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TIDMWEB
RNS Number : 2448O
Webis Holdings PLC
15 September 2011
FOR IMMEDIATE RELEASE
15 September 2011
WEBIS HOLDINGS PLC
("Webis" or "the Group")
PRELIMINARY RESULTS FOR THE 52 WEEK PERIOD ENDED 29 MAY 2011
Webis Holdings plc, the global on-line gaming group, today announces its preliminary results for the period.
Summary:
-- Loss for the period of GBP110,000 (2010: loss of GBP337,000)
-- EBITDA profit of GBP149,000 (2010: loss of GBP37,000)
-- Group gross profit increased by 17% to GBP3.04 million (2010:
GBP2.6 million)
-- Group turnover of GBP105.6 million (2010: GBP114.2 million)
Commenting on the results, Denham Eke, Chairman of Webis Holdings plc, said: "Although conditions in the market remain challenging, the Board believes that, after a much improved performance from betinternet, this business has the opportunity to further grow its market presence during the forthcoming year. There are now also signs that EWS is again beginning to trade in line with the Board's previous expectations".
ENDS
For further information:
Webis Holdings plc Tel: 01624 698141
Garry Knowles, Managing Director
Damon Waddington, Finance
Director
Evolution Securities Tel: 0113 2431619
Joanne Lake/Peter Steel
Notes to editors:
The following are attached:
Chairman's Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Statement of Changes in Shareholders' Equity
Consolidated Statement of Cash Flows
Notes to the Accounts
Chairman's Statement
Introduction
The performance of the Group's sportsbook operation, betinternet.com (IOM) Limited ("betinternet"), improved during the financial year ended 29 May 2011. The consolidated results for the period, however, were affected by a difficult year for the Group's pari-mutuel platform, European Wagering Services Limited ("EWS"). The Group's turnover for the year was GBP106 million (2010: GBP114 million). The Group recorded a diminished operating loss of GBP108,000 (2010: loss of GBP315,000) and generated positive EBITDA of GBP149,000 (2010: loss of GBP37,000).
EWS
In August 2010, EWS acquired a United States pari-mutuel hub, WatchandWager.com LLC, licenced with the North Dakota Racing Commission. In line with our US expansion strategy, we also established a permanent sales and marketing operation in the San Francisco Bay area during the year.
EWS encountered difficulties during the second half of the year in establishing a long-term payment solution for its online and telephone operations. This hindered our ability to accept and return customer funds via our link2bet.com website. Most payment processors and banks have been cautious with regard to the provision of services and the few that have done so have proven to be inconsistent and expensive.
This issue particularly affected the betting turnover of our higher margin 'leisure players'. As a result, whilst turnover only fell slightly by 3% to GBP34 million (2010: GBP35 million), gross profit reduced to GBP1,179,000 (2010: GBP1,446,000). Our reported performance was also impacted by an adverse movement in the US Dollar during the year and, together with additional customer payment and receipt processing costs, the business recorded an operating loss of GBP102,000 (2010: profit of GBP464,000).
EWS acted quickly to implement temporary payment solutions for our clients and a number of these are now in place. The Board anticipates the establishment of a permanent more robust solution in the coming weeks.
betinternet
betinternet's fixed odds business continued our positive trading performance during the first half into the second half of the year. The 'In-Play' product offering was further enhanced during the year and this, along with last summer's World Cup finals, was key to generating increased turnover at a much improved margin for this area of our business.
Better bonus control and the improved fixed-odds margin impacted on our casino and games activities during the second half. As a result, casino and games' annual turnover fell, the primary reason for generating lower turnover of GBP71.427 million (2010: GBP79.202 million). Despite this decrease, gross profit increased to GBP1,861,000 (2010: GBP1,171,000) following the improved performance of the fixed odds business. The business recorded a pre-tax profit of GBP1,000 (2010: loss of GBP778,000).
To address the lower activity in casino and games, we have refreshed our casino offering with an improved turnkey solution from a well-established games provider. During the final quarter of the financial year, we also launched a new games suite.
The sportsbook business has shown encouraging signs of progress. In particular, the Board believes that there are further growth opportunities for the fixed odds business, especially from 'In-Play' betting, where we implemented additional website enhancements to improve the user experience prior to the start of the current European football season.
