 991
trade	 creditors 183 76
accruals 48 114
236 1181
9	 creditors	 amounts	 falling	 due	 after	 more	 than	 one	 year
30	 april	 2010
£000
30	 april	 2009
£000
revolving	 bank	 credit	 facility 5999 – 		 sceptre	 leisure	 plc	 65
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
10	 called	 up	 share	 capital	
30	 april	 2010
£000
30	 april	 2009
£000
authorised
90000000	 2009	 47 67 4384	 ordinary	 shares	 of	 5p	 each 4500 2384
290697 869	 deferred	 shares	 of	 09p	 each 2616 2616
7 116 5000
allotted	 called	 up	 and	 fully	 paid
55545542	 2009	 38759720	 ordinary	 shares	 of	 5p	 each 2778 1938
290697 869	 deferred	 shares	 of	 09p	 each 2616 2616
5394 4554
on	5	 july	 2009	 the	 company	 placed	 with	 hillroad	 investments	 limited	 16603400	 new	 ordinary	 shares	 of	 5p	 each	 at	a	 price	
of	 331p	 per	 share	 thereby	 raising	 gross	 proceeds	 of	 £5495000	 in	 addition	 on	 15	 december	 2009	 the	 company	 issued	 182422	
shares	 during	 the	 acquisition	 of	 australian	8	 ball	 company	 limited
11	 share	 premium	 and	 reserves		
share	 premium	
account
£000
merger	 reserve	
£000
merger	 relief	
£000
other	 reserve
£000
profit	 and	 loss	
account
£000
at	 beginning	 of	 year 173 11419 – 58 117
profit	 for	 the	 financial	 year – – – – 30
employee	 sharebased	 payments – – – 85 45
net	 proceeds	 from	 ordinary	 shares	 note	 10 4667 – – – –
shares	 issued	 in	 relation	 to	 the	 acquisition	 of	 australian		
8	 ball	 company	 limited – – 100 – –
at	 end	 of	 year 4840 11419 100 143 192
12	 capital	 commitments
the	 company	 has	 no	 outstanding	 capital	 commitments	 at	 30	 april	 2009	 or	 30	 april	 2010
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	 full	 proceeds	 of	 the	 share	 placing	 set	 out	 in	 note	 10	 £54m	 were	 remitted	 to	 sls	 to	 fund	 asset	 purchases	 and	 provide	
working	 capital	 in	 addition	 during	 the	 year	 the	 company	 drew	 down	 £6m	 on	 the	 revolving	 finance	 facility	 the	 proceeds	 of	 which	
were	 again	 remitted	 to	 sls	 to	 provide	 funds	 for	 asset	 purchases	 and	 to	 provide	 working	 capital	 finally	 the	 company	 recharged	 the	
full	 £82000	 interest	 charged	 to	 it	 for	 the	 amounts	 outstanding	 on	 the	 revolving	 finance	 facility	 during	 the	 year 66	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
notice	 of	 annual	 general	 meeting
notice	 is	 hereby	 given	 that	 the	 annual	 general	 meeting	 of	 the	 company	 will	 be	 held	 at	 seymour	 pierce	 limited	 20	 old	 bailey	
london	 ec4m	 7en	 on	 thursday	 21	 october	 2010	 at	 11am	 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	 2010	 together	 with	 the	 report	 of	 the	
directors	 and	 the	 auditors’	 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	 m	 white	 who	 was	 appointed	 since	 the	 last	 annual	 general	 meeting	 and	 retires	 in	 accordance	 with	 the	 company’s	
articles	 of	 association	 as	 a	 director	 of	 the	 company
4	 	 to	 reappoint	 g	 van	 zwanenberg	 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	 £833183	 16663660	 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	 6	 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	 £277 728	 5554550	 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	 2777 277	 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
29	 september	 2010
secretary
139	 brookfield	 place	
walton	 summit	
preston	
pr5	 8bf 		 sceptre	 leisure	 plc	67
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business	 review	 pages	 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
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	 19	 october	 2010	 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	 19	 october	 2010	 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	 19	 october	 2010
e	 shareholders	 may	 appoint	a	 proxy	 or	 proxies	 or	 vote	 online	 at	 wwwcapitashareportalcom 68	 sceptre 	 leisure	 plc