Overview of Group Results
Group turnover for the full period to 29 May 2011 was GBP106 million (2010: GBP114 million) and gross profit increased by 16% to GBP3.04 million (2010: GBP2.62 million). Gross margin improved to 2.9% (2010: 2.3%).
The Group recorded a profit before interest, tax, depreciation and amortisation of GBP149,000 (2010: loss of GBP37,000) and an operating loss of GBP108,000 (2010: loss of GBP315,000).
Operating expenses increased by 9% compared with last year to GBP2,891,000 (2010: GBP2,655,000), primarily due to increased operating costs on the EWS operation as a result of the exchange loss, payment processing costs and costs of establishing a presence in the United States. betinternet's operating costs reduced during the year.
Funding
In February 2011, the Group's largest shareholder, Burnbrae Limited, exercised an option to convert its loan note of GBP300,000 together with interest thereon into 23,344,977 new ordinary shares of 1 penny each.
In July 2011, in order to comply with new legislation introduced in the Isle of Man requiring gaming companies to hold sufficient funds to cover all potential customer liabilities, the Group deposited GBP1,130,000 in designated client accounts, funded via a short term overdraft facility from Burnbrae Limited on normal commercial terms.
Strategy, current trading and outlook
Our EWS US development plan commenced with the outsourced migration of its Hub operations from the Isle of Man to a contracted service provider in Maryland, a project which was completed in June 2011. This move is likely to result in greater access to international content for our player base at reduced cost. The Board has also commissioned the Thoroughbred Racing Protective Bureau (TRPB) in the US to update its report on EWS, with particular emphasis on its US operations. Compliance with the TRPB is now a requirement of most US thoroughbred tracks and track groups. This report is due to be issued to member tracks by the end of this year at the latest. Concurrent with these developments, the Board also expects to further progress its web development and marketing plans in the US over the coming months.
The Board is of the opinion that, once a robust cost-effective payment processing solution has been established, EWS will be suitably positioned to develop our aggressive sales and marketing strategy and increase the level of racing content. In this respect, our business plan for EWS remains unchanged going into the new financial year. There are now also signs that EWS is again beginning to trade in line with the Board's previous expectations.
betinternet has continued to trade in line with the Board's expectations through the first quarter of the new financial year. The increase in fixed odds turnover achieved during the latter part of the last financial year has been sustained into the summer. We have benefited from the addition of new content, as we continue to utilise and integrate third party data feeds without the need for additional personnel. The casino and games turnover and margin has also improved steadily during the first quarter, with the live dealer casino product in particular showing strong revenue over the summer months.
Although conditions in the market remain challenging, the Board believes that, after a much improved performance from betinternet, this business has the opportunity to further grow its market presence during the forthcoming year.
Denham Eke
Chairman
Webis Holdings plc
Consolidated Statement of Comprehensive Income
for the Period ended 29 May 2011
Note 2011 2010
GBP000 GBP000
Turnover 2 105,546 114,167
Cost of sales (102,470) (111,519)
Betting duty paid (36) (30)
---------- ----------
Gross Profit 3,040 2,618
Administration expenses (2,891) (2,655)
---------- ----------
Earnings before interest, tax, depreciation and
amortisation 149 (37)
Depreciation and amortisation (248) (255)
Share-based payment costs 3 (9) (23)
---------- ----------
Total operating loss (108) (315)
Net finance costs 4 (2) (22)
Taxation 5 - -
---------- ----------
Total comprehensive loss for
the period attributable to
owners (110) (337)
---------- ----------
Basic and diluted loss per share (pence) (0.05) (0.16)
---------- ----------
Webis Holdings plc
Consolidated Statement of Financial Position
As at 29 May 2011
Note 2011 2010
GBP000 GBP000
Non-current assets
Intangible assets - goodwill 7 111 43
Intangible assets - other 8 231 311
Property and equipment 9 34 75
---------- ----------
Total non-current assets 376 429
Current assets
Trade and other receivables 838 834
Cash and cash equivalents 1,470 999
---------- ----------
Total current assets 2,308 1,833