	 annual 	 report	 and	 accounts	 2010
shareholder	 notes designed and produced by radley yeldar wwwrycom using the 
paperless proofing system wizardry 
sceptre leisure plc are committed to caring for the environment and 
looking for sustainable ways to minimise our impact on it
this year our annual report and accounts has been printed by  
beacon press using their pureprint
®
 environmental print technology 
a guaranteed low carbon low waste independently audited process  
that reduces the environmental impact of the printing process all the  
electricity used in this production was generated from 100 renewable 
sources and vegetable oil based inks were used throughout beacon press 
is a carbonneutral
®
 company and is certificated to environmental 
management system iso 14001 and registered to emas the eco  
management and audit scheme
also we take care to minimise the impact on the environment in the  
paper we use the paper we have used lumi silk is sourced from well 
managed forests and manufactured at a mill accredited with iso 14001 
environmental management standard the pulp used in this product is 
bleached using an elemental chlorine free process 
fsc – forest stewardship council this ensures there is an audited chain of custody 
from the tree in the wellmanaged forest through to the finished document in the  
printing factory
 iso 14001 – a pattern of control for an environmental management system against 
which an organisation can be credited by a third party sceptre
the business in leisure
sceptre leisure plc 
139 brookfield place
walton summit
bamber bridge
preston
pr5 8bf
t 01772 694 242
f 01772 694 243
w wwwsceptreleisureplccouk
e infosceptreleisureplccouk
sceptre leisure plc annual report and accounts 2010


Summary:
 08 sceptre leisure plc
	 annual 	 report	 and	 accounts	 2010
chief executive’s review
building the business
nationwide locations
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
on call
we	 like	 to	 talk	 to	 our	 customers	 to	 ensure		
that	 we	 understand	 their	 requirements		
we	 provide	 telephone	 service	 cover	 364	 days	
a	 year	
i	 am	 pleased	 to	 be	 able	 to	 report	
a	 strong	 set	 of	 results	 for	 the	 year	
ended	 30	 april	 2010
we	 have	 continued	 the	 progress	 outlined	
in	 our	 interim	 results	 with	 growth	 in	 both	
revenue	 and	 earnings	 compared	 to	 the	
previous	 year	 continuing	 our	 12year	
unbroken	 run	 of	 profitable	 growth
performance overview
the	 period	 under	 review	 has	 provided	
much	 in	 the	 way	 of	 challenge	 whether	
due	 to	 recession	 pub	 closures	 or	
instability	 in	 the	 financial	 markets	
however	 sceptre	 has	 continued	 to	
grow	 and	 develop	 operations	 in	 all	
areas	 of	 the	 business
we	 have	 maintained	 or	 increased	 our	
asset	 usage	 and	 staffing	 ratios	 whilst	
continuing	 to	 offer	 unrivalled	 service	
to	 our	 customers	 in	 the	 licensed	 trade	
across	 the	 uk
during	 the	 course	 of	 the	 year	 we	 undertook	
several	 important	 transactions	a	 share	
placing	 an	 acquisition	 and	a	 strategic	
disposal	 were	 all	 successfully	 completed
i	 would	 like	 to	 take	 this	 opportunity	 to	
summarise	 the	 activities	 in	 each	 of	 our	
three	 trading	 divisions
sceptre leisure solutions
sceptre	 leisure	 solutions	 forms	 the	
backbone	 of	 our	 group	 it	 provides	 over	
90	 of	 our	 revenues	 and	 continues		
to	 grow
the	 division	 is	 the	 secondlargest	
operator	 of	 amusement	 machines	 in	 the	
uk	 licensed	 market	 likeforlike	 revenues	
and	 machine	 numbers	 grew	 during	 the	
year	 against	a	 backdrop	 of	 continuing	
pub	 closures
sceptre	 leisure	 solutions’	 success	 is	
built	 on	 strict	 adherence	 to	 operational	
ratios	 and	 key	 performance	 indicators	
average	 weekly	 rental	 returns	 fell	