Current liabilities
Bank overdraft - (295)
Trade and other payables (2,049) (1,287)
Convertible loan notes - (300)
---------- ----------
Total current liabilities (2,049) (1,882)
---------- ----------
Net assets 635 380
---------- ----------
Shareholders' equity
Called up share capital 2,302 2,068
Share premium account 10,049 9,927
Share option reserve 116 107
Profit and loss account (11,832) (11,722)
---------- ----------
Total shareholders' equity 635 380
---------- ----------
Webis Holdings plc
Statement of Changes in Shareholders' Equity
for the Period ended 29 May 2011
Called
up Share Total
share Share option Retained shareholders'
capital premium reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
Balance as at
31 May 2009 2,068 9,927 84 (11,385) 694
Total
Comprehensive
loss for the
period - - - (337) (337)
Transactions
with owners
Share-based
payment
expense - - 23 - 23
---------- ---------- ---------- ---------- ----------
Balance as at
30 May 2010 2,068 9,927 107 (11,722) 380
Total
Comprehensive
loss for the
period - - - (110) (110)
Transactions
with owners
Arising on
shares issued
in the year 234 122 - - 356
Share-based
payment
expense - - 9 - 9
---------- ---------- ---------- ---------- ----------
Balance as at
29 May 2011 2,302 10,049 116 (11,832) 635
---------- ---------- ---------- ---------- ----------
Webis Holdings plc
Consolidated Statement of Cash Flows
for the Period ended 29 May 2011
2011 2010
GBP000 GBP000
Net cash inflow (outflow) from operating
activities 607 (335)
Cash flows from investing activities
Interest received - -
Purchase of intangible assets (183) (211)
Purchase of property, plant and
equipment (12) (25)
---------- ----------
Net cash outflow from investing activities (195) (236)
Cash flows from financing activities
Interest paid (2) (22)
Issue of equity shares 356 -
---------- ----------
Net cash inflow (outflow) from
financing activities 354 (22)
Net increase / (decrease) in cash and
cash equivalents 766 (593)
Cash and cash equivalents at beginning
of period 704 1,297
---------- ----------
Net cash and cash equivalents at end of period 1,470 704
---------- ----------
Cash and cash equivalents comprise
Cash and deposits 1,470 999
Bank overdraft - (295)
---------- ----------
1,470 704
---------- ----------
Cash generated from operations
Loss from operations (108) (315)
Adjusted for:
Depreciation and amortisation 248 255
Share-based payment cost 9 23
Increase in receivables (4) (121)
Increase / (decrease) in payables 462 (177)
---------- ----------
Net cash inflow / (outflow) from
operating activities 607 (335)
---------- ----------
Webis Holdings plc
Notes to the Consolidated Financial Statements
For the Period ended 29 May 2011
1 Reporting entity
Webis Holdings plc is a company domiciled in the Isle of Man.
The address of the Company's registered office is Viking House,
Nelson Street, Douglas, Isle of Man, IM1 2AH.
The Group's consolidated financial statements as at and for
the period ended 29 May 2011 consolidate those of the Company
and its subsidiaries (together referred to as "the Group").
The preliminary announcement does not constitute the Group's
statutory financial statements. It is an extract from the
financial statements for the period ended 29 May 2011 which
have not yet been filed.
1.1 Basis of preparation
(a) Statement of compliance
The financial information included in this announcement has
been extracted from the Group's consolidated financial statements
prepared in accordance with International Financial Reporting
Standards ("IFRS") and its interpretations adopted by the
International Accounting Standards Board ("IASB").
(b) Basis of measurement and functional currency
The Group consolidated financial statements are presented
in Pounds Sterling, rounded to the nearest thousand. They
are prepared under the historical cost convention except where
assets and liabilities are required to be stated at their
fair value.
(c) Use of estimates and judgement
The preparation of Group financial statements in conformity
with IFRS requires management to make judgements, estimates
and assumptions that affect the application of policies and
reported amounts of assets and liabilities, income and expenses.
Although these estimates are based on management's best knowledge
and experience of current events and expected economic conditions,
actual results may differ from these estimates.
The directors believe the assumptions used in the model to
calculate the fair value of the share based payments are the
most appropriate for the Group.
The accounting policies set out below have been applied consistently
to all periods presented in these consolidated financial statements.
Segmental Analysis
2 Period ended 29 May 2011
2011 2010
GBP000 GBP000
Turnover
Sportsbook Asia Pacific 57,863 54,476
UK & Ireland 8,692 13,656
Europe 4,070 9,738
Rest of the
World 802 1,332
Pari-mutuel United States 17,694 18,788
Caribbean 13,912 16,177
Australia 2,513 -
---------- ----------
105,546 114,167
---------- ----------
Profit / (loss) before
tax
Sportsbook 1 (778)
Pari-mutuel (102) 464
Group (9) (23)
---------- ----------
(110) (337)
---------- ----------
Net assets
Sportsbook (756) (757)
Pari-mutuel 1,477 1,579
Group (86) (442)
---------- ----------
635 380
---------- ----------
Share-based payment
3 costs
2011 2010
GBP000 GBP000
Share options 9 23
---------- ----------
9 23
---------- ----------
4 Net finance costs
2011 2010
GBP000 GBP000
Bank interest receivable - -
---------- ----------
- -
---------- ----------
Bank interest payable (5) (4)
Loan interest payable 3 (18)
---------- ----------
(2) (22)
---------- ----------
Net finance costs (2) (22)
---------- ----------
5 Taxation
No provision for taxation is required for either the current
or previous periods, due to the zero per cent corporate tax
regime in the Isle of Man. Unprovided deferred tax was GBPNil
(2010: GBPNil).
6 Earnings per ordinary share
The calculation of the basic earnings per share is based on
the earnings attributable to ordinary shareholders divided
by the weighted average number of shares in issue during the
period.
The calculation of the diluted earnings per share is based
on the basic earnings per share, adjusted to allow for the
issue of shares, on the assumed conversion of all dilutive
share options.
An adjustment for the dilutive effect of share options and
convertible debt in the previous period has not been reflected
in the calculation of the diluted loss per share, as the effect
would have been anti-dilutive.
2011 2010
GBP000 GBP000
Loss for the period (110) (337)
---------- ----------
No. No.
Weighted average number of ordinary shares
in issue 212,902,757 206,826,667
Diluted number of ordinary
shares 230,171,644 226,498,798
Basic loss per share (pence) (0.05) (0.16)
Diluted loss per share (pence) (0.05) (0.16)
7 Intangible assets - Goodwill
Goodwill
GBP000
Cost
Balance at 30 May 2010 43
Additions during the period 68
----------
Balance at 29 May 2011 111
----------
Amortisation and
impairment
At 30 May 2010 -
Amortisation for the period -
----------
At 29 May 2011 -
Net Book Value ----------
At 29 May 2011 111
----------
At 30 May 2010 43
----------
The addition during the period relates to goodwill arising
on the acquisition on 1 August 2010 of WatchandWager.com LLC,
a US registered entity and licenced for pari-mutuel wagering
in North Dakota.
8 Intangible assets - Other
Software
&
Development
Costs
GBP000
Cost
Balance at 30 May 2010 2,517
Additions during the period 115
----------
Balance at 29 May 2011 2,632
----------
Amortisation and impairment
At 30 May 2010 2,206
Amortisation for the period 195
----------
At 29 May 2011 2,401
Net Book Value ----------
At 29 May 2011 231
----------
At 30 May 2010 311
----------
9 Property and equipment
Fixtures
Computer &
equipment fittings Total
GBP000 GBP000 GBP000
Cost
At 30 May 2010 1,241 281 1,522
Additions 12 - 12
---------- ---------- ----------
At 29 May 2011 1,253 281 1,534
---------- ---------- ----------
Depreciation
At 30 May 2010 1,179 268 1,447
Charge for the period 42 11 53
---------- ---------- ----------
At 29 May 2011 1,221 279 1,500
---------- ---------- ----------
Net Book Value
At 29 May 2011 32 2 34
---------- ---------- ----------
At 30 May 2010 62 13 75
---------- ---------- ----------
10 Approval of financial statements
The financial statements were approved by the Board on 14
September 2011. The Annual Report is expected to be posted
to shareholders on 20 September 2011 and will be available
from that date at the Group's Registered Office: Viking House,
Nelson Street, Douglas, Isle of Man IM1 2AH. A copy of the
Annual Report will also be made available on the Group's website
www.webisholdingsplc.com.
The Group's nominated advisor and broker is:
Evolution Securities, Kings House, 1 Kings Street, Leeds LS1
2HH.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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