during	 the	 year	 due	 to	 two	 main	 factors	
the	 first	 was	 the	 sale	 of	 our	 fobt	 rental	
business	 which	 achieved	 high	 income	
per	 machine	 but	 with	 correspondingly	
high	 maintenance	 cost	 the	 second	 factor	
was	 the	 significant	 decline	 in	 swp	 skills	
with	 prizes	 or	 quiz	 machine	 income	
due	 to	 the	 withdrawal	 of	 certain	 games	
due	 to	 new	 regulations	 weekly	 machine	
rentals	 in	 this	 sector	 fell	 by	 17	 over	 the	
course	 of	 the	 year	 in	 the	 face	 of	 this	 an	
8	 overall	 decrease	 in	 machine	 week	
average	 represents	a	 good	 peformance	
in	 the	 current	 market	 we	 maintained	
or	 improved	 all	 of	 our	 other	 measures	
disclosed	 more	 fully	 in	 the	 financial	
review	 on	 page	 16
sceptre	 leisure	 solutions	 continued	
to	 win	 new	 business	 during	 the	 year	
with	 contract	 awards	 from	 highquality	
operators	 such	 as	 whitbread	 and	
also	 contract	 renewals	 from	 existing	
customers	 such	 as	 ssp	 which	 operates	
at	 train	 stations	 across	 the	 uk	
profit before taxation
£19m
37
machine asset utilisation
95
2009	 95
for	 more	 information	 on		
our	 business	 please	 go	 to	
wwwsceptreleisureplccouk
u 		 sceptre leisure plc 09
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business review pages 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
the combination 
of our recent 
acquisition and 
contract wins gives 
us a great platform 
from which to build  
the business
ken turner
chief	 executive	 officer 10 sceptre leisure plc
	 annual 	 report	 and	 accounts	 2010
chief executive’s review
continued
on the 
cards
sceptre leisure plc
report and accounts 2010
sales of over 55m lottery 
tickets annually sceptre 
market share increasing 
and new tickets launched 
with higher percentage 
payouts we are also one 
of the largest suppliers of 
bingo tickets in the uk 		 sceptre leisure plc 11
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business review pages 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
our	 success	 in	 winning	 and	 retaining	
business	 is	 due	 to	a	 combination	 of	
marketleading	 customer	 service	 and	
the	 operational	 knowhow	 provided	
by	 our	 experienced	 and	 dedicated	
operational	 staff
the	 growth	 has	 continued	 into	 the		
new	 financial	 year	 with	a	 significant	
contract	 award	 from	 punch	 pub	 company	
this	 new	 partnership	 will	 increase	 our	
machine	 estate	 by	 around	 1000	 pieces	 in	
the	 second	 half	 of	 201011
during	 the	 year	 ended	 30	 april	 2010	
sceptre	 leisure	 solutions	 achieved	
revenue	 growth	 of	 66	 and	 machine	
number	 growth	 excluding	 disposals		
of	 37
australian 8 ball acquisition
on	 15	 december	 2009	 sceptre	 leisure	 plc	
announced	 the	 acquisition	 of	 australian	
8	 ball	 company	 limited	 based	 in	 dorset	
which	 operated	 in	 410	 sites	 predominately	
across	 the	 south	 and	 southwest	 of	
england
the	 acquisition	 of	 australian	8	 ball	
strengthened	 sceptre’s	 position	 in	 the	
important	 southern	 marketplace	 and	
added	a	 strategically	 important	 depot	
in	 that	 area
as	 is	 the	 sceptre	 way	 integration	 of	
australian	8	 ball	 into	 our	 business	 was	
effected	 quickly	 and	 efficiently	 with	
full	 operational	 transition	 into	 sceptre’s	
marketleading	 systems	 and	 processes	
being	 completed	 within	 four	 weeks
the	 group	 continues	 to	 look	 for	 similar 	
earningsenhancing	 acquisitions	 within	
the	 fragmented	 machineoperator	 market	
i	 believe	 that	 there	 are	a	 number	 of	 such	
acquisitions	 that	 could	 be	 made	 each	 of	
which	 would	 provide	 significant	 benefits	
both	 operationally	 and	 financially	
we	 remain	 committed	 to	 our	 strategy	
of	 organic	 growth	 coupled	 with	 selective	
acquisition
sale of fixed odds betting terminal 
rental assets 
on	 19	 april	 2010	 the	 group	 sold	 its	
fixed	 odds	 betting	 terminal	 fobt	
rental	 assets	 to	 global	 draw	 limited	 for	a	
total	 cash	 consideration	 of	 £375m
whilst	 we	 had	 worked	 hard	 in	 our	
partnership	 with	 playtech	 and	 video	 bet	
to	 rollout	 their	 software	 platform	 to	 the	
uk	 licensed	 betting	 office	 lbo	 market	
we	 recognised	 two	 factors	 affecting	 our	
ability	 to	 grow	 further	 in	 this	 particular	
sector 	 the	 first	 was	 growing	 uncertainty	
over	 the	 future	 regulatory	 framework	
under	 which	 the	 fobt	 machines	 would	
operate	
amusement with prizes
amusement	 with	 prizes	 awp	 commonly	
called	 fruit	 machines	 provide	 an	 essential	
source	 of	 income	 for	 many	 of	 the	 uk’s	 pubs	
and	 clubs	 our	 long	 experience	 of	 operating	
in	 this	 sector	 allows	 us	 to	 help	 our	 customers	
maximise	 their	 profits	 from	 these	 machines
1
2
3
4
5
6
7
8
9
10
11
13
12
piecespersonnel ratio
48
2009	 46
1 birmingham	
2 bristol	
3 cardiff
4 crewe	
5 leeds	
6 london	 east
7 london	 west
8 nottingham
9 bournemouth
10 pl ymouth
11 preston	
12 scotland
13 washington
sceptre leisure service centres
the	 second	 was	 the	 high	 level	 of	 capital	
investment	 required	 to	 grow	 the	 machine	
base	a	 typical	 fobt	 costs	 more	 than	 twice	
as	 much	 as	a	 fruit	 machine	 for	a	 pub	 or	
club	 but	 provides	 only	 50	 more	 by	 way	
of	 rental	 income 12 sceptre leisure plc
	 annual 	 report	 and	 accounts	 2010
chief executive’s review
continued
on call
as	 part	 of	 our	 strategy	 for	 growth	 we		
commissioned	a	 new	 customer	 service	
centre	 which	 opened	 in	 january	 2010
the	 fobt	 rental	 assets	 comprised	 751	
terminals	 and	 associated	 customer	
contracts	 with	a	 net	 book	 value	 of	 £30m	
the	 full	 amount	 of	 the	 consideration	
was	 paid	 in	 cash	 on	 completion	 and	
generated	a	 oneoff	 profit	 on	 disposal	
of	 £08m	 which	 is	 recognised	 in	
these	 results
this	 sale	 of	a	 noncore	 part	 of	 our	
business	 was	 at	a	 significant	 profit	
its	 disposal	 freed	 up	 capital	 and	 resources	
across	 the	 business	 to	 focus	 on	 the	
rollout	 of	 machines	 to	 our	 traditional	
markets	 in	 pubs	 and	 other	 leisure	 outlets	
where	 we	 continue	 to	 see	 strong	 demand
share placing
on	5	 july	 2009	 we	 completed	 the	
placing	 of	 16603400	 new	 ordinary	
shares	 with	 hillroad	 investments	 limited	
at	a	 price	 of	 331p	 per	 share	 thereby	
raising	 gross	 proceeds	 of	 £55m		
this	 represents	 299	 of	 our	 enlarged	
share	 capital	 as	 at	 30	 april	 2010
the	 lack	 of	 availability	 of	 asset	 finance	
had	 constrained	 us	 from	 continuing	 to	
grow	 the	 business	 in	 the	 early	 part	 of	 the	
financial	 year	 in	 the	 same	 period	 there	
had	 been	 considerable	 consolidation	
in	 the	 gaming	 machine	 supply	 market	
this	 consolidation	 opened	 up	 significant	
opportunities	 to	 win	 additional	 business	
with	 some	 of	 the	 major	 pub	 companies	
within	 the	 uk	
i	 am	 delighted	 to	 welcome	 hillroad	 as	a	
substantial	 shareholder 	 the	 additional	
capital	 has	 allowed	 us	 to	 drive	 our	
business	 forward	 and	 to	 take	 advantage	
of	 some	 of	 the	 significant	 opportunities	
that	 exist	 in	 our	 marketplace	
lotteryking
the	 registered	 members’	 club	 market	
endured	a	 difficult	 year	 footfall	 was	
down	 with	 many	 sites	 finding	 income	
difficult	 to	 come	 by	
during	 the	 year	 we	 reviewed		
lotteryking’s	 operational	 structure	 and	
relocated	 all	 telesales	 and	 administrative	
functions	 to	 our	 preston	 head	 office	
in	 doing	 so	 we	 incurred	 oneoff	 costs	
totalling	 £05m	 in	 redundancy	 and	
provision	 for	 future	 property	 costs	 at	 our	
hainault	 facility
in	 spite	 of	 this	 lotteryking	 has	 increased	
market	 share	 with	 machine	 numbers	
increasing	 by	 15	 over	 the	 course	 of	
the	 year
lotteries	 provide	a	 valuable	 taxfree	
income	 stream	 for	 clubs	 and	 lotteryking	
has	 the	 largest	 range	 of	 tickets	 in	
the	 market	 to	 help	 them	 raise	 funds	
successfully
lotteryking’s	 customer	 base	 has	 also	
allowed	 sceptre	 to	 begin	 penetrating	 the	
club	 market	 and	i	 would	 expect		
this	 steady	 growth	 to	 continue	 in	 the	
coming	 months
kelly’s eye
in	 addition	 to	 private	 lotteries	 registered	
members’	 clubs	 rely	 on	 the	 income	
generated	 from	 bingo	 and	 other	
fundraising	 activities	 these	 indoor	 games	
also	 provide	a	 popular	 and	 enjoyable	
pastime	 for	 members	 of	 these	 clubs
machine rental income
£388m
2009	 £364m
on call 		 sceptre leisure plc 13
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business review pages 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
on the 
money
we moved quickly to 
introduce the new 
higher jackpot levels – 
approximately 80 of 
our awp machines now 
feature a £70 payout
for	 more	 information	 on	 	
our	 business	 please	 go	 to	
wwwsceptreleisureplccouk
u 14 sceptre leisure plc
	 annual 	 report	 and	 accounts	 2010
chief executive’s review
continued
on 
cue
video games
in	 addition	 to	 fruit	 machines	 pool	 tables		
and	 jukeboxes	 we	 also	 supply	a	 wide	 range		
of	 video	 games	 		 sceptre leisure plc 15
	 	 annual 	 report	 and	 accounts	 2010
overview	 pages	 01–05
business review pages 06–19
governance	 pages	 20–26
financial	 statements	 pages	 27–65
other	 information	 pages	 66–68
awp maximum prize value
£70
2009	 £35
available service cover days per year
364
we	 are	 beginning	 to	 see	 these	 activities	
being	 replicated	 in	 the	 pub	 market	
bingo	 nights	 are	 becoming	 more	 popular	
as	 landlords	 look	 to	 gain	 additional	
midweek	 custom	 and	 sceptre’s	 sales	
and	 operational	 team	 is	 ideallyplaced	
to	 deliver	 these	 fundraising	 items	 to	
pubs	 over	 the	 course	 of	 the	 year	 we	
introduced	 our	 ‘collectors	 deliver’	
programme	 whereby	 pubs	 could	 order	
from	 their	 regular	 machine	 collector 	
and	 have	 these	 goods	 personally	
delivered	 at	 the	 next	 collection
this	 has	 proven	 to	 be	a	 popular	
service	 and	 we	 are	 now	 working	 on	
the	 introduction	 of	a	 comprehensive	
catalogue	 containing	a	 complete	 range	
of	 products	 for	 the	 pub	 or	 club
the	 catalogue	 will	 be	 sent	 to	 all	 12000	
of	 our	 customers	 during	 the	 course	 of	
october 	 and	 will	 be	 followed	 up	 by	a	
telesales	 marketing	 campaign	 to	 generate	
new	 sales	 from	 our	 existing	 client	 base
this	 catalogue	 will	 be	 backed	 by	 our	
ecommerce	 websites	 also	 offering	 the	
full	 range	 of	 products	 to	 ensure	 that	
our	 customers	 can	 order	 goods	 at	a	 time	
and	 place	 that	 is	 convenient	 to	 them
outlook
i	 believe	 that	 the	 past	 year	 has	 left	
sceptre	 well	 placed	 to	 take	 advantage	
of	 the	 many	 opportunities	 that	 exist	
in	 the	 pub	 and	 club	 markets
we	 continue	 to	 win	 business	 from	 the	
competition	 through	 our	 offering	 of	
highquality	 service	 and	 marketleading	
products	 our	 recent	 contract	 win	 with	
punch	 pub	 company	 demonstrates	 that	
sceptre	 is	 now	 seen	 as	a	 leading	 machine	
operator	 by	 the	 uk’s	 premium	 pub	
companies
there	 are	a	 number	 of	 acquisition	
opportunities	 within	 the	 machine	 operating	
market	 which	 could	 be	 integrated	 into	
our	 existing	 depot	 infrastructure	 to	
deliver	 enhanced	 future	 earnings	 we	 will	
continue	 to	 assess	 these	 opportunities	
and	 pursue	 those	 that	 we	 feel	 offer	 the	
clearest	 benefits	 to	 our	 organisation
we	 have	 demonstrated	 that	 sceptre	 can	
continue	 to	 grow	 and	 prosper	 in	a	 difficult	
market	 and	 we	 remain	 confident	 that	 we	
can	 continue	 to	 do	 so	 in	 the	 coming	 year
ken turner
chief	 executive	 officer	
29	 september	 2010